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Important Notice
Ⅰ The Board of Directors (the “Board”), the Board of Supervisors and directors, supervisors and
senior management of the Company hereby warrant the truthfulness, accuracy and completeness
of the contents of the interim report (the “Report”), and that there are no false representations,
misleading statements or material omissions contained in the Report, and severally and jointly
accept responsibility.
Ⅱ All the directors of the Company attended the Board meeting.
Ⅲ The interim report of the Company is unaudited.
Ⅳ Mr. Zhu Baoguo (朱保国), the person-in-charge of the Company, and Mr. Qiu Qingfeng (邱庆
丰), the person-in-charge of the Company's accounting work and the person-in-charge of the
accounting department (the head of the accounting department), declare that they hereby warrant
the truthfulness, accuracy and completeness of the financial statements contained in the Report.
Ⅴ Profit distribution plan or plan for conversion of capital reserve to share capital approved by
the Board during the Reporting Period
Not applicable
VI Risk declaration for the forward-looking statements
√Applicable □N/A
The Report contains forward-looking statements which involve the future plans, development strategies,
etc. of the Company, yet do not constitute substantive undertakings of the Company to investors.
Investors should exercise caution prior to making investment decisions.
VII Whether there is non-operating use of funds by the controlling shareholder and their related
parties
No
VIII Whether there is a violation of the prescribed decision-making procedures to provide
external guarantees
No
IX Whether more than half of directors cannot warrant the truthfulness, accuracy and
completeness of the Report disclosed by the Company
No
X Significant risk warnings
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There is no exceptionally significant risk that will have a material impact on the productions and
operations of the Company during the Reporting Period. The Company has described various risks
related to productions and operations that the Company may face and the corresponding response
measures taken. Please refer to “Risks” in Chapter 3 “Management Discussion and Analysis”.
XI Others
□Applicable √N/A
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Table of Contents
Financial Highlights .............................................................................................................................. 5
Chapter 1 Definitions ............................................................................................................................ 7
Chapter 2 Company Profile and Major Financial Indicators ........................................................... 9
Chapter 3 Management Discussion and Analysis............................................................................. 13
Chapter 4 Corporate Governance ..................................................................................................... 49
Chapter 5 Environmental and Corporate Social Responsibility..................................................... 51
Chapter 6 Major Events ..................................................................................................................... 85
Chapter 7 Changes in Equity and Shareholders .............................................................................. 97
Chapter 8 Information on Preferred Shares................................................................................... 101
Chapter 9 Information on Bonds ..................................................................................................... 102
Chapter 10 Financial statements ..................................................................................................... 103
The Financial Statements signed and sealed by the person-in-charge of the
Company, the person-in-charge of the Company's accounting work and the
person-in-charge of the accounting department (the head of the accounting
List of documents
department)
available for inspection
The original copies of all documents and announcements of the Company which
have been disclosed to the public on the website designated by CSRC (China
Securities Regulatory Commission) during the Reporting Period
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Financial Highlights
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Financial Highlights
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Chapter 1 Definitions
In this Report, unless the context otherwise requires, the following expressions shall have the
following meanings:
Definitions of common terms
CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shanghai Stock Exchange
Baiyeyuan or the Shenzhen Baiyeyuan Investment Co., Ltd. * (深圳市百业源
Refers to
Controlling Shareholder 投资有限公司)
Company or the Joincare Pharmaceutical Group Industry Co., Ltd. * (健康元
Refers to
Company 药业集团股份有限公司)
GDR Refers to Global Depository Receipts
Center For Drug Evaluation (国家药品监督管理局药品审
CDE Refers to
评中心)
FDA Refers to U.S Food and Drug Administration
GMP Refers to Good Manufacturing Practice
GSP Refers to Good Supply Practice
BE Refers to Bioequivalence
MVR Refers to Mechanical Vapor Recompression
QC Refers to Quality Control
ROI Refers to Return on Investment
R&D Refers to Research and Development
Livzon Pharmaceutical Group Inc.* (丽珠医药集团股份有
Livzon Group Refers to
限公司)
Shenzhen Haibin Pharmaceutical Co., Ltd.* (深圳市海滨制
Haibin Pharma Refers to
药有限公司)
Xinxiang Haibin Pharmaceutical Co., Ltd. * (新乡海滨药业
Xinxiang Haibin Refers to
有限公司)
Shenzhen Taitai Pharmaceutical Co., Ltd. * (深圳太太药业
Taitai Pharmaceutical Refers to
有限公司)
Joincare Haibin Pharmaceutical Co., Ltd.* (健康元海滨药业
Joincare Haibin Refers to
有限公司)
Shenzhen Taitai Genomics Inc. Co., Ltd. * (深圳太太基因
Taitai Genomics Refers to
工程有限公司)
Jiaozuo Joincare Bio Technological Co., Ltd.* (焦作健康元
Jiaozuo Joincare Refers to
生物制品有限公司)
Topsino Refers to Topsino Industries Limited * (天诚实业有限公司)
Shenzhen Fenglei Electric Power Investment Co., Ltd. * (深
Fenglei Electric Power Refers to
圳市风雷电力投资有限公司)
Health Pharmaceutical (China) Co., Ltd. * (健康药业（中
Health China Refers to
国）有限公司)
Shanghai Frontier Health Pharmaceutical Technology Co.,
Shanghai Frontier Refers to
Ltd. * (上海方予健康医药科技有限公司)
Joincare Research Henan Joincare Biomedical Research Institute Co., Ltd.*(河
Refers to
Institute 南省健康元生物医药研究院有限公司)
Livzon MABPharm Inc. * (珠海市丽珠单抗生物技术有限
Livzon MAB Refers to
公司)
Zhuhai Livzon Diagnostics Inc. * (珠海丽珠试剂股份有限
Livzon Diagnostics Refers to
公司)
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Livzon Group Xinbeijiang Pharmaceutical Manufacturing
Livzon Xinbeijiang Refers to
Inc.* (丽珠集团新北江制药股份有限公司)
Livzon Group (Ningxia) Pharmaceutical Manufacturing Co.,
Ningxia Pharmaceutical Refers to
Ltd.* (丽珠集团（宁夏）制药有限公司)
Gutian Fuxing Pharmaceutical Co., Ltd. * (古田福兴医药有
Gutian Fuxing Refers to
限公司)
Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.* (丽
Fuzhou Fuxing Refers to
珠集团福州福兴医药有限公司)
Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing
Livzon Hecheng Refers to
Co., Ltd. * (珠海保税区丽珠合成制药有限公司)
Livzon Group Limin Pharmaceutical Manufacturing Factory
Livzon Limin Refers to
* (丽珠集团利民制药厂)
Livzon Pharmaceutical Livzon Group Livzon Pharmaceutical Factory * (丽珠集团
Refers to
Factory 丽珠制药厂)
Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. *
Shanghai Livzon Refers to
(上海丽珠制药有限公司)
Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. *
Sichuan Guangda Refers to
(四川光大制药有限公司)
Jiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co.,
Jiaozuo Hecheng Refers to
Ltd. * (焦作丽珠合成制药有限公司)
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. * (焦作金冠
Jinguan Electric Power Refers to
嘉华电力有限公司)
Tianjin Tongrentang Group Co., Ltd. * (天津同仁堂集团股
Tianjin Tongrentang Refers to
份有限公司)
COVID-19 pandemic or The outbreak of the disease caused by a new coronavirus
Refers to
pandemic called SARS-CoV-2
Reporting Period Refers to From 1 January 2023 to 30 June 2023
End of the Reporting
Refers to 30 June 2023
Period
Currency or unit Refers to RMB unless otherwise specified
*For identification purpose only
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Chapter 2 Company Profile and Major Financial Indicators
I Company profile
Chinese name of the Company 健康元药业集团股份有限公司
Abbreviation of the Chinese name 健康元
English name of the Company Joincare Pharmaceutical Group Industry Co., Ltd
Abbreviation of the English name Joincare
Legal representative of the Company Zhu Baoguo
II Contact persons and contact details
Board Secretary Representative of Securities Affairs
Name Zhao Fengguang (赵凤光) Li Hongtao (李洪涛), Luo Xiao (罗逍)
Joincare Pharmaceutical Group Building, No. Joincare Pharmaceutical Group Building, No.
Address 17, Langshan Road, North District, Hi-tech 17, Langshan Road, North District, Hi-tech
Zone, Nanshan District, Shenzhen Zone, Nanshan District, Shenzhen
Telephone 0755-86252656, 0755-86252388 0755-86252656, 0755-86252388
Fax 0755-86252165 0755-86252165
lihongtao@joincare.com
E-mail zhaofengguang@joincare.com
luoxiao@joincare.com
III Introduction of the Company's basic information
Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North
Registered address
District, Hi-tech Zone, Nanshan District, Shenzhen
Registered at B5, Hengfeng Industrial City, Hezhou Community, Huangtian
Village, Xin’an Town, Bao’an County on 18 December 1992
Changed its registered address to 4-5/F, Dongpeng Building, Shangmeilin
Industrial Area, Futian District, Shenzhen on 25 May 1994
Changed its registered address to 24/F, Block B, Fujian Building, Caitian South
Road, Futian District, Shenzhen on 4 July 1995
Changed its registered address to 23/F, Diwang Building, Shun Hing Square, No.
333, Shennan East Road, Shenzhen on 20 June 1997
Historical changes in Changed its registered address to Taitai Pharmaceutical Industrial Building, the
registered address 5th Industrial Area, Nanshan District, Shenzhen on 22 September 2000
Changed its registered address to 23/F, Diwang Building, Shun Hing Square, No.
5002, Shennan East Road, Luohu District, Shenzhen on 4 June 2003
Changed its registered address to Joincare Pharmaceutical Group Building, No.
17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen on
29 January 2008
Changed its registered address to Joincare Pharmaceutical Group Building, No.
17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen on
27 November 2012
Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District,
Office address
Hi-tech Zone, Nanshan District, Shenzhen
Postal code of Office
518057
address
Website http://www.joincare.com
E-mail joincare@joincare.com
Index for query of changes
There was no change during the Reporting Period
during the Reporting Period
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IV Introduction of changes in information disclosure and places for inspection
Name of designated newspapers
China Securities Journal, Securities Times, Securities Daily, and
for information disclosure by the
Shanghai Securities News
Company
Website for publication of the
http://www.sse.com.cn
interim report
Place for inspection of the interim
Office address of the Company
report of the Company
Index for query of changes during
There was no change during the Reporting Period
the Reporting Period
V Company stock profile
Stock abbreviation
Class of stock Listed on Stock Abbreviation Stock code
prior to change
Shanghai Stock
A Share 健康元 600380 太太药业, S健康元
Exchange
Joincare Pharmaceutical
GDR SIX Swiss Exchange JCARE /
Group Industry Co., Ltd.
VI Other relevant information
□Applicable √N/A
VII Principal accounting data and financial indicators of the Company
(I) Principal accounting data
Unit: Yuan Currency RMB
Increase/decrease for
Reporting Period Same Period of Last the Reporting Period as
Principal accounting data
(From January to June) Year compared to the same
period last year (%)
Revenues 8,719,741,599.23 8,564,945,285.55 1.81
Net profit attributable to
Shareholders of the listed 815,434,734.90 801,268,519.50 1.77
company
Net profit attributable to
Shareholders of the listed
781,744,142.18 803,994,432.03 -2.77
company after deduction the
extraordinary gain or loss
Net cash flow from
1,257,207,685.54 1,902,953,224.79 -33.93
operating activities
Increase/decrease as at
the end of the
As at the End of the As at the End of the
Reporting Period as
Reporting Period Last Year
compared to the end of
last year (%)
Net assets attributable to
Shareholders of the listed 13,234,183,227.97 13,121,820,410.55 0.86
company
Total assets 36,241,438,930.34 35,729,253,651.41 1.43
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(II) Principal Financial Indicators
Increase/decrease for the
Reporting Period
Same Period of Reporting Period as
Principal Financial Indicators (From January
Last Year compared to the same
to June)
period last year (%)
Basic earnings per share (RMB/share) 0.4264 0.4235 0.68
Diluted earnings per share (RMB/share) 0.4251 0.4232 0.45
Basic earnings per share after deducting
the extraordinary gain or loss 0.4088 0.4249 -3.79
(RMB/share)
Decreased by 0.36
Weighted average return on net assets (%) 6.29 6.65
percentage points
Weighted average return on net assets
Decreased by 0.64
after deducting the extraordinary gain or 6.03 6.67
percentage points
loss (%)
Description of principal accounting data and financial indicators of the Company
√Applicable □N/A
The net cash flow from operating activities was RMB1,257 million, representing a year-on-year
decrease of 33.93%, this decrease was mainly due to the increased collection of promissory notes,
decreased cash collections, and increased cash payments for purchasing goods during the Reporting
Period.
VIII Differences in accounting data under domestic and foreign accounting standards
□Applicable √N/A
IX Items and amounts of extraordinary gains and losses
√Applicable □N/A
Unit Yuan Currency: RMB
Items of Extraordinary Gains and
Amounts Notes (If applicable)
Losses
Gains and losses on disposal of non-
-342,359.46 Gains from disposal of fixed assets
current assets
Government grants as included in the
profit or loss for the Period, however,
except for those which are closely related
to the normal business of an enterprise, Government grants as included in the
123,344,744.28
comply with the policies of the State and profit and loss for the Period
are continuously entitled with specific
amount or quantity according to certain
standards
Gains and losses on fair value changes
derived from holding of financial assets
held for trading, derivative financial
assets, financial liabilities held for Gains and losses arising from changes in
trading, derivative financial liabilities, fair value of financial assets/liabilities
and investment income generated on -45,351,392.03 held for trading, and investment gains
disposal of financial assets held for from holding and disposal of financial
trading, derivative financial assets, assets/liabilities held for trading
financial liabilities held for trading,
derivative financial liabilities and other
debt investments, except for effective
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hedging activities related to the ordinary
operating business of the Company
Other non-operating income and non-
Other non-operating income and
-5,612,578.23 operating expenses apart from the above
expenses apart from the above items
items
Less: Effect of income tax 12,031,185.95 Effect of the above items on income tax
The portion of the above items to which
Effect of minority equity (after tax) 26,316,635.89
minority shareholders are entitled
Total 33,690,592.72
Explanations for the Company’s extraordinary gain or loss items as defined in the “Explanatory
Announcement No.1 for Public Company Information Disclosures – Extraordinary Gains or Losses”,
and the extraordinary gain or loss items as illustrated in the “Explanatory Announcement No.1 for Public
Company Information Disclosures – Extraordinary Gains or Losses” which has been defined as its
recurring gain or loss items.
□Applicable √N/A
X Others
□Applicable √N/A
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Chapter 3 Management Discussion and Analysis
I Description of the industry in which the Company operates and principal businesses of the
Company during the Reporting Period
(I) Principal businesses and products of the Company
The Company is primarily engaged in the R&D, production and sales of pharmaceutical products and
health care products. The business scope of the Company covers chemical pharmaceuticals, biologics,
chemical active pharmaceutical ingredients (APIs) and intermediates, traditional Chinese medicine
(TCM), diagnostic reagents and equipment, health care products, etc. The enriched product series and
mix provide larger market and growth opportunities for the Company. Main products of the Company
are as follows:
(II) Business model of the Company
With the stable operation and rapid development over the years, the Company has become an integrated
pharmaceutical group that is driven by scientific research and innovation, integrating the R&D,
production, sale and service of pharmaceutical and health care products. It has complete systems of
R&D, procurement, production and sale. Main business models of the Company are as follows:
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1. R&D
Taking independent R&D as the mainstay and combining external introduction and cooperative
development, the Company has been paying attention to the cutting-edge technology and unmet clinical
needs, with efforts focused on innovative drugs and high-barrier complex formulations, and has
established an efficient R&D innovation management model. In terms of independent innovation, the
Company has a diversified and multi-dimensional R&D organization with mature R&D teams for
chemical pharmaceuticals, biologics, TCM drugs, APIs, diagnostic reagents and health care products.
Based on technology platform construction, the Company has built a clear product R&D pipeline
centering on key areas such as respiratory, tumor immunity and psychiatry. In terms of cooperative
innovation, the Company has launched technical cooperation with domestic and foreign scientific
research institutions by way of commissioned development or cooperative development, and has
introduced new technologies and products that meet the strategic development goal of the Company
through technology transfer or license-in to implement industrial transformation, so as to reinforce and
strengthen our position and strategy in the leading and emerging fields.
2. Procurement
In terms of procurement, the Company pays strict attention to effectiveness, quality and cost of
procurement and has established long-term and stable partnership with many suppliers. Active
pharmaceutical ingredients, supplementary materials, and packaging materials were purchased and
stocked up by manufacturers according to production schedules. The Company has developed strict
quality standards and procurement management systems, and required subordinate manufacturers to
make procurements in accordance with the GMP. Meanwhile, the Company established long-term
strategic partnerships with bulk material suppliers, and strengthened the management of supply quality
and cost control based on strict quality standards. The Company has established an internal evaluation
system and files of market prices so as to promptly acquire market information for procurement through
comparisons of quality and price.
3. Production
In terms of production, the Company adopts the principle of market demand-oriented approach paying
attention to real market demand. Specifically, the Sales Department of the Company investigated market
demands, made sales plans, and comprehensively considered factors such as the product inventory
quantity and capacity of production lines of the Company so as to determine the monthly production
quantities and specifications. Moreover, the purchase orders of raw materials are determined according
to the production schedule and the inventory levels of raw materials. The final production plans are
issued upon approval of the management of the Company and implemented by the Production and
Technology Departments of the Company.
The Company has been carrying out production in strict accordance with the GMP. The Company and
its affiliates have established a sound quality management system and implemented the qualified-person
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system. In terms of quality control, the Company has established a strict and sound production quality
assurance system, and is geared to international standards and subject to international certification while
in compliance with national standards. The Company conducts annual GMP self-inspection, ISO9001
internal and external audits, and is subject to various external audits. It actively pursued the
internationally advanced GMP management, and implemented whole-process quality control over
supplier selection, audit, incoming material inspection, production process, product release from factory,
and market tracking. The system is running well.
4. Sales
(1) Drug formulation products
End customers of drug formulation products (chemical pharmaceuticals, biologics, traditional Chinese
medicine) of the Company are mainly hospitals, clinics, and retail pharmacies. In line with the
pharmaceutical industry practice and the sales model of most peers in the industry, the Company has
conducted sales of drug formulation products through drug distribution enterprises. The Company
carried out selection and centralized management of qualified drug distribution enterprises (with Drug
Supply Certificate, GSP Certification, etc.) according to their distribution capability, market familiarity,
financial strength, credit record, and operation scale. General sales process: After end customers place
purchase orders to distribution enterprises, drug distribution enterprises will send those orders to the
Company according to their inventories, distribution agreements and conditions; then, the Group will
deliver products to drug distribution enterprises and do the revenue recognition.
(2) APIs and intermediates
Main target customers of APIs are large pharmaceutical manufacturers. The selling prices are
determined based on a set of integrated factors such as costs of production, inventory levels, industry
rivalry and market trend. Specific pricing method: The sales and marketing department conduct weekly
or bi-weekly meetings to analyze the current market conditions, the trends and drivers of prices. The
selling prices are determined based on a set of comprehensive factors such as costs of production,
inventory levels, industry rivalry and market conditions. The selling prices will be effective once they
are reported by the managers of the sales department to our management team and get approvals.
Specific sales methods of APIs include: ① Domestic market: The Company directly signs product
sales contracts with large manufacturers to directly sell products to customers. Meanwhile, the Company
also sells products through distributors. ② Foreign market: The Company directly sells products in the
foreign market, and products are sold through distributors in areas with high market and political risks;
At present, products of the Company are mainly exported to over 60 countries and regions in Asia,
Europe, North America, and Africa.
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(3) Diagnostic reagents and equipment
Diagnostic reagents and equipment are sold by the Company both domestically manufactured and
imported. Main end customers are hospitals, centers for disease control and prevention, and health
departments. The Company mainly sells those products in combination with direct sales and sales
through drug distribution enterprises.
The Company has an experienced sales team responsible for the sales of diagnostic reagents and
equipment, with provision of marketing support for some drug distribution enterprises. The Company
carried out selection and centralized management of qualified drug distribution enterprises (with Drug
Supply Certificate, GSP Certification, etc.) according to their distribution capability, market familiarity,
financial strength, credit record, and operation scale.
(4) Health care products
The sales model of health care products is mainly distributor management model. Product promotion,
price control, and channel carding are managed and improved with the distributor distribution channels
and terminal coverage capability. At present, the Company has set up 27 provincial branches and 37
subordinate offices across China and maintained long-term partnership with distributors with better area
coverage capability for stable strategic alliance and common development. The Company has
cooperated with about 103 first-level/primary distributors in total, including 1,260 businesses in drug
distribution line and approximately 29 businesses in food distribution line, with more than 450,000
subordinate secondary businesses and terminal businesses in drug and food distribution lines. Products
are well managed and promoted through the tiered marketing channels. In addition to the traditional
distribution management model, the Company realizes synergetic development through online channels.
At present, the Company has set up official flagship stores on mainstream e-commerce platforms such
as Tmall （天猫）, Jingdong（京东）, Douyin（抖音）, Kuaishou （快手） and Pinduoduo（拼多
多）.
(III) Analysis of industry development
The pharmaceutical industry is a national strategic emerging industry bearing on the national economy
and people's livelihood, and an important part of the national economy. According to the “14th Five-
Year Plan for the Development of Pharmaceutical Industry”(《“十四五”医药工业发展规划》), the
overall development of the pharmaceutical industry will reach a new level. During the "13th Five-Year
Plan" period, the average annual growth rate of the added value of pharmaceutical industry above
designated scale was 9.5%, 4.2 percentage points higher than the overall industrial growth rate, and the
proportion of the total added value of the pharmaceutical industry to that of all industries increased from
3.0% to 3.9%; the average annual growth rates of the operating revenues and total profit of enterprises
above designated scale were 9.9% and 13.8%, respectively, being at the forefront of various industries
in terms of growth rates. At the same time, the scale of leading pharmaceutical manufacturers has further
expanded with the steadily increasing industry concentration. In the first half of 2023, with the
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deepening reform of the national medical and healthcare system and increasing improvement in the
innovation environment, the pharmaceutical industry continued to advance towards high-quality
development featuring transformation, upgrading and encouraging innovation. As China's population
ages and urbanization rates continue to rise, from the long-term and holistic perspective, China's
pharmaceutical industry will continue on a promising trajectory.
According to data from the National Bureau of Statistics, in the first half of 2023, enterprises in the
pharmaceutical manufacturing industry above designated scale in China have realized revenues of
RMB1,249.6 billion, representing a year-on-year decrease of 2.9%; operating costs were RMB713.01
billion, representing a year-on-year decrease of 1.8%; total profits reached RMB179.45 billion,
representing a year-on-year decrease of 17.1%.
(IV) Industry status of the Company
Through years of development, the Company has become an integrated pharmaceutical enterprise
covering multiple sectors including chemical pharmaceuticals, chemical APIs and intermediates,
traditional Chinese medicine, diagnostic reagents and equipment as well as health care products.
chemical pharmaceuticals are the largest revenue generator of the Company, among which drugs for
gastroenterology and gonadotropic hormones are traditional competitive products of the Company, with
key products securing a long-term leading position in national pharmaceutical formulation market
segment, and respiratory and psychiatry products have been the strategic focus of the Company, with
key products maintaining a strong sales growth momentum.
During the Reporting Period, the Company, leveraging its robust R&D and production capabilities and
steady marketing presence, the Company ranked Top 10 in “2022 Annual Ranking of Top 100 Chinese
Chemical Drug Enterprises”.
(V) Performance drivers in the Reporting Period
In the first half of 2023, amid the macro environment of weak recovery of domestic economy and
tightening of industry regulation and access policy, the growth rate in the Company's performance
slowed down due to factors such as a decrease in the volume-based procurement price of its key product
Meropenem for injection and intensified competition in the APIs market. During the reporting period,
the Company steadfastly the dual-driver strategy of "innovative drugs + high-barrier complex
formulations", focusing on unmet clinical needs to accelerate its transformation into an innovative
pharmaceutical company. While strengthening its independent R&D capabilities, the Company had
introduced multiple new medicine projects through external acquisitions and co-development,
comprehensively expanding the layout of its R&D pipeline. This strategic approach continuously
reinforces the company's leading position in areas such as respiratory and gastroenterology.
II Analysis of core competitive strengths during the Reporting Period
√Applicable □N/A
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1. PRC’s leading integrated pharmaceutical company under continuous innovation and
development
The Company is primarily engaged in the R&D, production and sale of pharmaceutical products and
health care products. The business scope of the Company covers chemical pharmaceuticals, chemical
APIs and intermediates, traditional Chinese medicine, diagnostic reagents and equipment, as well as
health care products, enabling the Company to establish an advantageous market position cross various
therapeutic fields such as respiratory, anti-infection, assisted reproduction, gastroenterology, psychiatry,
and tumor immunity. 1) Innovative R&D drives growth: The Company has developed and launched a
number of blockbuster products and high-barrier complex formulation products, strengthening the
Group’s product portfolio and drug candidates in the pipeline. 2) The Company has first-rate
commercialization ability, and its sales network covers all provinces in China and over 80 countries and
regions in the world. The Company emphasizes scientific promotion and evidence-based marketing. By
building a professional marketing team, a fine marketing development system has been formed, and
market education and brand building have been deeply strengthened through digital marketing. With
such efforts, a diversified marketing system has been established. Leveraging our well-established sales
channels, broad end-user coverage, leading digital marketing and strong brand awareness, the Company
efficiently realizes large-scale sales post-product approval. 3) Cross-industry and multi-specialist
innovative R&D and coordinated development: On the one hand, the Company actively adapts to the
changes in the pharmaceutical market and constantly adjusts its product strategy and R&D direction
according to policies and clinical needs, achieving the ongoing iteration and upgrade of main products;
On the other hand, the Company fully utilizes external scientific research and commercial resources,
such as strategic collaboration with Chinese Academy of Sciences, Tencent Quantum Lab and other
scientific research institutes and innovative companies, and invests in cutting-edge biotechnology
companies to expand the Company's product matrix and R&D pipeline, ultimately achieving the
Company's sustainable development.
2. Strong R&D capability, diversified product matrix and leading commercialization capabilities
Focusing on innovative drugs and high-barrier complex formulations, the Company has formed
diversified product matrix. With the huge clinical demand and high product quality, it has established
market competitive advantages in many pharmaceutical segments. The Company's chemical
pharmaceuticals cover gastroenterology diseases, assisted reproduction, infectious diseases, respiratory
diseases, psychiatric and neurological diseases, tumor and other disease treatment fields, among which
alimentary canal proton pump inhibitor (PPI) drugs, gonadotropic hormones drugs, and inhalation
formulations for respiratory system diseases have an advantageous market position. Relying on APIs,
the Company’s core products, together with chemical APIs and intermediates, form a stable
pharmaceutical industry chain of “APIs-formulations vertical integration”. Meanwhile, the Company
actively develops overseas markets, and its products are marketed and distributed worldwide, facilitating
strategic cooperation with many internationally renowned pharmaceutical companies. In addition, the
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Company also has a number of traditional Chinese medicine and in vitro diagnostic reagent products,
and has accumulated resources and wide brand influence in health care products for many years.
3. Making breakthroughs in the key R&D and industrialization technologies of complex
formulations
The technology platform, which has been developed over the years in the field of innovative drugs and
high-barrier complex formulations, enables the Company to address the complex process problems in
the R&D and production of relevant drugs. Guided by clinical value, the Company develops R&D
projects with high short-term certainty and cutting-edge technologies with long-term growth potential
(such as AI-driven drug molecular design, proteolysis targeted chimera (PROTAC), synthetic biology,
gene editing and cell therapy). All in all, the Company's R&D system covers through-cycle of drug
development and production. Based on the mature R&D platform of innovative drugs and high-barrier
complex formulations, the Company has designed a rich pipeline in fields with significant clinical
demand such as respiratory, gastroenterology, assisted reproduction, psychiatry and tumor.
4. A stable senior management and R&D team with expertise, long-term vision and commitment
to corporate social responsibility
The Company has a stable, visionary and experienced, results-oriented management team and an
outstanding talent team. Outstanding leaders are the key to the Company's rapid development. The
founder of the Company has over 30 years of expertise in the pharmaceutical industry as well as a global
vision and a strategic mindset. With a deep industry insight, the founder has led us developing platform
technologies centered on high-barrier complex formulation, which has established leading position of
the Group with sustainable development in the broader healthcare industry
The senior management team of the Company has over 20 years of industry experience on average, with
an average of more than 10 years of service in the Company, and has a thorough understanding of market
demand, industry development and growth opportunities. Each key R&D field of the Company is led
by industry-leading scientists and accompanied by an efficient R&D management team. In addition, the
Company has upheld the core value of “Putting People First, Valuing Workmanship and Quality,
Pursuing Innovation and Truth, Promoting Cooperation and Sharing” and laid emphasis on talent team
training to build a diversified talents pool with global vision, advanced knowledge, strong execution
capability and sense of ownership. Driven by the corporate culture of pursuing excellence, the talent
team works diligently and conscientiously to jointly contribute to the sustainable development of the
enterprise through teamwork and collaboration.
III Discussion and analysis of business conditions
1. Main business conditions during the Reporting Period
During the Reporting Period, the Company realized revenues of RMB8,720 million, representing a year-
on-year increase of approximately 1.81%; a net profit attributable to shareholders of the listed company
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of RMB815 million, representing a year-on-year increase of approximately 1.77%, and a net profit
attributable to shareholders of the listed company after deducting the extraordinary gains or loss of
RMB782 million, representing a year-on-year decrease of approximately 2.77%. Business development
of various segments of the Company is as follows:
(1) Livzon Group (excluding Livzon MAB)
As at the End of the Reporting Period, the Company directly and indirectly held 44.77% equity interest
in Livzon Group (000513.SZ, 01513.HK). During the Reporting Period, Livzon Group (excluding
Livzon MAB) realized revenues of RMB6,678 million, representing a year-on-year increase of
approximately 6.08%; and thus it contributed a net profit of approximately RMB607 million attributable
to shareholders of the Company.
During the Reporting Period, the sales of the chemical pharmaceuticals segment of Livzon Group
maintained stable growth, and recorded the stable growth in the proportion and profitability of high-end
specialty APIs in the API segment. The sales of its products in the key therapeutic areas are as follows:
Gastroenterology products realized revenues of RMB1,625 million, representing a year-on-year
decrease of approximately 7.75%; gonadotropic hormones products realized revenues of RMB1,376
million, representing a year-on-year increase of approximately 2.71%; and psychiatry products realized
revenues of RMB278 million, representing a year-on-year increase of approximately 5.31%.
(2) Livzon MAB
As at the end of the Reporting Period, the Company held 55.90% equity interest in Livzon MAB, which
contributed the amount of approximately RMB-241 million to the Company's net profit attributable to
shareholders of the listed company for the current period.
Livzon MAB continued to focus on new molecules, new targets and differentiated molecular designs in
the fields such as autoimmune diseases, vaccines, oncology and assisted reproduction to consistently
push forward the R&D of key projects. During the Reporting Period, the progress in R&D of biological
products was set out as below:
The application for launch on Tocilizumab Solution for Injection (Atvtia) (托珠单抗注射液(安维泰
)) had been approved for indications include rheumatoid arthritis, cytokine release syndrome (CRS)
and juvenile idiopathic arthritis (sJIA). Recombinant Human Choriogonadotropin alfa for Injection (注
射用重组人绒促性素) was approved for launching in 2021 and had started sales, which is the first
generic drug of its kind in China. Livzon MAB continued to actively promote overseas registrations; the
drug had been approved for launching in Tajikistan, and its submission of registration materials had
been completed in Indonesia, Pakistan, five countries in Central and South America and two countries
in Central Asia. Recombinant Human Follitropin Alfa Solution for Injection (重组人促卵泡激素注射
液) and Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody Injection (重组抗人 IL-
17 A/F 人源化单克隆抗体注册液) have conducted phase III clinical trial. Recombinant Anti-human
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IL-17A/F Humanized Monoclonal Antibody Injection (重组抗人 IL-17 A/F 人源化单克隆抗体注册
液) is the first drug to be compared with IL-17A marketed drug for positive control phase III clinical
trial in China. The results of phase II clinical trial show that the product has the clinical advantages of
faster onset of action, better and longer duration of efficacy, showing better efficacy as compared with
IL-17A single-target agents (IL-17A 单靶点药物) and is expected to provide a potentially better
solution for the psoriasis treatment in China. In July 2023, the Recombinant SARS-COV-2 Bivalent
(Original/Omicron XBB) Fusion Protein Vaccine (CHO Cell) (重組新型冠状病毒融合蛋白二价(原
型株/Omicron XBB 变异株)疫苗(CHO 细胞)) was approved for clinical trial.
With the successive approvals for market launch of its products, LivzonMAB has enriched relevant
teams such as pharmacovigilance, production quality and production-sales connection, gradually
improved the GMP system and industrialization capabilities and enhanced the overall operational
capabilities.
(3) Joincare (excluding Livzon Group and Livzon MAB)
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of
RMB2,194 million, representing a year-on-year decrease of approximately 7.48%, and realized a net
profit attributable to shareholders of listed companies of RMB445 million, representing a year-on-year
increase of approximately 5.70%. Joincare realized a net profit attributable to shareholders of the listed
company after deducting the extraordinary gains and losses of RMB435 million, representing a year-
on-year increase of approximately 5.01%. Key results of the main business segments and core products
are as follows:
①Prescription medicines
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales
revenues of RMB923 million from prescription drug segment, representing a year-on-year decrease of
approximately12.88%. Among which, the sales revenues and year-on-year change of key therapeutic
areas are as follows: the revenues generated from the field of respiratory totaled RMB809 million,
representing a year-on-year increase of 44.08%; the revenues generated from the field of anti-infection
totaled RMB102 million, representing a year-on-year decrease of 79.17%.
In the first half of 2023, the Company continued to accelerate the formation of the national sales team
in respiratory line, and further established the four-level fine management system of regional managers,
provincial general managers, provincial managers and development managers. The Company actively
took various measures to accelerate the development of its key products, especially its exclusive product,
Tobramycin Inhalation Solution (妥布霉素吸入溶液), and thus drive sales volume of such products:
firstly, it enhanced the assessment of the coverage rate and fulfillment rate, accelerated the development
of various respiratory products, and in the first half of the year, the Company developed 559 hospitals
above grade II, so that its respiratory products covered over 3,800 hospitals above grade II; secondly, it
seized the opportunity of the inclusion of the Levosalbutamol Hydrochloride Nebulizer Solution (盐酸
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左沙丁胺醇雾化吸入溶液) in the regular national reimbursement drug list to continue the rapid
coverage and sales growth; thirdly, it continuously advanced construction of digital marketing platforms,
utilizing digital methods to expedite the marketing process and comprehensively promoted the brand
via the platform of “Respiratory Experts' Views” (呼吸专家说); fourthly, it refined the distribution
management, and currently, there are 2 main warehouses and 10 regional warehouses nationwide, with
the same day delivery within the province and 2-day delivery in the neighbouring provinces, which
effectively ensured the timely and efficient distribution of drugs.
The key R&D projects of the Company's inhalation formulations made progress in stages: Formoterol
Fumarate Inhalation Solution (富马酸福莫特罗吸入溶液), Indacaterol Maleate Powder for Inhalation
(马来酸茚达特罗吸入粉雾剂), and Fluticasone Propionate Inhalation Suspension (丙酸氟替卡松雾
化吸入用混悬液) had been in the stage of launch application review, of which Formoterol Fumarate
Inhalation Solution was approved for launching in July 2023. Salmeterol Xinafoate-Fluticasone
Propionate Powder for Inhalation (沙美特罗替卡松吸入粉雾剂) was applied for production, which
was the first domestic generic drug to submit a registration application after the publication of the new
inhaled formulation BE guidance principles since 2020. In terms of medical devices, the Company
continued to develop medical devices compatible with its owned inhalation formulations, Mini360+, a
mesh nebulizer designed for used with Tobramycin Solution for Inhalation, had obtained the registration
certificate of Class II medical device. Futhermore, while ploughing into advantageous technology
platforms such as inhalation formulations, the Company was actively expanding other high-barrier
complex formulation platforms, The successful completion of the bioequivalence study for Meloxicam
Nanocrystalline Injection ( 美 洛 昔 康 纳 米 晶 注 射 液 ) marks a significant breakthrough in the
nanocrystalline technology platform.
While continuously strengthening independent innovation, the Company also continued to deepen the
core areas of varieties of cooperative development and licensing introduction to leverage on the global
advantageous resources and cutting-edge technologies to strengthen the Company's commercialization
and integration capabilities. During the Reporting Period, the Company made significant progress in the
field of business development (BD), introducing multiple innovative medicines, expanding into other
indications in the respiratory system and accelerating the Company's transformation into an innovative
pharmaceutical company. Among these endeavors, TG-1000 is an innovative PA endonuclease inhibitor,
capable of effectively inhibiting both influenzas A and B viruses; It has completed Phase II clinical
studies and is poised to enter Phase III clinical trials. XYP-001, a modified new drug for the treatment
of Idiopathic Pulmonary Fibrosis (IPF), is currently in Phase I clinical trials, continues to advance in its
clinical study efforts.
②APIs and intermediates
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sale
revenues of RMB1,060 million from APIs and intermediates segment, representing a year-on-year
decrease of approximately 7.82%.
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During the Reporting Period, in the API segment, Joincare adhered to the management concept of “green
production, cost reduction and efficiency enhancement”, focused on the transformation and upgrading
of production equipment, enhanced the establishment of the quality management system and
strengthened the construction of safety and environmental management, guaranteeing the steady
improvement in the production and yield of key products of the Company. In terms of marketing, the
price of the Company's key product 7-ACA declined, and the Company maintained its advantage
position in market share by strengthening the in-depth cooperation with strategic customers and actively
expanding domestic and international markets. Another key product, Meropenem Trihydrate (美罗培
南混粉), is facing challenges such as intensified international market competition and pricing pressures.
The Company had taken active measures to maintain its existing market share, at the same time, the
Company also actively expanded its overseas business to carry out a number of applications for the
registration of Meropenem aseptic powder and crude product so as to enhance the Company's
profitability. Furthermore, the Company leveraged on its advantages of APIs - formulations vertical
integration, actively expanded the domestic API market. It has established collaborations with several
domestic manufacturers to minimize the impacts of volume-based drug procurement.
In terms of APIs R&D, the Company focused on its R&D activities in two cutting-edge fields, synthetic
biology and biocatalysis: in the construction of synthetic biology platform, the Company further
strengthened the research of system biology and synthetic biology mainly against Escherichia coli,
filamentous fungi and streptomycetes, completed the research of the modification and screening of over
10 genes of high-yield L-phenylalanine strains, and substantially increased the positive rate of the
protoplasmic transformation screening of the filamentous fungi, which significantly shortened the
research and development cycle of genetic modification experiments for the filamentous fungi like
cephalosporium acremonium, and thus laid down a technological foundation for further development of
multi-genetic modification methods of cephalosporium acremonium. In the construction of biocatalytic
platform, the Company prepared the primary version of SOP for protein structure prediction using
AlphaFold 2, and completed the structure prediction of 60% key proteins on the anabolic pathway of
CPC in cephalosporium acremonium by using the cloud computing platform. Meanwhile, the Company
completed the computer simulations for key genes by applying a computer-aided protein engineering
technology platform. As at the end of the Reporting Period, Joincare Research Institute had applied for
a total of 11 national invention patents (with 1 granted), 8 utility model patents (with 4 granted), 1
software copyright. Moreover, the Company published 2 high-level academic papers.
③Health care products and OTC drugs
During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of
RMB202 million from health care products and OTC segment, representing a year-on-year increase of
approximately 33.17%.
During the Reporting Period, the Company had established user-centric data-driven digital marketing
system as the core, leading to steady growth in sales performance. In terms of content marketing, the
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Company promoted its performance growth by content marketing and cooperation with top steamers,
and the ROI had reached a record high under the model of combining short video and flagship broadcast.
Dexamethasone Acetate (意可贴) had a total exposure of 220 million in the first half of the year. The
view counts of video had broken 100 million on Douyin (抖音), the brand word for mouth ulcer ranked
first on the RED (小红书), and the flagship broadcast for Taitai (太太), Eagle’s (鹰牌) and Jingxin (静
心) were gaining popularity. In terms of online sales channels, the Company recovered the right to self-
operation on JD.com, expanding the sales channels on Douyin to improve the efficiency of content
conversion, and expand the gift-giving audiences through the development of large-size gift boxes. In
terms of offline channel sales, the Company cultivated new users through the cooperation of offline
chains to carry out brand project-based activities and patient education, and it re-deployed the drug line
channels and new retail channels, the targeted cooperating chains for the drug line channels had reached
over 3,900 with more than 1,000 pure sales distributors and 11 national-scale major chain stores, fully
covering the top 50 chain stores. In terms of new offline retail channels, in the first half of the year, the
Company developed its present in five cities in three provinces, covering more than 2,800 outlets with
additional 819 new shops. At the same time, the Company had established the benchmark chains for its
offline sales channels, such as Walmart, FamilyMart, LAWSON, 7-11 and other convenience store
system, which significantly increasing the channel penetration rate, and thereby boosting the brand sales.
2.Business plans in the second half of 2023
In the second half of 2023, the major tasks in various business segments of the Company are set out as
follows:
(1) R&D Center
R&D and innovation is the source to maintain corporate vitality and the core driver for the Company’s
sustainability. In the second half of 2023, the Company will continuously beef up and improve its in-
house development capabilities with a focus on the core fields such as respiratory, gastroenterology,
psychiatry, assisted reproduction and antitumor, and firmly and fully execute its dual-drive strategy of
developing platforms of both innovative medicines and high-barrier complex formulation to effectively
facilitate the research and clinical development of existing core products including TG-1000, XYP-001,
and Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody for Injection (重组抗人 IL-
17A/F 人源化单克隆抗体注射液), to build a differentiated product pipeline. The Company will
accelerate the establishment of R&D platforms, and redouble efforts to advance the commercialization
of innovative medicines, inhalation products, sustained-release microspheres, monoclonal antibody drug,
micro-nanocrystals formulations and other technology platforms. In addition, by focusing on its
advantageous fields and paying close attention to the cutting-edge technologies and business
opportunities in the international markets, the Company will enhance external cooperation through
cooperative development, licensing-in and other means, to introduce more innovative drug projects and
improve the construction of product portfolio in its advantageous fields.
(2) Production Center
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The Company will ensure workplace safety and product quality by constant improving quality
management system and implementing product quality-centered risk control. While emphasizing
checking raw and auxiliary materials, production sites and production process will also be inspected.
According to six detecting systems in GMP to identify workplace safety risks, the Company will
continuously optimize the production process by introducing green synthetic technology and synthetic
biology technology. Additionally, it will develop the employee training system for improving their
professional skills to further ensure product stability and quality. The Company will keep reducing costs
and improving efficiency through introducing advanced technology and equipment, production
optimization, system improvement and lean management, to effectively improve the production and
operation. The Company will adhere to green development, uphold and promote the concept of green,
healthy and sustainable development. To effectively implement energy conservation, emission reduction
and green production, the Company will enhance the environmental protection and quality standards
and requirements, set environmental protection targets, and strengthen monitoring of energy
consumption, pollutant emissions and other environmental information in the production and operation.
The Company will also keep optimizing production capacity, advance the construction of the new
production line and Jiaozuo Jianfeng Biotechnology Co., Ltd. as planned, follow up the establishment
of supporting facilities and capacity planning, and improve the technology transformation capacity of
new products to meet the increased market demand for new and existing products.
(3) Sales Center
The key work deployments in marketing of prescription drugs are as follows: 1. Promote the hospital
coverage of core brands and enhance evaluation for fulfillment rate of absolute indicators to ensure the
achievement of goal of the whole year; 2. With the objective of brand building, the company aims to
enhance the practical capability and overall quality of marketing teams, continuing to expand and
reinforce the sales team of hospital channels and attracting excellent talents to join the sales team; 3.
Boost efforts in commerce, production, end-users and other links, rapidly increase market share and
raise brand awareness in all aspects; 4. Continue to advance construction of digital marketing platform
and support for end-user market activities, effectively combine online and offline methods, and enhance
in-depth brand recognition among doctors and patients; 5. Follow up in real time national medical
reform-related policies, strengthen clinical and pharmacoeconomic research of launched products , and
actively respond to medical insurance policy adjustments and volume-based procurement. The
Company will formulate plans and prepare for the National Reimbursement Drug List negotiations of
its key products including Tobramycin Inhalation Solution (妥布霉素吸入溶液), Ilaprazole Sodium for
Injection (注射用艾普拉唑纳) and Triptorelin Acetate Microspheres for Injection (注射用醋酸曲普
瑞林微球).
In terms of marketing and promotion of APIs and intermediates, the Company will further strengthen
construction of sales team, make full use of OKR and strengthen objectives management, to build a
vigorous and highly efficient sales team; continue to deepen cooperation with global strategic customers,
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pursue further development in segments, actively develop customer resources, maintain partnership,
give full play to the strength of the company brand, and establish a long-term, stable and win-win
cooperation model with strategic partners. Moreover, the Company will build good brand reputation in
global market through close cooperation with world-class enterprises. In addition, the Company will
pay close attention to changes in exchange rates and market conditions and promptly adjust sales
strategies.
On-line sales of our health care products have seen a steady growth since the implementation of digital
marketing system. In terms of offline channels for drugs, we have completed organizational structure
reform, deepened the distribution channels and struck strategic cooperation with top 50 pharmacy chains
in China. The Company will empower its sales through brand campaigns, patient education, benchmark
chains building, new product development and other means, with an aim for increasing yields. In terms
of off-line sales of healthcare products, the Company will boost sales by exploring new channels and
building benchmark terminals in light of product strategies. For online channels, in addition to further
implementing digital marketing system with a focus on enhancing overall operational efficiency, the
Company will drive off-site traffic and enhance on-site linkage, while proactively participating big sales
events and delivering festival gift boxes to boost online sales. In terms of content marketing, in the
second half of 2023, the Company will strengthen word of mouth marketing, mainly through
recommendation in social media and endorsement by medical professionals, and constantly expand
brand exposure via vertical KOLs’ livestreaming. In terms of brand marketing and building, we will
continue to deepen the cooperation with industry associations and professional forums, strengthen the
professional building of brands, and carry out corresponding joint cooperation in platform promotion
and festival marketing to expand brand exposure and enhance brand sales. In addition, we will continue
to increase investment in user operations. We have established a special user operation team to attract,
activate and operate users through Wecom. We will improve our WeChat digital mall, loyalty points
and content operation system, cultivate original users through user operation, and develop loyal fans
belonging to the brand.
(4) Functions and strategies
The key function tasks of the Company are as follows: Firstly, we will continue to improve the
organizational structure and institutions in subsidiaries of the Group to increase the management
efficiency and fully advance lean management. Secondly, we will continue to strengthen talent and
policy construction, implement the management by objective system with OKRs and KPIs in tandem,
conduct quarterly rolling dynamic tracking and adjustment under close cooperation and full support of
every department so as to provide powerful service and support for R&D, production and sales. Thirdly,
we will continue to drive corporate cultural construction, increase efforts to communicate corporate
culture and put them into practices in the Group and its subsidiaries to strengthen the cohesion. Fourthly,
we actively give full play to resource advantages of internal and external business cooperation, make
investment strategies, and introduce innovative products and technologies to improve strategic planning
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of the Company. Fifthly, we actively fulfill corporate social responsibility, endeavor to improve
corporate governance level, and promote high-quality and sustainable development.
Material changes in business conditions of the Company during the Reporting Period and matters
occurred during the Reporting Period that had and are expected to have significant impacts on
business conditions of the Company
□Applicable √N/A
IV Overview of business operations during the Reporting Period
(I) Analysis of principal businesses
1 Table for analysis of changes in items related to financial statements
Unit: Yuan Currency: RMB
Amount in the current Amount in the same
Item Change (%)
period period of last year
Revenues 8,719,741,599.23 8,564,945,285.55 1.81
Operating costs 3,273,420,227.03 3,054,392,703.20 7.17
Selling expenses 2,399,063,230.20 2,512,369,792.45 -4.51
Administrative expenses 434,867,895.32 529,828,311.93 -17.92
Financial expenses -122,587,587.38 -130,401,047.67 N/A
R&D expenses 765,166,559.76 707,433,078.44 8.16
Net cash flow from operating activities 1,257,207,685.54 1,902,953,224.79 -33.93
Net cash flow from investing activities -509,260,181.38 -433,259,385.19 N/A
Net cash flow from financing activities -904,436,444.00 -656,811,058.44 N/A
Reasons for changes in net cash flow from operating activities: Mainly due to the increased collection
of promissory notes, decreased cash collections, and increased cash payments for purchasing goods
during the Reporting Period.
Reasons for changes in net cash flow from financing activities: Mainly due to the significant decrease
in borrowings during the Period.
Details of material changes in business type, components or source of profits during the Period
□ Applicable √N/A
3 Analysis of revenues and costs
Principal businesses by industry, product and region
Unit: Yuan Currency: RMB
Principal business by industry
Gross YoY YoY
profit change in change in YoY change in gross
By industry Revenues Operating costs
margin revenues operating profit margin (%)
(%) (%) costs (%)
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Pharmaceutical
Decreased by1.92
manufacturing 8,651,505,930.92 3,225,087,576.49 62.72 1.95 7.48
percentage points
Industry
Increased by 4.39
Service industry 1,288,056.69 420,402.81 67.36 -78.64 -81.17
percentage points
Principal business by product
Gross YoY YoY
profit change in change in YoY change in gross
By product Revenues Operating costs
margin revenues operating profit margin (%)
(%) (%) costs (%)
Chemical Decreased by 1.06
4,477,996,443.20 922,208,230.73 79.41 -4.56 0.61
pharmaceuticals percentage points
Chemical APIs Decreased by 2.58
2,682,754,623.59 1,757,162,775.91 34.50 -3.20 0.77
and intermediates percentage points
Traditional Decreased by 3.49
985,591,533.02 315,931,826.92 67.94 91.60 115.01
Chinese medicine percentage points
Diagnostic
Increased by 2.55
reagents and 297,994,623.29 133,676,710.13 55.14 -13.88 -18.52
percentage points
equipment
Decreased by 44.68
Biologics 113,409,489.23 59,602,491.18 47.44 5.93 607.32
percentage points
Health care Increased by 1.35
87,265,994.18 32,129,014.01 63.18 59.41 53.76
products percentage points
Principal business by region
Gross YoY YoY
profit change in change in YoY change in gross
By region Revenues Operating costs
margin revenues operating profit margin (%)
(%) (%) costs (%)
Decreased by 2.64
Domestic 7,274,024,825.06 2,345,678,968.90 67.75 4.30 13.59
percentage points
Decreased by 2.02
Overseas 1,378,769,162.55 879,829,010.40 36.19 -9.15 -6.19
percentage points
Description of principal businesses by industry, product and region
During the Reporting Period, the Company’s principal businesses generated revenues of RMB8,653
million, representing a year-on-year increase of RMB161 million or 1.89%. Chemical pharmaceuticals
achieved revenues of RMB4,478 million, representing a decrease of 4.56% year-on-year. Among them,
the sales revenues in the field of gastroenterology reached RMB1,625 million, dropping by 7.75% year-
on-year; the sales revenues in the field of gonadorelin hormones amounted to RMB1,376 million,
increasing by 2.71% year-on-year; the sales revenues in the field of respiratory reached RMB809 million,
a year-on-year increase of 44.08%; the sales revenues in the field of anti-infection was RMB300 million,
dropping by 56.00% year-on-year; the sales revenues of psychiatry products was RMB278 million, a
year-on-year increase of 5.31%. Chemical APIs and intermediates achieved revenues of RMB2,683
million, a year-on-year decrease of 3.20%. Traditional Chinese Medicine achieved revenues of RMB986
million, a year-on-year increase of 91.60%. Diagnostic reagents and equipment achieved revenues of
RMB298 million, a year-on-year decrease of 13.88%. Biological achieved revenues of RMB113 million,
a year-on-year increase of 5.93%. Health care products achieved revenues of RMB87 million, a year-
on-year increase of 59.41%.
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4. Investment in R&D
(1) Table for investment in R&D
Unit: Yuan Currency: RMB
Expensed investment in R&D during the Period 566,960,057.64
Capitalized investment in R&D during the Period 179,120,655.17
Total investment in R&D 746,080,712.81
Total amount of investment in R&D as a percentage of
8.56
revenues (%)
(2) Description
During the Reporting Period, total investment in R&D of the Company amounted to RMB746.0807
million, accounting for 8.56% of total revenues. The Company places a strong emphasis on R&D and
innovation, continuously boosted efforts in independent R&D and improved the efficiency of the
conversion of technological results. Meanwhile, the Company strengthened external cooperation and
introduced a number of innovative medicine projects through cooperative development and licensing,
among other means, to consolidate its existing competitive edges and enrich its product pipeline. As of
the disclosure date of this report, the overall R&D efforts of the Company in different segments were as
follows:
1) Chemical pharmaceuticals
① High-barrier complex formulation: There were a total of 50 projects in development, of which, 2
had been launched to the market, 6 had been applied for production, 9 were under the clinical/BE study
and 1 had been approved for clinical trials. The progress of the major projects was as follows:
Inhalation formulations: Formoterol Fumarate Inhalation Solution (富马酸福莫特罗吸入溶液) had
been launched; Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸入粉雾剂), Salmeterol
Xinafoate-Fluticasone Propionate Powder for Inhalation ( 沙 美 特 罗 替 卡 松 吸 入 粉 雾 剂 ) and
Fluticasone Propionate Inhalation Suspension (丙酸氟替卡松雾化吸入用混悬液) had been applied for
production. For class 2 new drug XYP-001, the Company carried out phase I clinical trials.
Sustained-release microspheres: The project of Triptorelin Acetate Microspheres for Injection
(Weibaoning)(注射用醋酸曲普瑞林微球（维宝宁） (1-month sustained release) for prostate cancer
was approved for market launch; endometriosis project had completed the phase III clinical trial and the
central precocious puberty indication is under preparation of materials for communication with CDE.
Aripiprazole Microspheres for Injection (注射用阿立哌唑微球) (1-month sustained release) completed
phase I clinical trial, Octreotide Acetate Microspheres for Injection (注射用醋酸奥曲肽微球) (1-month
sustained release) and Leuprorelin Acetate Microspheres for Injection (注射用醋酸亮丙瑞林微球) (3-
month sustained release) were undergoing BE trials; Alarelin Microspheres for Injection (注射用丙氨
瑞林 微球) (1-month sustained release) had completed phase I clinical trial; Triptorelin Pamoate
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Microspheres for Injection (注射用双羟萘酸曲普瑞林微球) (3-month sustained release) was prepared
for phase I clinical trials.
Other high-barrier complex formulations: Meloxicam Nanocrystal Injection (美洛昔康纳米晶注射
液) was undergoing BE trials. Goserelin Acetate Sustained-release Implant (醋酸戈舍瑞林缓释植入
剂 ) (1-month sustained-release) had carried out the bridging study of pilot-scale and full-scale
production.
② Other key projects in development: There were a total of 40 projects in development, of which, 5
had been launched to the market, 5 had been applied for production, 6 were under the clinical/BE study.
The progress of the major projects was as follows: Long Chain Fat Emulsion Injection (长链脂肪乳注
射液) (OO), Biapenem for Injection (注射用比阿培南), Voriconazole for Injection (注射用伏立康唑)
and Blonanserin Tablets(布南色林片) were approved for market launch and Ilaprazole Sodium for
injection ( 注 射 用 艾 普 拉 唑 钠 ) with new indication had been approved; Voriconazole for Oral
Suspension (伏立康唑干混悬液), Perospirone Hydrochloride Tablets (盐酸哌罗匹隆片), Lurasidone
Hydrochloride Tablets (盐酸鲁拉西酮片) and Progesterone Injection(黄体酮注射液) had been applied
for production. For class 1 new drug TG-1000, the Company completed phase II clinical trials and will
carry out phase III clinical study soon. Cetrorelix Acetate for Injection ( 注射用醋酸西曲瑞克)
submitted a reply to the defect letter to the FDA. LZ001, Ilaprazole Enteric-coated Pellets (艾普拉唑微
丸肠溶片) and Asenapine Transdermal patch (阿塞那平透皮贴剂) had been approved for phase I
clinical trials. Elagolix Sodium Tablets (艾拉戈利钠片) had been submitted the clinical trial application.
③ Consistency evaluation：There were a total of 10 projects in development, of which 4 projects have
been approved, 3 projects had made application. Imipenem and Cilastatin Sodium for Injection (注射
用亚胺培南西司他丁钠), Cyclosporine Softgels (环孢素软胶囊) (50mg), Vancomycin Hydrochloride
for Injection (注射用盐酸万古霉素) and Bismuth Potassium Citrate Capsule (枸橼酸铋钾胶囊)had
been approved; and Bismuth Potassium Citrate Granules (枸橼酸铋钾颗粒) and Rabeprazole Sodium
Enteric-coated Tablets (雷贝拉唑钠肠溶片) have applied for registration.
2）Biologics
There were a total of 8 projects in development, of which 2 projects were approved for market launch,
1 project was approved for emergency use, 1 project had applied for conditional market launch, 3
projects were in the phase III clinical trials and 1 project was in the phase I clinical trial.
Therapeutic biological products: Tocilizumab Injection(Atvtia) (托珠单抗注射液(安维泰)) was
approved for market launch in China; Recombinant Human Choriogonadotropin alfa for Injection (注
射用重组人绒促性素) was approved for market launch in China in 2021, and was currently under
overseas registration; Lipustobart for Injection ( 注 射 用 利 普 苏 拜 单 抗 ) was in preparation for
application for conditional market launch; Phase III clinical trials of Semaglutide Injection (司美格鲁
肽注射液) has completed enrollment; Recombinant Anti-human IL-17A/F Humanized Monoclonal
Antibody Injection ( 重 组 抗 人 IL-17A/F 人 源 化 单 克 隆 抗 体 注 射 液 ) and Recombinant Human
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Follitropin AlfaSolution for Injection (重组人促卵泡激素注射液) had commenced the phase III
clinical trials.
Preventive biological products: Recombinant SARS-CoV-2 Fusion Protein Vaccine (Likang) (重组
新型冠状病毒融合蛋白疫苗（丽康）) was approved for emergency use for heterologous booster
vaccination in China in June 2022 and was included in the national immunization program in September
2022, and has been vaccinated in 27 provinces and cities across the country. Recombinant SARS-CoV-
2 Fusion Protein Bivalent (Prototype Strain /Omicron XBB variant) Vaccine (CHO Cell) (重组新型冠
状病毒融合蛋白二价（原型株/Omicron XBB变异株疫苗）（CHO 细胞）） obtained drug clinical
trial approval in July 2023.
3）APIs and intermediates
There were a total of 41 projects in development, of which 24 were new product R&D projects and 17
were tech-upgradation projects of existing products. For new product R&D projects, the API of
Biapenem (比阿培南) had been approved for launching, and the registration application for the API of
Meloxicam (美洛昔康) and the API of Caspofungin Acetate (醋酸卡泊芬净)were submitted. For
technological upgrading projects of existing products, the key project Cephalosporin C-High Producing
Mutant Strains ( 头 孢 菌 素 C 高 产 突 变 株 ) was progressing smoothly. After screening, the scale
production verification of the strains had been completed, and the average unit yield had been steadily
increased; in the development and selection project of new L-phenylalanine – High Producing Strains
(L- 苯 丙 氨 酸 新 型 高 产 菌 株 ) driven by IBT technology, strain modification and selection was
proceeding and shake-flask cultivation has achieved initial results. In addition, the Company also
completed the establishment of Escherichia coli genome missing-at-random platform based on the
mediation of transposons and CRISPR/Cas9, to screen and evolve L-phenylalanine with the minimum
genome to synthesize advantageous strain in combination with the continuous evolution platform.
4）Traditional Chinese medicine
There were a total of 9 projects in the development track for new TCM, of which, SXSHL gel, a new
improved TCM, had completed the preclinical experiment research, and its application materials were
under preparation and collation. TGDX granules, a class 1.1 new TCM, had completed the in-hospital
preparations single-centre clinical trial and its clinical trial summary report was finished.
5） Diagnostic reagents and equipment
There were a total of 73 projects in development in diagnostic reagents and equipment, 11 projects at
clinical stage (including evaluation), 8 projects in alteration or technical renovation, and 5 projects in
development in operation equipment. Livzon Diagnostics’ 8 diagnostic kits for anti-phospholipid
syndrome-related autoantibody were successively approved, further enriching the project list of the
immunochemiluminescence system. So far, a total of 21 supporting diagnostic kits for the single-person
chemiluminescence analyzer have been approved. Livzon Interferon-Gamma Release Assays (IGRA)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Test Kit (Chemiluminescence Immunoassay) (结核感染T细胞测定试剂盒（化学发光法）), which is
adapted to the high-speed chemiluminescence analyzer, was approved on 10 April, and Passive Particle
Agglutination Test for Detection of Antibodies to Treponema Pallidum (梅毒螺旋体抗体检测试剂盒
（凝集法）) and Diagnostic Kit for Measurement of Antibodies to Mycoplasma Pneumonia (Passive
Particle Agglutination) (肺炎支原体抗体检测试剂盒（被动凝集法）) were also approved.
(II) Description of material changes in profits arising from non-principal businesses
√Applicable □N/A
Unit: Yuan Currency: RMB
Proportion
Sustainable
Item Amount of total Cause
or not
profits (%)
Mainly due to changes in the profit and
Investment loss from investments in associates and
56,854,039.45 2.91 No
income receipt of dividends from other equity
instrument investments
Gains or losses
Mainly due to fluctuations in market
from changes in -39,314,888.38 -2.01 No
value of the securities investment held
fair value
Losses of credit Mainly due to expected credit losses on
-22,209,391.69 -1.14 No
impairment accounts receivable
Impairment of Mainly due to the impairment provision
-30,171,594.37 -1.55 No
assets for inventories
Non-operating Mainly due to the income from disposal
1,757,450.18 0.09 No
income of scrap items
Non-operating Mainly due to donation expenditure,
7,370,028.41 0.38 No
expenses etc.
Mainly due to the government grants
Other income 125,925,260.26 6.45 Yes
received
(III) Analysis of assets and liabilities
√Applicable □N/A
1. Analysis of assets and liabilities
Unit: Yuan
Change in
Ending Ending
the ending
Ending balance of Ending balance of
balance of
Item balance of the the period to balance of last last year to Explanations
the period to
period the total year the total
that of last
assets (%) assets (%)
year (%)
Mainly due to the current
announcement of profit
distribution plan by the
Other receivables 105,444,746.96 0.29 52,535,740.14 0.15 100.71 invested equity joint venture,
as the dividend payment has
not been received as of the
balance sheet date.
Financial Mainly due to the changes in
liabilities held 21,644,248.86 0.06 755,634.43 0.00 2,764.38 fair value of foreign currency
for trading forward contracts.
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Mainly due to some contract
performance obligations
during the current period,
Contract liabilities 92,547,832.12 0.26 292,977,730.74 0.82 -68.41 which satisfies the conditions
for revenue recognition and
results in the carrying
forward of revenue.
Mainly due to the repurchase
Treasury shares 717,135,581.08 1.98 347,176,561.29 0.97 106.56 of A shares of the Company
during the Period.
Other Mainly due to the translation
comprehensive 35,886,298.52 0.10 4,704,473.53 0.01 662.81 of the financial statements in
income foreign currency.
2. Overseas assets
√Applicable □N/A
(1) Asset size
Among them: Overseas assets were 45.59 (Unit: 100 million, Currency: RMB), representing 12.58% of
the total assets.
(2) Statement on high proportion of overseas assets
□Applicable √N/A
3. Restrictions on assets entitlements as at the end of the Reporting Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Carrying value at the end of
Item Cause for restriction
the period
Letters of credit, bank acceptances and forward
Other monetary funds 3,713,052.25
exchange settlement deposits, etc.
Notes pool business and pledge of notes
Notes receivable 530,641,682.69
receivable
Total 534,354,734.94
4. Others
□Applicable √N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
（IV）Analysis of investment
Overall analysis of equity investments
√Applicable □N/A
During the Reporting Period, the Company carried out strategic investments according to development plans and schedules as follows:
1. Major equity investments
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Whether
the target In the Item on the Impact Litigat
is Percentage Consolidation financial Source Investment Status as of Expected of gain ion Disclosure Disclosure
Name of Principal Investment Investment Partner (if
primarily of scope of the statement of period (if balance return (if or loss involv date (if index (if
investee business method amount applicable
engaged in shareholding Company or (if funds any) sheet date any) for the ed or any) any)
investment not applicable) period not
business
Engaged in
investment
activities with its
Wuhan Kangli own funds; asset
Health Capital
management
Investment contribution
services invested
Management Long-term of RMB Please see Please see
with its own New Own Livzon
Co., Ltd. (武汉 No 100,000 66.86% Yes equity Long term 100 - -0.0017 No Note 1 for Note 1 for
funds; corporate establishment funds Group
investment thousand details details
康丽健康投资 management;
was
管理有限公 entrepreneurship
completed
司) investment and
financing
advisory
services.
Lijian Engaged in Capital
(Guangdong) production of Long-term contribution Please see Please see
New Own Livzon
Animal veterinary No 20,000 71.83% Yes equity Long term of RMB 75 - -284.41 No Note 2 for Note 2 for
Healthcare establishment funds Group
medicine; investment million was details details
Co., Ltd. (丽健 operation of completed
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
（广东）动物 veterinary
保健有限公 medicine; import
司) and export of
goods and
technology and
sale of
disinfectors
(excluding
dangerous
chemicals) and
animal health
products;
technical
advisory
services on
animal breeding,
etc.
R&D,
production, sale,
import and
export of TCMs,
Macau Livzon proprietary
Traditional Chinese
Chinese medicine, food,
Medicine medical
Capital
Modernization machinery, Long-term
New Own contribution
Technology chemical and No 8.52 44.77% Yes equity N/A Long term - - No N/A N/A
establishment funds was not yet
Co., Ltd. (澳门 industrial items investment
completed
for daily use,
丽珠中药现代
cosmeceuticals,
化科技有限公 cosmetics and
司) health products,
formula food for
special medical
use and gifts,
etc.
Shanghai Technical
Zhongtuo Capital
development,
Pharmaceutical contribution
technology Long-term
Technology Own of RMB
transfer, No Acquisition 2,500 22.83% Yes equity N/A Long term - - No N/A N/A
Co., Ltd. (上海 funds 22.50
technical investment
million was
中拓医药科技 advisory and
completed
有限公司) technology
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
services in the
biomedical
technology
industry, R&D
and design of
medical devices,
R&D of
diagnostic
preparations,
laboratory
preparations, etc.
Import and
export of drugs;
wholesale of
drugs; retail of
drugs; sale of Zhuhai
healthcare food; Houpu
general items: Hefeng
technical Investment
services, Management
technical Partnership
development, (Limited
technical Partnership)
advisory, (珠海市厚
Chengdu Jinrui technical 朴合丰投资
Jiye Capital
communications, 管理合伙企
Biotechnology Other contribution
technology 业(有限合
Co., Ltd. (成都 Capital equity Own of RMB
transfer and No 2,000 1.61% No Long term - - No N/A N/A
金瑞基业生物
injection instrument funds 伙)), 20.00
technology
investments Shenzhen million was
科技有限公 promotion; sale
completed
Jinrui
司) of special
chemical Biological
products Investment
(excluding Co., Ltd. (深
dangerous 圳金瑞生物
chemicals); 投资有限公
information 司), Lai
advisory Xintian, Wei
services Nongnong,
(excluding etc.
licensed
information
advisory
services);
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
information
technical
advisory
services; social
and economic
advisory
services; import
and export of
technology;
technical R&D
for biological
and chemical
products;
domestic trade
agency; health
advisory
services
(excluding
diagnosis and
treatment
services);
corporate
management;
medical
research, test
and development
Total / / / 124,508.52 / / / / / / / - -284.4117 - - -
Note 1: For details, please refer to the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Establishment of the Joint Venture with Livzon Group, a Controlling Subsidiary (Lin 2022-142)
disclosed by the Company on 13 December 2022;
Note 2: For details, please refer to the Announcement on Investment in the Establishment of the Joint Venture with Joincare, the Controlling Shareholder and Connected Transaction disclosed by Livzon Group
(000513.SZ, 01513.HK) on 17 January 2023.
2. Major non-equity investment
□Applicable√N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
3. Financial assets measured at fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount of
Amount at the Gain or loss on Impairment Amount of disposal Amount at the
Change in fair value investment Other
Type of asset beginning of the change in fair value provision for / redemption during end of the
included in equity during the change
period for the period the period the period period
period
Shares 235,534,124.87 -13,003,336.17 2,137,552.45 - 6,183,753.83 - - 230,852,094.98
Funds 688,053,816.62 9,573.79 -23,706,468.49 - - 5,646,082.27 - 658,710,839.65
Derivatives 5,432,511.57 -5,432,511.57 - - - - - -
Others 373,954,090.97 - - - 20,000,000.00 31,257.75 1,986.75 393,924,819.97
Total 1,302,974,544.03 -18,426,273.95 -21,568,916.03 - 26,183,753.83 5,677,340.02 1,986.75 1,283,487,754.61
Information on investment in securities
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount
Carrying Gain or loss on Amount of of Carrying
Initial Change in fair Profit or
Type of Securities Securities Source amount at the change in fair investment disposal amount at the Accounting
investment value included loss for
securities code abbreviation of fund beginning of value for the during the during end of the item
cost in equity the period
the period period period the period
period
Financial
Own
Shares 00135 Kunlun Energy 4,243,647.64 4,975,513.90 703,882.90 - - - 260,579.14 5,679,396.80 assets held for
funds
trading
Financial
Huadong Own
Shares 000963 39,851.86 15,425,841.60 -1,130,569.16 - - - 95,587.48 14,295,272.44 assets held for
Medicine funds
trading
Shares BEAM Beam 31,117,151.47 Own 82,218,236.97 -12,576,649.91 - - - - 69,641,587.06 Financial
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
(US) Therapeutics, Inc. funds assets held for
trading
Other equity
Elicio Own
Shares ELTX(US) 35,363,302.05 34,823,014.36 - -25,735,299.31 - - - 9,087,715.05 instruments
Therapeutics, Inc. funds
investment
Other equity
Carisma Own
Shares CARM(US) 38,807,266.00 34,821,295.50 - 4,515,821.53 6,183,753.83 - - 45,520,870.86 instruments
Therapeutics, Inc. funds
investment
LLAI Other equity
Own
Shares LungLife Ai, Inc. 58,837,745.24 9,615,483.94 - -6,473,409.41 - - 3,142,074.53 instruments
（LME） funds
investment
Beijing Luzhu Other equity
Own
Shares 02480 Biotechnology 30,000,000.00 53,654,738.60 - 29,830,439.64 - - - 83,485,178.24 instruments
funds
Co., Ltd. investment
Financial
Own
Funds 206001 Penghua Fund 150,000.00 934,289.94 9,573.79 - - - - 943,863.73 assets held for
funds
trading
Financial
Own
Others 27,978.31 29,271.00 - - - 31,257.75 1,986.75 - assets held for
funds
trading
Total / 198,586,942.57 / 236,497,685.81 -12,993,762.38 2,137,552.45 6,183,753.83 31,257.75 358,153.37 231,795,958.71 /
Statement of investments in securities
□Applicable √N/A
Information on investment in private equity fund
√Applicable □N/A
The Company had no new private equity fund investments during the reporting period. As at the end of the reporting period, the book balance of private equity funds
invested by the Company amounted to approximately RMB393 million.
Information on investment in derivatives
√Applicable □N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Unit: Yuan Currency: RMB
Percentage of
Name of Is this a Initial
Investment Amount of Investment investment amount
the related Type of investment Amount of Impairment Actual gain
Related Commence Maturity amount at the investment amount at to the net assets of
operator of party derivatives amount of disposal during provision (if or loss for the
relationship ment date date beginning of the during the the end of the Company at the
derivatives transac investment derivatives the period any) period
period period the period end of the period
investment tion investment
(%)
Forward foreign
Financial Non-related
No exchange 587.60 2022/7/5 2023/1/30 607.17 0.00 588.55 0.00 0.00 0.00 -7.15
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 2,138.20 2022/8/2 2023/2/3 2,183.36 0.00 2,145.79 0.00 0.00 0.00 -21.21
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 5,403.44 2022/9/5 2023/2/24 5,376.80 0.00 5,278.45 0.00 0.00 0.00 200.05
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 10,670.51 2022/10/8 2023/4/4 10,392.16 0.00 10,232.19 0.00 0.00 0.00 527.26
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 11,661.47 2022/11/1 2023/4/20 11,361.13 0.00 11,332.91 0.00 0.00 0.00 328.36
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 8,952.88 2022/12/2 2023/6/26 8,939.17 0.00 8,894.39 0.00 0.00 0.00 -17.37
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 17,187.80 2023/1/4 2023/7/10 0.00 17,187.81 17,257.98 0.00 277.47 0.01 -544.67
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 31,642.59 2023/2/1 2023/7/20 0.00 31,642.59 24,818.61 0.00 7,745.86 0.36 -675.13
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 6,316.38 2023/3/1 2023/7/17 0.00 6,316.38 2,953.20 0.00 3,606.58 0.17 -110.93
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 19,128.56 2023/4/3 2023/10/16 0.00 19,128.57 7,756.10 0.00 12,058.96 0.55 -243.45
institution party
contract (sell)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Forward foreign
Financial Non-related
No exchange 16,311.15 2023/5/5 2023/10/16 0.00 16,311.15 3,862.70 0.00 12,858.51 0.59 -112.92
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 14,720.11 2023/6/2 2023/12/1 0.00 14,720.11 0.00 0.00 14,881.71 0.68 0.00
institution party
contract (sell)
Forward foreign
Financial Non-related
No exchange 1,358.88 2022/9/22 2023/3/21 1,355.92 0.00 1,338.73 0.00 0.00 0.00 -20.33
institution party
contract (buy)
Forward foreign
Financial Non-related
No exchange 448.42 2022/11/14 2023/2/15 461.69 0.00 452.26 0.00 0.00 0.00 -0.40
institution party
contract (buy)
Forward foreign
Financial Non-related
No exchange 5,412.27 2022/12/2 2023/6/26 5,436.52 0.00 5,411.65 0.00 0.00 0.00 117.96
institution party
contract (buy)
Forward foreign
Financial Non-related
No exchange 1,667.70 2023/1/6 2023/7/28 0.00 1,667.70 1,227.53 0.00 430.66 0.02 -23.94
institution party
contract (buy)
Total 153,607.97 - - 46,113.94 106,974.30 103,551.04 0.00 51,859.75 2.38 -603.85
Source of funds for derivatives investment Own funds
Litigation involved (if applicable) Not applicable
Disclosure date of the announcement in relation to the
approval of investment in derivatives by the Board (if 7 April 2023
any)
Disclosure date of the announcement in relation to the
approval of derivatives investment by the general Not applicable
meeting of shareholders (if any)
To effectively manage the uncertainty of exchange rate fluctuations on assets denominated in foreign currency of the Company, foreign exchange forward contracts
and other financial derivatives are employed to lock relevant exchange rates for the purpose of hedging. The Company has formulated the Management System for
Financial Derivatives Trading (《金融衍生品交易业务管理制度》) in relation to the operation and control of foreign exchange derivatives: 1. Market risk: the
Risk analysis of derivatives position held during the uncertainty of exchange rate fluctuations in the foreign exchange market has led to higher market risk in foreign exchange forward business. Control measures: The
Reporting Period and explanation of control measures Company’s foreign exchange forward business is entered into for hedging exchange rate risk associated with assets denominated in US dollar and lock the future
(including but not limited to market risk, liquidity risk, exchange settlement price of such assets. It is designed to be used as a hedging instrument. Such foreign exchange derivatives shall not be used for speculative
credit risk, operational risk, legal risk, etc.) trading. The principle of prudence and conservation shall be observed so as to effectively prevent market risk. 2. Operational risk: operational risk arises from
imperfect internal process, improper operation, system failure and other factors. Control measures: The Company has formulated the corresponding management
measures, clearly defined the responsibilities of all parties, improved the review and approval process and established supervisory mechanism, so as to effectively
reduce operational risk. 3. Legal risk: The Company’s foreign exchange forward business is subject to applicable laws and regulations, and shall clearly stipulate the
relationship of rights and obligations with financial institutions. Control measures: In addition to strengthening the knowledge of laws and regulations and market
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rules in the Company’s responsible department, the Company’s legal department shall also strictly review various business contracts, agreements and other
documents, specify the rights and obligations, and strengthen compliance inspection, so as to ensure that the Company’s investment and operation in derivatives
have met the requirements of applicable laws and regulations as well as the Company’s internal systems.
In order to manage the uncertainty risk caused by price fluctuations of bulk commodities on the purchase cost of raw materials of the Company, financial derivatives
such as commodity futures contracts are employed to hedge raw materials. The Company has formulated the Internal Control System for Commodity Futures
Hedging Business (《商品期货套期保值业务内部控制制度》) to standardize the management and risk control of commodity futures derivatives: 1. Market risk:
the uncertainty of price changes of bulk commodities has led to greater market risk in futures business. Control measures: The Company’s futures hedging business
shall not carry out speculative trading, the operation principle of prudence and conservation shall be observed, the number of hedging transactions shall be strictly
limited, such that it does not exceed the actual number of spot transactions, and the futures position shall not exceed the spot volume for hedging purpose. 2.
Operational risk: operational risk arises from imperfect internal process, improper operation, system failure and other factors. Control measures: The Company has
formulated the corresponding management system, clearly defined the division of responsibilities and approval process, and established an improved supervisory
mechanism, so as to effectively reduce operational risk through risk control of business process, decision-making process and transaction process. 3. Legal risk: The
Company’s commodity futures hedging business is subject to applicable laws and regulations, and shall clearly stipulate the relationship of rights and obligations
with financial institutions. Control measures: In addition to strengthening the knowledge of laws and regulations and market rules in the Company’s responsible
department, the Company’s legal department shall also strictly review various business contracts, agreements and other documents, specify the rights and obligations,
and strengthen compliance inspection, so as to ensure that the Company’s investment and operation in derivatives have met the requirements of applicable laws and
regulations as well as the Company’s internal systems.
Change in market price or fair value of the derivatives
invested during the Reporting Period, the specific
Gains and losses arising from change in fair value of the forward foreign exchange contracts, option contracts and commodity futures contracts during the Reporting
method, related assumptions and parameters used in
Period were RMB-26.3211 million.
the analysis of the fair value of derivatives shall be
disclosed
Explanation as to whether there has been a material
change in the accounting policy and accounting
principles for the Company’s derivatives during the No
Reporting Period as compared with the previous
reporting period
Due to the growing import and export business of the Company, a large amount of foreign exchange transactions is required. To avoid and prevent foreign exchange
risk, we are of the view that the forward foreign exchange derivatives trading business carried out by the Company and its subsidiaries are in line with the actual
Specific opinion of independent Directors on
development needs of the Company. When the Board reviewed this proposal, the relevant decision-making procedures were in compliance with the Company Law,
investment in derivatives and risk control of the
the Securities Law, the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange and other relevant laws and regulations and the provisions in the
Company
Articles of Association of the Company. In view of above, we concurred that the Company conducted foreign exchange derivatives trading business with its own
funds within the limit approved by the Board.
(V)Sale of major assets and equity
□Applicable √N/A
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(VI) Analysis of major controlled and invested companies
√Applicable □N/A
Unit: 10,000 Yuan
Nature of Registered Operating
Company Main product and service Asset size Net assets Revenues Net profit
business capital profit
R&D, production and sales of oral liquids, tablets
(hormones), aerosols (hormones containing),
Taitai
Industry inhalation preparations (solution for inhalation) 10,000 49,560.63 39,868.22 12,650.94 3,420.14 3,238.50
Pharmaceutical
(hormones containing), nasal spray (hormones
containing), and TCM extraction workshop
Powder injection (including penicillin), tablets,
hard capsules, APIs, and sterile APIs. Import and
export businesses and domestic trade (excluding
Haibin Pharma Industry 70,000 221,744.67 163,578.67 54,121.86 8,124.02 5,775.83
commodities under exclusive rights, commodities
under special government control, and monopolized
commodities)
Manufacturing and sale of pharmaceutical products,
Xinxiang Haibin Industry 17,000 95,579.48 40,584.76 38,443.15 2,677.80 2,576.82
intermediates and other chemical products
Production and sale of self-produced Eagle's food,
Health China Industry health care food, traditional Chinese medicine HKD7,317 14,276.24 9,542.04 1,644.73 341.78 189.40
decoction pieces, and drug products
R&D of new pharmaceutical products, health care
products, medical devices, diagnostic reagents,
Shanghai Frontier Industry pharmaceutical intermediates, and provision of 5,000 17,342.56 12,114.47 4,075.53 622.69 654.43
relevant technical consulting, technical service and
technical transfer
R&D, production and sale of pharmaceutic
preparations, chemical APIs, biological APIs,
Jiaozuo Joincare Industry 50,000 143,617.21 98,440.93 71,884.81 11,644.99 10,353.55
pharmaceutical intermediates, and biological
products
Topsino Commerce Investment and trade HKD89,693 215,256.66 158,256.22 - 26,948.00 26,836.34
R&D, production, storage, transport and sale of
chemical APIs (including intermediates) and
Joincare Haibin Industry 50,000 107,090.87 95,238.77 29,581.31 15,193.20 13,105.10
pharmaceutic preparations. Import and export
businesses and domestic trade (excluding
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commodities under exclusive rights, commodities
under special government control, and monopolized
commodities)
Livzon Group Industry Drug R&D, production, manufacturing and sale 93,555 2,572,612.72 1,424,982.52 668,991.81 142,843.20 117,407.08
Notes: 1. The companies listed above are companies where the Company directly or indirectly held 100% equity interest, except for Livzon Group and Shanghai Frontier; financial data thereof
are data of individual accounting statements and that attributed to parent companies; as there are transactions between subsidiaries or between a subsidiary and the Company, data of individual
financial statements are not separately analyzed.
2. For business conditions of Livzon Group, please refer to the 2023 Interim Report of Livzon Pharmaceutical Group Inc.
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(VII) Structured entities controlled by the Company
□ Applicable √N/A
V. Other matters for disclosure
(I) Potential risks
√Applicable □N/A
1. Risks of changes in industrial policies
The pharmaceutical manufacturing industry is significantly affected by changes in industrial policies.
The pharmaceutical industry will face great challenge in development in the future with continuous
deepening of medical reform, advancement of supply-side structural reform in the industry, revision of
Drug Administration Law, acceleration of consistency evaluation of generic drugs, adjustment of the
new edition of National Reimbursement Drug List, expansion of volume-based procurement, centralized
rectification of the pharmaceutical industry and other industrial policies that have been successively
launched. In July 2022, the Company’s key product Meropenem for Injection (注射用美罗培南) was
selected in the seventh batch of volume-based drug procurement organized by the State. This is expected
to be implemented in November 2022 and will have a great impact on the sales price and market share
of this product. Levosalbutamol Hydrochloride Nebulizer Solution (盐酸左沙丁胺醇雾化吸入溶液),
a key product of the Company, met the standards on being included in the national volume-based
procurement. It is expected to have impact on the sales of such product should being included in the list
of volume-based procurement.
Response measures: The Company will pay close attention to industry dynamics and reforms, cope
with major changes in policies of the pharmaceutical industry through early planning, transformation
and compliance, and further establish and improve its compliant operation mechanism and system. It
will actively strengthen new product R&D and innovation and constantly improve its core competitive
strengths. Meanwhile, the Company actively engages in the access to the national reimbursement drug
list and negotiation, and continue to increase the coverage of hospitals and sales, to realize the objective
of “price for quantity”, so as to reduce the impact of price adjustment on the Company’s steady growth.
Moreover, the volume-based drug procurement is becoming a regular practice. In the face of the seventh
batch of volume-based drug procurement and the possible impact on the business performance of the
Company, the Company will continue to enhance its innovative efforts, boost its competitive edge, and
strive to ensure the stable operation of the business. With the Company’s new high-barrier complex
formulations, represented by inhalation formulations, being launched on the market, commercialization
will gradually enter a stable contribution period. The Company’s product structure will be further
optimized, and the reliance on specific products will also gradually reduce.
The Company will continue to innovate and develop clinically needed innovative drugs with substantial
added value, as well as high-barrier complex formulations. It will delve into products with market
potential and technological barriers, actively advance post-market evaluations for key products, and
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conduct consistency evaluations for related products. The Company will continuously optimize its
product portfolio while actively exploring and expanding into international markets.
2. Market risk
With advancement of supply-side structural reform in the pharmaceutical manufacturing industry and
two-invoice policy in circulation domain, pharmaceutical market structure is deeply changed. With the
gradual standardization and centralization of the market, competition in the pharmaceutical industry
becomes increasingly fierce. Affected by increasingly stricter drug regulation, policy-based drug price
reduction, price cutting during bidding, medical insurance premium control, and minimum procurement
commitment of the pharmaceutical industry in current stage, bid winning price of drugs will be further
lowered, competition among enterprises in the industry will be intensified, and price war will occur
frequently, thus the Company will be at the risk of drug price reduction.
Response measures: The Company will establish a more rational market-oriented system through strict
compliance operation so as to maintain its dominant position and core competitive strengths; and the
Company will ensure the sustainable and steady development and improve its profitability by
reinforcing marketing efforts. Meanwhile, the Company will offset the impact of product price reduction
by means of increasing sales volumes, and optimize technical process and reduce production costs
through internal exploration and transformation. Moreover, the Company will speed up the R&D，
expedite the process of bringing products to market and spread risks of the Company while expanding
the range of existing products in segment markets In the future, the augmentation of product variety
will drive sales growth and foster new sources of profits.
3. Risk of safety and environmental protection
The Company is an integrated pharmaceutical manufacturing enterprise. During production, it
implements relevant chemical synthesis process and uses a large number of acid and alkali and other
chemical components, which are inflammable, explosive, toxic, irritant and corrosive, and have hidden
hazards of fire, explosion and poisoning, posing certain risks to the production and operation of the
Company. As environmental protection policies and regulations have been constantly issued in recent
years, environmental protection standards have become more stringent, and the state has strengthened
its control over pollutants, and thus risks of environmental protection of the Company are increasing.
Response measures: The Company has always obeyed the safety work concept of “Putting People First”
and the guideline of “Safety First, Precaution Crucial and Comprehensive Management”. It will
strengthen the construction of safe production infrastructure and ensure a sound environment for safe
production of the Company through regular internal audit of safety and environment systems and
employee safety education and training. The Company will carry out discharge after treatment and
reaching standards in accordance with environmental protection provisions, actively accept supervision
and inspection of environmental protection authorities, and try to reduce emission and increase
expenditures in environmental protection by improving production process and promptly updating
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environmental protection technology.
4. Risk in price and supply of raw materials
There is a larger fluctuation in the supply price of some raw materials of the Company due to changes
in material prices, especially the materials of traditional Chinese medicine, causing greater volatility or
rise in production costs of the Company. Meanwhile, the quantity and category of raw material suppliers
of the Company are various, thus quality of final products of the Company will be directly affected by
the selection of raw material suppliers and the guarantee and control of quality of raw materials.
Response measures: In terms of selection of suppliers, the Company will conduct an open tendering
and bidding based on the principle of selecting qualified suppliers, strengthen audit of suppliers, and
eliminate the adulteration of adverse suppliers. The Quality Assurance Department and Supply
Department of the Company will directly conduct process control of products provided by suppliers of
key raw materials and carry out quality inspection and control of final products.
5. Quality control risk
The quality of pharmaceutical products is directly related to people’s lives and health. The requirements
of drug regulatory authorities on the production quality are increasingly strict and pharmaceutical
manufacturers bear significant responsibility. As pharmaceutical manufacturing involves numerous
aspects such as the supply of raw materials, production technique, process control, equipment conditions,
production environment, transportation conditions, storage conditions and inspection, the quality control
for drugs covers the full lifecycle of products.
Response measures: The Company rigorously oversees the quality of products, gradually improve and
strengthen the long-term mechanisms on product quality management and the comprehensive quality
management systems. On such basis, the Company will coordinate the work of various relevant
departments such as the R&D department, the production and quality management department, establish
information-based systems and improve all SOP processes. It will strengthen process control and risk
management on new products, improve the quality of operation and fully guarantee the quality of drugs
through refining the quality management system. Meanwhile, it will continue to promote outstanding
performance management models, introduce advanced international concepts and methods, strengthen
the application of quality management instruments, and continuously propel and improve the
international level of the quality management system.
6. Risk of R&D for new drugs
New drug R&D is characterized by high input, high risk and long period. The State has frequently issued
drug R&D related policies in recent years to further enhance approval work requirements of new drugs
for marketing, thus bringing certain risks for new drug R&D of the Company. Meanwhile, post-launch
promotion of drugs is influenced by national regulations, industry policies, market environment and
competitive intensity, potentially leading to lower-than-expected post-launch revenues. This exposes the
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company to risks associated with product R&D.
Response measures: The Company will further improve the R&D and innovation systems, introduce
and develop high-end talents, proactively carry out cooperation and introduction of overseas innovative
medicines, strengthen market research and evaluation of varieties, reinforce the process regulation and
risk management of the initiation of R&D projects, and concentrate efforts and make key breakthroughs
in the R&D of core products. At the same time, the Group’s advantages in APIs will be fully utilized to
reinforce the integration of API and drug formulations to ensure the long-term sustainable development
of the Company.
(II) Other matters for disclosure
□Applicable √N/A
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Chapter 4 Corporate Governance
I Introduction of general meetings
Meeting Query index of
Date of meeting Disclosure date Meeting resolution
sessions designated website
The Resolution on the Proposal on Cancellation
2023 First of Treasury Shares Previously Repurchased was
Extraordinary considered and approved. See the Announcement
19 May 2023 www.sse.com.cn 20 May 2023
General on Resolutions of Joincare Pharmaceutical Group
Meeting Industry Co., Ltd. at the 2023 First Extraordinary
General Meeting (Lin 2023-056) for details
Nine (9) resolutions were considered and
approved, including the 2022 Annual Work
Report of the Supervisory Committee, 2022
Annual Work Report of the Board of Directors,
2022 Annual 2022 Annual Profit Distribution Scheme, and
General 9 June 2023 www.sse.com.cn 10 June 2023 2021 Annual Report of Joincare Pharmaceutical
Meeting Group Industry Co., Ltd. (Full Text and Abstract).
See the Announcement on Resolutions of
Joincare Pharmaceutical Group Industry Co., Ltd.
at the 2022 Annual General Meeting (Lin 2023-
061) for details
Holders of preferred shares with resumed voting rights requesting to hold extraordinary general
meeting
□Applicable √ N/A
Description of General Meetings
□Applicable √ N/A
II Changes in directors, supervisors and senior management of the Company
□Applicable √ N/A
Description of changes in directors, supervisors and senior management of the Company
□Applicable √ N/A
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III Profit distribution plan and plan for conversion of capital reserve into share capital
Profit distribution plan and plan for conversion of capital reserve into share capital proposed
for the first six months of 2023
Distribution or conversion or not No
Number of bonus shares to be distributed for every ten shares (share) N/A
Dividend amount to be distributed for every ten shares (RMB) (tax inclusive) N/A
Number of shares to be converted into share capital for every ten shares (share) N/A
Description of profit distribution plan and plan for conversion of capital reserve into share capital
N/A
IV Equity incentive scheme, employee share ownership scheme or other employee incentives of
the Company and their effect
(I) Matters related to equity incentive scheme have been disclosed in the Provisional
Announcements with no progress or change in subsequent implementation
□Applicable √ N/A
(II) Incentives not disclosed in the Provisional Announcements or with subsequent progress
Equity incentives
□Applicable √N/A
Others
□Applicable √N/A
Employee share ownership scheme
□Applicable √N/A
Other incentive program
□Applicable √N/A
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Chapter 5 Environmental and Corporate Social Responsibility
I Environmental information
(I) Environmental issues of companies and their major subsidiaries belonging to key pollutant discharging units as announced by the environmental
protection department
√Applicable □N/A
1. Pollution discharge information
√Applicable □N/A
i.Jiaozuo Joincare
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t/a) approved (t/a)
Chemical oxygen
Jiaozuo Continuous Master outlet for 119.7 220 379.24 942.1 Nil
demand 1
Joincare sewage
Ammonia nitrogen Continuous 17.8 35 56.4 105.3 Nil
ii. Taitai Pharmaceutical
Name of major Number of Distribution of Discharge Pollutant discharge Total amount Total amount of
Name of company Mode of Excessive
pollutants and discharge discharge concentration standards of discharge discharge
or subsidiary discharge discharge
specific pollutants outlets outlets (mg/L) implemented (mg/L) (t/a) approved (t/a)
Chemical oxygen
40.12 345 0.143 19.34 Nil
demand
Taitai Biochemical oxygen Master outlet
Intermittent 1 8.15 150 0.014 / Nil
Pharmaceutical demand for sewage
Ammonia nitrogen 0.124 35 0.0062 / Nil
Total Nitrogen 3.32 47 0.01 / Nil
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Total Phosphorus 1.31 5.2 0.006 / Nil
Suspended Substance 4 250 0.014 / Nil
Sulfur dioxide Discharge outlet 0.82 50 0.0055 / Nil
Nitrogen oxide Intermittent 1 of boiler exhaust 9.80 150 0.067 / Nil
Particulate matter gas 13.4 20 0.088 / Nil
iii. Haibin Pharma
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t/a) approved (t/a)
Chemical oxygen
67 500 2.24 41.65 Nil
demand Master outlet for
1
Ammonia nitrogen sewage 0.55 45 0.018 3.7485 Nil
Total Nitrogen 3.82 70 0.128 5.831 Nil
Haibin
Total volatile Intermittent Discharge outlet of
Pharma 1 2.6 100 0.0068 0.504 Nil
organic compounds boiler exhaust gas
Discharge outlet of
Non-methane
1 exhaust gas in 6 60 0.159 5.04 Nil
hydrocarbon
sewage station
iv. Xinxiang Haibin
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t/a) approved (t/a)
Chemical oxygen
Xinxiang Continuous Master outlet for 108.795 220 8.787 14.81 Nil
demand 1
Haibin sewage
Ammonia nitrogen Continuous 5.374 35 0.431 1.66 Nil
v. Fuzhou Fuxing
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Pollutant
Name of major
Name of Number of Discharge discharge Total Total amount
pollutants and Mode of Excessive
company or discharge Distribution of discharge outlets concentration standards amount of of discharge
specific discharge discharge
subsidiary outlets (mg/L) implemented discharge (t) approved (t/a)
pollutants
(mg/L)
Chemical
oxygen demand 16.00 100 10.78 102.19 Nil
(COD) Intermittent 1 The northwest side of the factory
Ammonia
0.06 15 0.04 10.22 Nil
nitrogen
Fuzhou SO2 1 RTO 11.3 200mg/m3 0.636 2.6 Nil
Fuxing NOx 1 RTO 8.33 200mg/m3 0.527 2.6 Nil
RTO, fermentation workshop,
Organized environmental friendly sewage
VOCs 7 station, regulating pool, 3.72 60mg/m3 2.158 30.19 Nil
Workshop 2 (East), Workshop 2
(West), QC department
Note: The discharge concentration represents the actual discharge concentration, and the standards implemented represent the standards for discharge to the environment by Jiangyin Sewage Treatment Plant (江阴污水
处理厂) (i.e. COD ≤ 100 mg/L, ammonia nitrogen ≤ 15 mg/L), and the agreed standard for discharge from Fuzhou Fuxing to Jiangyin Sewage Treatment Plant shall be the standards for discharge to the environment by
Jiangyin Sewage Treatment Plant (江阴污水处理厂) (i.e. COD ≤ 500mg/L, ammonia nitrogen ≤ 60mg/L, total phosphorus ≤ 8mg/L, total nitrogen ≤ 70mg/L, SS ≤ 400mg/L) . For the discharge of non-methane total
hydrocarbons, particulate matter, sulfur dioxide, and nitrogen oxides, the adopted standard was the standard limits stipulated in the Air Pollutant Discharge Standards for Pharmaceutical Industry (《制药工业大气污染
物排放标准》) (GB 37823-2019).
vi. Livzon Xinbeijiang
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t) approved (t/a)
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Chemical oxygen Sewage
Livzon 66.3 240 34.85 213.6 Nil
demand Intermittent 1 treatment
Xinbeijiang
Ammonia nitrogen workshop 7.7 70 4.06 24.5 Nil
Note: The discharge concentration represents the concentration of discharge into Qingyuan Henghe Sewage Treatment Plant (清远横荷污水处理厂), while the standard adopted for discharge represents the standard
stipulated in the pollutant discharge license of the company, i.e. COD ≤ 240 mg/L, ammonia nitrogen ≤ 70 mg/L. The data was obtained from Qingyuan Environmental Protection Bureau. The boiler emission follows
the Emission Standard of Air Pollutants for Boiler 《锅炉大气污染物排放标准》(DB 44/765-2019); the waste gas emission from the workshops follows the Air Pollutant Discharge Standards for Pharmaceutical
Industry (《制药工业大气污染物排放标准》) (GB 37823-2019) and the Emission Standards for Odor Pollutants (《恶臭污染物排放标准》(GB 14554-93).
vii. Livzon Hecheng
Pollutant discharge
Name of Name of major Number of Distribution of Discharge Total amount Total amount
Mode of standards Excessive
company or pollutants and discharge discharge concentration of discharge of discharge
discharge implemented (mg/L)/ discharge
subsidiary specific pollutants outlets outlets (mg/L)/（mg/m3） (t) approved (t/a)
（mg/m3）
Chemical oxygen
Wastewater 78 192 8.049 26.68 Nil
demand
Intermittent 1 treatment
Ammonia nitrogen
station 4.4 40 0.463 5.48 Nil
(NH3-N)
Sulphur dioxide 3 Boiler room 4 50 0.059 / Nil
Nitrogen oxides 3 Boiler room 61.1 150 0.48 / Nil
Livzon Smoke and dust 3 Boiler room 1.56 20 0.018 / Nil
Hecheng Hydrogen chloride 7 Workshop 7.38 100 2.06 / Nil
Organized
Non-methane
continuous 7 Workshop 19.96 60 6.03 Nil
hydrocarbons
emission 77.76
Non-methane
1 RTO 10.6 60 1.07 Nil
hydrocarbons
Nitrogen oxides 1 RTO 7.88 200 0.81 / Nil
Sulphur dioxide 1 RTO 2.5 200 0.265 / Nil
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Notes: 1. The discharge concentration of pollutants in wastewater represents the average concentration by online monitoring from the master discharge outlet by the company into South District Sewage Treatment Plant,
while the standard adopted for discharge represents the standard stipulated in the pollutant discharge license of the company, i.e. COD ≤ 192 mg/L, ammonia nitrogen ≤ 40 mg/L.
2. The discharge concentration of pollutants in the discharge outlets of waste gas represents the average concentration detected by a qualified third party engaged, of which the boiler exhaust adopted the Emission
Standards for Boiler Air Pollutants in Guangdong Province (《广东省锅炉大气污染物排放标准》) (DB 44/765-2019), the waste gas of the workshop and wastewater treatment station complied with the Air Pollutant
Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB 37823-2019).
viii. Gutian Fuxing
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t) approved (t/a)
Chemical oxygen Southeastern part
49.382 120 5.216 113.9 Nil
Gutian Fuxing demand Continuous 1 of the factory
Ammonia nitrogen zone 9.595 35 1.139 39.88 Nil
Note: Wastewater discharge follows the Discharge Standards of Water Pharmaceutical Industry Fermentation Products Category (《发酵类制药工业水污染物排放标准》)(GB21903-2008). The discharge concentration
represents the concentration of ultimate discharge into the environment, while the discharge standards stipulated in the pollutant discharge license are COD ≤ 120 mg/L, ammonia nitrogen ≤ 35 mg/L.
ix. Livzon Limin
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t) approved (t/a)
Chemical oxygen
Wastewater 13.00 110 2.364 Nil Nil
Livzon Limin demand Intermittent 1
treatment station
Ammonia nitrogen 0.28 15 0.051 Nil Nil
Note: The production process of Livzon Limin is required to comply with the Water Pollution Prevention and Control Law of the PRC ( 《中华人民共和国水污染防治法》), the Air Pollution Prevention and Control
Law of the PRC ( 《中华人民共和国大气污染防治法》), the Solid Waste Pollution Prevention and Control Law of the PRC ( 《中华人民共和国固体废物污染环境防治法》 ), “Integrated Wastewater Discharge
Standard of the PRC National Standard (GB 8978-1996)” (《中华人民共和国国家标准污水综合排放标准（GB 8978-1996）》), the “Emission Standard of Air Pollutants for Boiler (GB13271-2014)” ( 《锅炉大气
污染物排放标准（GB 13271-2014）》), the Measures for Pollutant Discharge Permitting Administration (For Trial Implementation) ( 《排污许可管理办法（试行）》 ) and other laws, regulations and industry
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standards. The wastewater of Limin Factory was discharged into Shaoguan Second Sewage Treatment Plant (韶关市第二污水处理厂) and the standard adopted for pollutant discharge represented the standard stipulated
in the pollutant discharge license of the company, i.e. COD ≤ 110 mg/L, ammonia nitrogen ≤ 15 mg/L, while the data detected by third party inspection firm was adopted as the discharge concentration.
x. Livzon Pharmaceutical Factory
Name of major Number of Distribution of Discharge Pollutant discharge Total amount Total amount of
Name of company Mode of Excessive
pollutants and discharge discharge concentration standards of discharge discharge
or subsidiary discharge discharge
specific pollutants outlets outlets (mg/L) implemented (mg/L) (t) approved (t/a)
Wastewater
Chemical oxygen
1 treatment 21.09 120 1.17 Nil Nil
Livzon demand
station
Pharmaceutical Intermittent
Wastewater
Factory Ammonia
1 treatment 0.2 20 0.012 Nil Nil
nitrogen
station
Note: The discharge concentration of pollutants in the wastewater discharge outlet represents the average concentration detected by a qualified third party engaged, by implementing the strictest of water pollutant
discharge concentration limits for newly-built enterprises of the “Discharge Standard of Water Pollutants for Pharmaceutical Industry Mixing/Compounding and Formulation Category” ( 《混装制剂类制药工业水污
染物排放标准》 (GB 21908-2008)), water pollutant discharge concentration limits for newly-built enterprises of the “Discharge Standards of Water Pollutants for Pharmaceutical Industry Bio-pharmaceutical Category”
(《生物工程类制药工业水污染物排放标准》 ) (GB 21907-2008), or the level 1 of phase II standard of “Discharge Limits of Water Pollutants” ( 《水污染物排放限值》) (DB 44/26-2001) of Guangdong Province.
xi. Ningxia Pharmaceutical
Pollutant discharge
Name of major Discharge
Name of Number of standards Total Total amount
pollutants and Mode of Distribution of concentration Excessive
company or discharge implemented amount of of discharge
specific discharge discharge outlets （mg/L）/ discharge
subsidiary outlets （mg/L）/ discharge (t) approved (t/a)
pollutants （mg/m3）
（mg/m3）
Chemical
Sewage treatment 116 200 58.4 Nil Nil
Ningxia oxygen demand
Continuous 1 workshop on north
Pharmaceutical Ammonia
side of factory zone 0.25 25 0.12 Nil Nil
nitrogen
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Sulfur dioxide 78 200 20.19 156.816 Nil
Boiler workshop on
Nitrogen oxide 121 200 31.17 156.816 Nil
1 north side of factory
Particulate
zone 7 30 1.57 23.522 Nil
matter
4 outlets for
Volatile organic fermentation, 3 outlets
9 7.03 100 4.04 79.535 Nil
compounds for refinery and 2
outlets for sewage
Notes: 1. The discharge concentration of wastewater represents the concentration of ultimate discharge to the environmental protection control center of Ningxia Xin’an Technology Co., Ltd. (宁夏新安科技有限公司)
(“Xin’an Company”) (COD ≤200mg/m, ammonia nitrogen ≤25mg/m), the standard adopted for discharge was the standard stipulated in the pollutant discharge license of the company (protocol standard) and the amount
of discharge was calculated by the amount received by Xin’an Company. In respect of the total amount of approved discharge, since Ningxia Pharma adopted indirect discharge, the local government of Ningxia cancelled
the limitation of total discharge of chemical oxygen demand and ammonia nitrogen of all indirect discharge enterprises, and the total amount index was directly allocated to sewage treatment plants in the pharmaceutical
industrial park established by the government after the renewal of the pollution discharge license.
2. The air emission concentration of boilers represents the self-monitoring average concentration throughout the year, the standard adopted for discharge was the emission limits of coal-fired boilers in Schedule 3 of
Emission Standards for Boiler Air Pollutants (《锅炉大气污染物排放标准》表 3) (GB13271-2014) (sulfur dioxide ≤ 200mg/m, nitrogen oxides ≤ 200mg/m, particulate matter ≤ 30mg/m) and the amount of discharge
was calculated by the amount indicated by online monitoring. The concentration of volatile organic compounds represents the concentration of ultimate discharge to the environment (self-monitoring concentration), the
adopted standard was the standard limits stipulated in Schedule I of the Air Pollutant Discharge Standards for Pharmaceutical Industry (《制药工业大气污染物排放标准》) (GB 37823-2019) and the amount of discharge
was calculated by the amount of waste gas emissions and the discharge concentration recorded by the monitoring report.
xii. Jiaozuo Hecheng
Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t) approved (t/a)
Chemical oxygen Master outlet in
97.84 220 4.274 60.8 Nil
Jiaozuo demand industrial
Continuous 1
Hecheng Ammonia wastewater
4.27 35 0.151 8.8 Nil
nitrogen workshop
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Note: The discharge concentration and the total amount of discharge represent the concentration and total amount of ultimate discharge into the downstream sewage treatment plant, and the source is online monitoring
data. Replacement of hazardous waste signs and labels in pipelines follows the latest Technical Specifications for the Setting of Hazardous Waste Identification Signs(《危险废物识别标志设置技术规范》).
xiii. Shanghai Livzon
Discharge
Name of Name of major Number of Distribution of Pollutant discharge Total amount Total amount
Mode of concentration Excessive
company or pollutants and discharge discharge standards implemented of discharge of discharge
discharge （mg/L）/ discharge
subsidiary specific pollutants outlets outlets （mg/L）/（mg/m3） (t) approved (t/a)
（mg/m3）
Chemical oxygen
36.63 500 4.10 6.1738 Nil
demand Master outlet in
Intermittent 1
Ammonia the park
1.88 40 0.21 0.8747 Nil
nitrogen
Shanghai No. 5 and 6
Livzon Particulate matter 2 outlet on the - - 0.008 0.054 Nil
Organized
roof
intermittent
No. 1-4, 7-10
Volatile organic discharge
8 outlets on the 1.42 60 0.23 0.88325 Nil
compounds
roof
Note: The discharge concentration was the average of monthly third-party monitoring data, and the amount of discharge was the cumulative sum of monthly discharge. The discharge of VOCs and particulate matter were
in accordance with the “Emission Standard of Air Pollutants for Pharmaceutical Industry” (《制药工业大气污染物排放标准》) (GB 37823-2019), and the discharge of COD and ammonia nitrogen were implemented
in accordance with the “Integrated Wastewater Discharge Standard” (《污水综合排放标准》)(DB 31/199-2018). Air pollutants discharge follows “Emission Standard of Air Pollutants for Pharmaceutical Industry”
(《制药工业大气污染物排放标准》) (DB31/310005-2021),“Integrate Emission Standards of Air Pollutants” (《大气污染物综合排放标准》) (DB31/933-2015) and “Emission Standards for Odor Pollutants” (《恶
臭（异味）污染物排放标准》) (DB31/1025-2016). Water pollutant discharge follows the “Pollutant Discharge Standard for the Biopharmaceutical Industry” (《生物制药行业污染物排放标准》) (DB31/373-2010).
Shanghai Livzon was among other key pollutant discharge units, but not among the key pollutant discharge units of water environment and atmospheric environment
xiv. Livzon MAB
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Name of Name of major Number of Discharge Pollutant discharge Total amount Total amount of
Mode of Distribution of Excessive
company or pollutants and discharge concentration standards of discharge discharge
discharge discharge outlets discharge
subsidiary specific pollutants outlets (mg/L) implemented (mg/L) (t) approved (t/a)
Chemical oxygen Wastewater
1 21.09 120 1.541 Nil Nil
demand treatment station
Livzon MAB Intermittent
Wastewater
Ammonia nitrogen 1 0.2 20 0.0146 Nil Nil
treatment station
Note: The discharge concentration of pollutants in the wastewater discharge outlet represents the average concentration detected by a qualified third party engaged, by implementing the strictest of Water Pollutant
Discharge Concentration Limits for Newly-Built Enterprises (新建企业水污染物排放浓度限值) of the Emission Standard for Pharmaceutical Industrial Water Pollutants from Mixing and Formulation Category (《混
装制剂类制药工业水污染物排放标准》) (GB 21908-2008), Water Pollutant Discharge Concentration Limits for Newly-Built Enterprises (新建企业水污染物排放浓度限值) of the Discharge Standards for
Biopharmaceutical Industrial Wastewater (《生物工程类制药工业水污染物排放标准》) (GB 21907-2008), or the level 1 of phase II standard of Guangdong Provincial Capping on Polluted Effluents Discharge (《水
污染物排放限值》) (DB 44/26-2001).
xv. Livzon Diagnostics
Pollutant discharge Total amount of
Name of Name of major Number of Discharge Total amount
Mode of Distribution of standards discharge Excessive
company or pollutants and discharge concentration of discharge
discharge discharge outlets implemented approved discharge
subsidiary specific pollutants outlets (mg/L) (t)
(mg/L) (t/a)
Chemical oxygen Sewage
16 500 0.02 Nil Nil
Livzon demand treatment station
Intermittent 1
Diagnostics Sewage
Ammonia nitrogen 0.09 Nil 0.00012 Nil Nil
treatment station
Note: The sewage treated by Livzon Diagnostics was discharged into the South District Sewage Treatment Plant in Zhuhai (珠海市南区水质净化厂), and the waste water discharge was carried out in accordance with
the “Discharge Limits of Water Pollutants of Guangdong Province Standards” (《广东省地方标准 水污染物排放限量值》) (DB 44/26-2001).
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2. Construction and operation of pollution preventive facilities
√Applicable □N/A
Name of company or
Construction and operation of pollution preventive facilities
subsidiary
Exhaust gas: The treatment process of “tertiary spray + mist eliminator + dry filter +
adsorption concentrator + RCO” + “secondary alkali spray” was adopted for fermentation exhaust
gas. The treatment process of “bag type dust collector” was adopted for proportioning process
dust-laden exhaust gas. The treatment process of “secondary alkali spray” was adopted for exhaust
gas treatment facilities in wastewater treatment station. The treatment process of “alkali
adsorption” was adopted for process acid waste gas. The treatment process of “tertiary finned
condenser + bag type dust collector + secondary alkali spray + RTO”/“-20 ℃ condensation +
activated carbon adsorption device (including regenerating device) + RTO”/“adsorption device
(including regenerating device) + secondary alkali spray + biological uptake + secondary alkali
Jiaozuo Joincare spray”/“secondary alkali spray + biological uptake + secondary alkali spray” was adopted for
process organic exhaust gas. 15 discharge outlets were constructed. All of them enable stable and
up-to-standard discharge through self-monitoring in the first half of 2023.
Wastewater: The treatment process of “regulating pool + hydrolysis acidification pool +
UASB + (CASS + air flotation) / modified A/O + secondary settling tank + coagulating
sedimentation” was primarily adopted. Standard wastewater outlets were set; online automatic
monitoring control system was installed at outlets for real-time monitoring of COD, ammonia
nitrogen, total nitrogen, pH, fluorion and flow. Wastewater treatment process sections can be
stably operated. Moreover, wastewater control factors can be stably emitted in compliance with
the required standard.
Taitai Pharmaceutical No new pollution preventive facilities were set up and all facilities functioned properly.
No new pollution preventive facilities were set up. All pollution preventive facilities
Haibin Pharma
functioned properly and ensured up-to-standard discharge.
Wastewater: The wastewater treatment system with daily processing capacity of 600 tons
through A/O process designed by East China University of Science and Technology started
operation in April 2016 and has been functioning properly in the first half of 2023. Moreover,
indicators can be stable and satisfy the required discharge standard. A set of MVR concentration
wastewater treatment plant was added in April 2020, which has been functioning properly in the
first half of 2023. From the second half of 2021 to March 2022, a set of lift aerator system and a
set of magnetic levitation blower were added in the biochemical system, and they have been put
into operation and functioning properly. A new sewage anaerobic treatment system was built in
Xinxiang Haibin 2022.
Exhaust gas: The 40,000 m/h regenerative oxidation exhaust gas treatment system designed
by Jiangsu Ruiding started operation on 2 November 2019 and has been functioning properly in
the first half of 2023. Moreover, factors achieved ultra-low discharge. After reconstruction of dry
tail gas self-circulating process, the activated carbon adsorption pre-treatment device for high
concentration waste gas designed by Beijing Rixin Daneng Technology Co., Ltd. has been
functioning properly in the first half of 2023. After photo-oxidative catalyzation + alkali spray +
water spray treatment with a treatment capacity of 30,000 m/h, the waste gas from biochemical
aerobic process of wastewater treatment was emitted in compliance with the required standard,
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which has been functioning properly in the first half of 2023. A set of tetrahydrofuran membrane
recovery system was added for high concentration exhaust gas treatment of six workshops, which
has been functioning properly in the first half of 2023. The resin adsorption pre-treatment facility
of exhaust gas was added and is currently under construction.
The company strictly complies with the “Three Simultaneous” system of environmental
protection by collecting and treating “Three Wastes (wastewater, waste gas and solid waste)”
according to requirements, and employs an advanced wastewater treatment process known as
“Regulating pool + Hydrolysis acidification tank + Sequencing Batch Reactor Activated Sludge
Process (SBR) and Cyclic Activated Sludge System (CASS) + Air float”. After the wastewater
from production has gone through the above treatment process, all indicators are stable and satisfy
the discharge standard. After meeting the discharge standards, the wastewater is discharged to
Fuzhou Fuxing Jiangyin Sewage Treatment Plant operated by Fujian Huadong Water Treatment Co., Ltd. (福建
华东水务有限公司) via sewage pipe network at the industrial park area for further treatment. In
2022, the waste gas treatment facilities for Fenton pool and regulating pool have been added, and
the waste gas was treated by secondary spraying. The RTO annual maintenance has been
completed in the first half of 2023. In the first half of 2023, the COD concentration was
5634.46mg/L, the ammonia nitrogen concentration was 219.1mg/L; the COD concentration and
ammonia nitrogen concentration discharged into Jiangyin Sewage Treatment Plant (江阴污水处
理厂) were 219.53mg/L and 25.45mg/L respectively.
The “Three Wastes” were collected and treated effectively in strict compliance with the
“Three Simultaneous” system. The sewage treatment facilities with an investment amount of over
RMB30 million have a designed processing capacity of 3,000t/d and adopt the treatment process
of “Pre-treatment + Aerobic pool + Hydrolysis acidification tank + SBR + Catalytic oxidation +
Air float”. The effluent water quality constantly met the standard; the COD concentration of the
influent water in the regulating pool was about 2000mg/L, and the actual COD concentration
discharged after treatment was about 90mg/L (the discharge standard is ≤ 240mg/L), and the COD
treatment efficiency reached 95.5%. The waste gas emitted from sewage treatment was treated
Livzon Xinbeijiang using a biological deodorization box + 3-level high-efficiency sodium hypochlorite and lye spray
+ 1-level alkali spray treatment process; the waste gas emission constantly met the standard. For
the organic waste gas, the refining workshop adopts the most advanced RTO treatment process,
which conveys the waste gas to the RTO furnace chamber at about 800℃ for high-temperature
oxidation and decomposes the volatile organic gases into CO2 and water. In 2023, the fourth round
of environmental protection improvement and renovation was carried out, including a series of
noise reduction measures such as installing sound-proof glass for the shutters on the third floor of
the fermentation department 2, adding an enclosure to the fan on the roof of the refining workshop
and enclosing the MVR and RTO areas with sound-absorbing cotton panels.
The “Three Wastes” were treated in a centralized and effective manner in strict compliance
with the “Three Simultaneous” system and the maintenance and management of pollution
prevention & treatment facilities were enhanced to ensure that pollutant discharge was stable and
in compliance with the required standard. For wastewater，the treatment process of “pre-treatment
Livzon Hecheng
of drainage from the production process + hydrolytic acidification + Upflow Anaerobic Sludge
Bed (UASB) + advanced oxidation + Cyclic Activated Sludge System (CASS) process + air
floatation/ozonation advanced treatment” was adopted. Treated sewage was discharged into
Zhuhai Leaguer Environmental Protection Co., Ltd. (珠海力合环保有限公司) (water purification
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plant in the South District) through the municipal sewage pipeline network. The waste gas was
treated by spray tower, activated carbon adsorption, condensation, liquid nitrogen cryogenic, RTO
and other comprehensive treatment technologies to ensure all kinds of pollutants were effectively
treated and discharged in compliance with the standards.
At the same time when the enterprise started production, the “Three Wastes” were collected
and treated effectively in accordance with the requirements of the “Three Simultaneous” system
of environmental protection. This involves a designed sewage treatment capacity of 1,200t/d,
adoption of the advanced “Anaerobic-Oxic activated sludge process (A/O) + SBR + nitrogen
removal by denitrification + Fenton decolorizing + air flotation” wastewater treatment process,
6,000 m3 of effective reservoir capacity of the treatment system and more than 20 sets of treatment
equipment with 350 KW installed capacity to improve the water treatment process, thus ensuring
that all wastewater treatment indicators are stable and satisfy the discharge standard. The COD
Gutian Fuxing concentration and ammonia nitrogen of untreated wastewater were 2000mg/L and 400mg/L
respectively; the COD concentration and ammonia nitrogen were lowered to 49.382mg/L and
9.59mg/L after treatment, with the removal rate as high as 97.5%. Treated sewage that reaches the
grade II discharge standard is directly discharged into Minjiang River. The hazardous waste of the
company is entrusted to qualified companies for compliant disposal according to the requirements
of environmental impact assessment and acceptance inspection opinions. The boiler exhaust
treatment facilities were upgraded, with the high-efficiency waste gas treatment facility of “SNCR
denitrification + cyclone dust removal + dry desulfurization + bag dust removal + wet
desulfurization” adopted.
The “Three Simultaneous” system was strictly implemented by the company for the treatment
of “Three Wastes” by collecting and treating the “Three Wastes” effectively. The original sewage
treatment plant with an investment amount of over RMB13 million has a designed processing
capacity of 1,500t/d and adopts the treatment process of “Pre-treatment + Hydrolysis acidification
tank + Facultative tank + Aerobic pool + Secondary sedimentation”, and the sewage after treatment
was discharged into Shaoguan Second Sewage Treatment Plant ( 韶关市第二污水 处理厂 )
through the municipal pipeline network. The key pollution indicators are chemical oxygen demand
and ammonia nitrogen; the concentrations at water inlets were 3004mg/L and 14mg/L respectively
in 2022, while the average discharge concentrations at water outlets were 19.64mg/L and
Livzon Limin
0.4592mg/L respectively, far lower than the relevant limits stipulated in the pollutant discharge
license and the removal rates reached 93.45% and 54.08% respectively. In respect of waste gas
treatment, biomass boilers were all replaced by gas boilers. The technical transformation project
of the R&D center has installed waste gas treatment facilities such as activated carbon adsorption
and acid mist spray tower. The key pollution indicators are sulfur dioxide, nitrogen oxides and
particulate matter. The emission concentrations were 0.125mg/m 87.1mg/mand 2.19mg/m
respectively in 2022, far lower than the relevant limits stipulated in the pollutant discharge license.
In respect of control of noise pollution, investment was made to construct noise segregation wall
to reduce noise pollution.
The “Three Wastes” were collected and treated effectively by the Pharmaceutical Factory.
For wastewater: an investment of over RMB10 million was made for phase I and phase II sewage
Livzon Pharmaceutical
treatment station with a designed processing capacity of 1,000t/d, which adopted the CASS
Factory
process for phase I and the A/O process for phase II. The indicator of treated wastewater was
approximately 50% of the standard limit requirement and the sewage after treatment was
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discharged into sewage treatment plants through the municipal pipeline network. For waste gas:
currently, the company uses purchased steam and uses the boilers as backups, greatly reducing air
emissions (sulfur dioxide, nitrogen oxides). The waste gas of the wastewater treatment stations is
treated by a combination of first-level spray towers, Ultra Violet (UV) photoion equipment and
second-level spray towers, and the treated waste gas was far below the national standard limit
requirement.
Through strict enforcement of the “Three Simultaneous” system, the “Three Wastes” were
collected and treated effectively. The designed total processing capacity of sewage treatment was
7,500 m3/d (including one plant with capacity of 5,000 m3/d and one plant with capacity of 2,500
m3/d), and the actual total treatment amount was 2,800 m3/d.
Waste gas treatment: 4 sets of fermentation and 2 sets of refining waste gas treatment adopt
the treatment process of “sodium hypochlorite spray + water spray + two-way superoxide water
spray + micro-nano bubble spray”; 2 sets of waste water treatment tank odor collection and
treatment facilities adopt the treatment process of “three-level spray absorption (level 1: alkaline
water spray absorption + level 2: sodium hypochlorite spray absorption + level 3: sulfuric acid
spray absorption); 1 set of RTO (regenerative thermal oxidizer) waste gas treatment facility adopts
incineration method; two 40-ton circulating fluidized bed boilers (one in operation and one on
Ningxia Pharmaceutical
standby) were in normal operation, adopting the treatment process of “bag dust removal + double
alkali desulfurization + alkaline water spraying and demisting”. General solid waste: slag and
sludge were entrusted for landfill disposal; styrene-acrylic slag is sold as organic fertilizer; styrene-
acrylic mother liquor was outsourced for recycling; styrene-acrylic spent activated carbon and
Lova waste activated carbon were sent to boilers for incineration. Hazardous waste: mycophenolic
acid and Dora waste slag are put into boilers for incineration; spent activated carbon, waste and
empty reagent bottles, waste packaging bags, etc. were all entrusted to qualified companies for
disposal. In 2023, the following pollution prevention measures were mostly completed: 1.
decommissioning the former Xinbeijiang sewage treatment system to abate the source of
malodorous gas generation; 2. carrying out comprehensive cleaning and maintenance of the
existing 9 sets (30 units) of waste gas treatment facilities spray tower.
The “Three Wastes” were collected and treated effectively in strict compliance with the
“Three Simultaneous” system. The designed sewage treatment capacity was 3,000t/d, the
treatment process of “hydrolytic acidification tank + UASB + aerobic pool + materialized
treatment” was adopted, the treated wastewater would be discharged into the sewage treatment
plant of Xiuwu Branch of Kangda Water Co., Ltd. (康达水务有限公司修武分公司) through the
municipal pipeline network. The sewage treatment facilities were under normal operation with
compliant discharge.
In 2023, an operation and maintenance contract in relation to online continuous monitoring
Jiaozuo Hecheng
system for water quality was signed with Jiaozuo Lansheng Environmental Technology Service
Co., Ltd. (焦作市蓝晟环保及时服务有限公司). For waste gas: In 2023, dichloride module
equipment was added in the recycling section, and the waste gas was discharged after being treated
and the standard limit met; The waste gas generated from technical process in the production zone
would be collected and treated by adopting two sets of processes of “spray + activated carbon +
spray + RTO incineration equipment and -20℃ condensation + dichloride module + spray +
activated carbon + spray + RTO incineration equipment” and then discharged after reaching the
required standard. Solid waste and hazardous waste would be stored in the hazardous waste station
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constructed in compliance with the requirements of “Three Protections” (protection against leaks,
erosion and rain) according to the requirements under the (Pilot) Guidelines for Standardized
Management of Hazardous Waste in Henan Province (《河南省危险废物规范化管理工作指南
（试行）》). In 2023, hazardous waste disposal contracts were signed with qualified companies
Anyang Zhongdan Environmental Protection Technology Co., Ltd.（安阳中丹环保科技有限公
司）, Luoyang Dezheng Waste Resources Reuse Co. Ltd. （洛阳德正废弃资源再利用有限公
司）and Qinyang GTC Jidong Environmental Protection Technology Co. Ltd. （沁阳金隅冀东
环保科技有限公司） for regular disposal of hazardous waste. Other general solid waste would
be disposed of in compliance with the relevant requirements. In January 2023, a self-monitoring
and automatic monitoring equipment comparison contract was signed with Henan Chenjian
Inspection Technology Co. Ltd. （河南晨颉检验技术有限公司） to regularly monitor the
company's discharge outlets.
The company designed and built a sewage treatment station with a processing capacity of 200
m3/d in 2018. The company’s wastewater was treated by such sewage treatment station and then
entered the park’s sewage treatment station for secondary treatment, and finally discharged into
the municipal pipeline network. The company had the hazardous waste station in compliance with
the requirements of “Three Preventions” to store hazardous waste and appointed a qualified
company for compliant disposal. The company’s main discharge outlets were treated with
activated carbon adsorption and filtration, and the activated carbon was replaced every half a year
Shanghai Livzon
to ensure that the air emission met the standards. In January 2022, the company demolished the
solid preparation workshop on the third floor and transformed it into a microsphere workshop, and
there is no particulate matter emission from the No. 5 and No.6 discharge outlets accordingly. In
order to meet the regulatory requirements under the new environmental impact assessment (at least
one emission reduction measure to be replaced with a new one), the 4# exhaust stack was upgraded
in March 2023 ， upgrading the secondary activated carbon adsorption equipment and the
monitoring platform processing equipment.
The “Three Simultaneous” system was strictly implemented by Livzon MAB for the
treatment of “Three Wastes” by collecting and treating the “Three Wastes” effectively. For
wastewater (relying on the wastewater treatment of Pharmaceutical Factory in the park): an
investment of over RMB10 million was made for phase I and phase II sewage treatment station
with designed processing capacity of 1,000t/d, which adopted the CASS process for phase I and
Livzon MAB
the A/O process for phase II, and the sewage after treatment was discharged into sewage treatment
plants through the municipal pipeline network. For waste gas: currently, the company uses
purchased steam and takes the boilers as backups, greatly reducing air emissions. The waste gas
of the wastewater treatment stations is treated by a combination of first-level spray towers, Ultra
Violet (UV) photoion equipment and second-level spray towers.
The “Three Simultaneous” system was strictly implemented by Livzon Diagnostics. The
company has sewage treatment facilities, which started construction in 2017 and were completed
and passed the acceptance inspection for use in June 2018. The treatment processes include
sedimentation tanks, regulating tanks, anaerobic tanks, contact oxidation, secondary settling tanks,
Livzon Diagnostics
etc. The sewage after being treated and met the standard was discharged into the South District
Sewage Treatment Plant (南区水质净化厂) through the municipal sewage pipeline. Hazardous
waste and general industrial solid waste generated by Livzon Diagnostics were entrusted to a
qualified third-party company for disposal.
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3. Environmental impact assessment of construction projects and other environmental
protection administrative licensing
√Applicable □N/A
Name of company or Environmental impact assessment of construction projects and other environmental
subsidiary protection administrative licensing
Jiaozuo Joincare was listed in the mandatory clean production directories on key
Jiaozuo Joincare industries in 2023. Currently, the preliminary scheme for this initiative has been finalized.
Feasibility analysis and the implementation of the plan are progressing as scheduled.
Taitai Pharmaceutical The Environmental Impact Report for two new products are currently under review.
No environmental impact assessment project was required in the first half of 2023; with
strict enforcement of the “Three Simultaneous” system in the production process and
Haibin Pharma
implementation of the environmental protection measures required under the environmental
impact assessment, the environmental protection facilities have been functioning properly.
Approval of Environmental Impact Report on 20 Tonnes/Year Meropenem
Pharmaceutical Intermediate Project (Yu Huan Jian [2005] No. 84), Opinions on
Environmental Protection Inspection and Acceptance for 20 Tonnes/Year Meropenem
Pharmaceutical Intermediate F9 Project (Yu Huan Bao Yan [2008] No. 89), Approval of
Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical Intermediate
Expansion Project (Yu Huan Shen [2014] No. 564), Independent acceptance of Approval of
Environmental Impact Report on 100 Tonnes/Year Meropenem Pharmaceutical Intermediate
Xinxiang Haibin
Expansion Project on 24 March 2019, Opinions of Comprehensive Supervision and
Enforcement Bureau of High-tech Zone on Approval of Environmental Impact Report on
Technical Center Expansion Project of Xinxiang Haibin Pharmaceutical Co., Ltd. (Xin Gao
Zong Jian Zi [2020] No. 26) and Reply to the Environmental Impact Assessment Report for
the Peinan Series API Development Project of Xinxiang Haibin Pharmaceutical Co., Ltd (Xin
Huan Shu Shen [2021] No. 24). It reapplied for the pollutant discharge license in the first half
of 2023 and obtained the certificate on 20 June 2023.
The “Environmental Impact Report on the Phase III High-end Antibiotics Project of
Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.” was approved on 23 August 2021.
The Environmental Impact Report on the Phase IV High-end Antibiotics Project of Livzon
Group Fuzhou Fuxing Pharmaceutical Co., Ltd. was approved on 12 October 2022. In March
2023, the second phase, the third phase, the second stage and the third stage of environmental
inspection have been completed. The company strictly implements the “Three Simultaneous”
Fuzhou Fuxing system and takes environmental protection measures required for environmental assessment,
with the environmental protection facilities under normal operation. Approval was granted for
the application of a new national pollutant discharge license on 27 December 2017 and the
renewal of the national pollutant discharge license was completed in December 2020. The
company has been discharging pollutants in strict compliance with the licensing and
administrative requirements. The pollutant discharge license was updated in March 2023 with
a validity period from 27 December 2020 to 26 December 2025.
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The “Environmental Impact Report on Current Status of Projects of Livzon Group
Xinbeijiang Pharmaceutical Manufacturing Inc. (《丽珠集团新北江制药股份有限公司项
目现状环境影响报告书》)” was approved and filed on 6 December 2016; with strict
enforcement of the “Three Simultaneous” system and implementation of the environmental
Livzon protection measures required under the environmental impact assessment, the environmental
Xinbeijiang protection facilities have been functioning properly. The first application for a new national
discharge permit was applied on 29 December 2017, and the renewal of the discharge permit
was processed on 29 December 2022, with a validity period until 28 December 2027. The
discharge permit for the new plant in Shijiao was changed on 8 May 2023 and is valid until 7
May 2028.
The Environmental Impact Assessment Report on Current Status of the Product Structure
and Production Capacity Adjustment Project of Zhuhai FTZ Livzon Hecheng Pharmaceutical
Manufacturing Co., Ltd. (《珠海保税区丽珠合成制药有限公司产品结构及产能调整项目
现状环境影响评价报告》) was approved in December 2016. In 2021, the environmental
impact assessment for expansion of 14 new products including paliperidone palmitate (棕榈
酸帕利哌酮), aripiprazole (阿立哌唑), bismuth potassium citrate (枸櫞酸鉍鉀), i.e. the
“Environmental Impact Assessment Report on Technological Renovation and Expansion
Livzon Hecheng Project of Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.” (《珠海保
税区丽珠合成制药有限公司技改扩建项目环境影响评价报告》), passed the expert
review, and obtained approval on 20 January 2022. The company strictly enforced the “Three
Simultaneous” system and implemented environmental protection measures as required under
environmental impact assessment with normal operation of the environmental protection
facilities. In 2022, it was awarded the green card enterprise of environmental credit rating by
Zhuhai Municipal Ecology and Environment Bureau. In March 2022, the revision and filing
of the emergency plan for environmental emergencies was completed.
The company passed the environmental impact assessment on 30 June 1999 and the
inspection and acceptance upon completion of construction carried out by Environmental
Protection Bureau of Fujian Province on 5 June 2000. The company re-prepared its post-
environmental impact assessment report in 2019 and passed the inspection and acceptance
carried out by experts on 11 June 2019. The company strictly enforced the “Three
Simultaneous” system and implemented the environmental protection measures as required
Gutian Fuxing
under environmental impact assessment, with normal operation of the environmental
protection facilities. In September 2022, the clean production passed the on-site inspection
and acceptance of the Ecology and Environment Bureau, and in October 2022, it obtained the
inspection and acceptance opinions of the Ningde Environmental Protection Science Research
Institute. The existing pollutant discharge license was applied on 26 November 2020 with a
validity period from 29 December 2020 to 28 December 2025.
The Environmental Impact Report on the Technological Reform Project for the R&D
Center of Livzon Group Limin Pharmaceutical Manufacturing Factory (《丽珠集团利民制
药厂研发中心技改项目环境影响报告表》) was approved on 6 December 2019. A review
Livzon Limin expert meeting was held on 24 April 2021, and independent review was completed. The
Environmental Impact Report for Workshop II of Small-capacity Injection (《小容量注射剂
二车间项目环境影响报告表》) was approved on 23 November 2020. On 15 September
2021, a review expert meeting was held, and independent review was completed. The national
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pollutant discharge license was updated on 22 October 2021. The “Three Simultaneous”
system was strictly enforced to implement the environmental protection measures required
under the environmental impact assessment, with normal operation of the environmental
protection facilities. In September 2022, Limin Pharmaceutical Manufacturing Factory passed
the on-site review on clean production by the expert group. In the future, it will continue to
explore the potential of energy conservation and emission reduction, establish and improve
the clean production mechanism and continuously enhance the level of clean production. It
was recognized as a green enterprise in the environmental credit rating by Shaoguan
Municipal Ecology and Environment Bureau consecutively from 2019 to 2022. The pollutant
discharge license was renewed in 2021 with a validity period from 22 October 2021 to 21
October 2026.
The Environmental Impact Report Form for the Newly-added Wet Granulation Line
Project P07 of Pharmaceutical Factory (《丽珠集团丽珠制药厂 P07 新增湿法制粒线项目
环境影响报告表》) was approved on 18 May 2022. Pharmaceutical Factory updated the
pollutant discharge license in June 2022. The Environmental Impact Report Form for New
Boilers and Boiler Low-nitrogen Transformation Project (《新增锅炉及锅炉低氮改造项目
环境影响报告表》) was approved on 19 August 2022. The company will strictly enforce the
Livzon Pharmaceutical “Three simultaneous” system to implement the environmental protection measures as required
Factory by the environmental assessment. The Expansion Project for Production Line of lyophilized
Powder Injection of Livzon Group Livzon Pharmaceutical Factory (《丽珠集团丽珠制药厂
冻干粉针剂生产线扩建项目》) completed its independent acceptance in June 2022, and the
Small-capacity Workshop Construction Project of Livzon Group Livzon Pharmaceutical
Factory (《丽珠集团丽珠制药厂小容量车间建设项目》) completed its independent
acceptance in August 2022. Pharmaceutical Factory updated the pollutant discharge license
in June 2022, with a validity period from 9 June 2022 to 8 June 2027.
The renewal application for the discharge license was completed in December 2020 and
the license is valid until 28 December 2025. The environmental protection inspection for
completion of doramectin expansion project was completed in March 2021. In September
2021, expert review and government filing were completed for the environmental impact
evaluation of project work upon optimized disposal of the company’s solid waste. The
company applied to change its pollutant discharge permit and passed the review of the Pingluo
Branch of Shizuishan Municipal Ecology and Environment Bureau in December 2021. In
December 2022, the company passed the identification of Shizuishan municipal green plant
and prepared an environmental impact assessment report on the increase of phenylalanine
Ningxia Pharmaceutical
production capacity (currently under review by experts). The company reported to the national
pollution discharge license management information platform (pollution discharge
implementation report) and the ecological environment statistics business system (enterprise
environment statistics report) quarterly. In 2022, the company also completed the second
round of rectification of non-compliance under the supervision of central environmental
protection authorities, independent acceptance and government acceptance. The company
strictly enforced the “Three Simultaneous” system to implement the environmental protection
measures as required by environmental assessment, and the environmental protection
facilities were in normal operation.
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The “Environmental Impact Assessment Report on Current Status of Jiaozuo Livzon
Hecheng Pharmaceutical Manufacturing Co., Ltd” (《焦作丽珠合成制药有限公司现状环
境影响评估报告》) was approved and filed on 15 December 2016, the “Three Simultaneous”
system was strictly enforced, the environmental protection measures as required by
environmental assessment were implemented and the environmental protection facilities were
in normal operation. The application for the national pollutant discharge license was
completed in December 2020, the environmental protection policies were strictly enforced
and various management tasks were implemented. In 2023, the “one enterprise, one policy”
Jiaozuo Hecheng
plan for Jiaozuo Hecheng, a VOCs discharge enterprise, was formulated in accordance with
the “Summer Ozone Pollution Prevention and Control Action Plan” (《夏季臭氧污染防治
攻坚战行动方案》 ). In accordance with the “Notice Requirements on Conducting Special
Enforcement Inspections for Enterprises in Volatile Organic Compounds Industry” by
provincial department in 2023 (《省厅 2023 年关于开展涉挥发性有机物行业企业专项执
法检查的通知要求》), comprehensively self-inspection VOCs inspections were carried out,
a list of issues was compiled and active rectifications were made. In March 2023, the current
round of clean production audit work was kicked off.
The company passed the environmental assessment review of the Leuprorelin Acetate
Microspheres for Injection Industrialization Project (《注射用醋酸亮丙瑞林微球产业化项
目》) on 11 October 2010, obtained the approval for the Environmental Impact Report on
Supporting Engineering and Laboratory Projects of Shanghai Livzon Pharmaceutical
Manufacturing Co., Ltd. (《上海丽珠制药有限公司配套工程及实验室项目环境影响报
告 》 ) on 10 January 2020, and completed the construction and passed the acceptance
inspection in September 2020. The renovation of powder injection workshop 2 had completed
in 2022, with the Environmental Impact Statement of Construction Project (《建设项目环境
Shanghai Livzon 影响报告表》) filed in October 2022 and the Approval Opinion of Shanghai Pudong New
Area Ecological Environment Bureau on the Environmental Impact Statement of the
Reconstruction and Expansion Project of Shanghai Livzon Pharmaceutical Manufacturing
Co., Ltd. (《上海市浦东新区生态环境局关于上海丽珠制药有限公司改扩建项目环境影
响报告表的审批意见》) obtained in March 2023. The company strictly implements the
“Three Simultaneous” system and takes environmental protection measures required for
environmental assessment, with the environmental protection facilities under normal
operation. The new Pollutant Discharge License was obtained on 30 May 2023 with a validity
period until 29 May 2028.
The Environmental Impact Assessment Report on the V01 Industrialization Project of
Livzon Group Livzon Pharmaceutical Factory was approved in April 2021; the Environmental
Impact Report Form for the Expansion Preparation Line 3 of the Large-scale Production
Capacity Building Project of Recombinant SARS-CoV-2 Fusion Protein Vaccine (重組新型
Livzon MAB
冠状病毒融合蛋白疫苗) was approved in March 2022. The company updated the pollutant
discharge permit in November 2022. The company strictly enforced the “Three Simultaneous”
system to implement the environmental protection measures as required by environmental
assessment.
Livzon Diagnostics prepared the “Environmental Impact Report on Engineering and
Livzon Diagnostics Production Projects of the New Plant” (《新厂工程及生产项目环境影响报告书》) in 2017,
which was approved by Zhuhai Environmental Protection Bureau on 6 February 2018. The
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environmental protection acceptance inspection was completed in June 2018. In 2020,
according to the Catalogue of Classified Management of Discharge Permit for Stationary
Pollution Sources ( 固定污染源排污许可分类管理名录》)(2019 version) and the Measures
for Pollutant Discharge Permitting Administration (Trial) (《排污许可管理办法（试行）》),
the pollutant discharge license was canceled and the pollutant discharge registration and
filling were carried out.
4. Environmental emergency contingency plan
√Applicable □N/A
Name of company
Environmental emergency contingency plan
or subsidiary
Revision of the environmental emergency contingency plan of Jiaozuo Joincare Pharmaceutical
Industry Co., Ltd. was completed in May 2022 and was filed in the Macun Branch of Ecological
Jiaozuo Joincare Environment Bureau of Jiaozuo City on 19 May 2022.
Revision of the environmental emergency contingency plan for hazardous waste pollution accident
of Jiaozuo Joincare was completed in December 2020.
Taitai The environmental plan is under reevaluation. It has passed experts’ review and is under
Pharmaceutical environmental protection approval.
The Environmental Emergency Contingency Plan was filed (File No. 440308-2020-0029M).
Trainings and drills on emergency responses were provided for employees to improve the capability of
Haibin Pharma
the Company for dealing with environmental emergencies. In the first half of 2023, two emergency drills
for environmental emergencies were held.
Xinxiang Haibin The environmental emergency contingency plan completed filing on 25 August 2022.
Pursuant to relevant provisions and requirements, the Environmental Emergency Contingency Plan
of Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. （《丽珠集团福州福兴医药有限公司突发
环境事件应急预案》） was prepared based on the principles of “prevention-oriented, self-help-oriented,
unified command, and division of responsibility”, which has been filed on 15 April 2022 (File No. 350181-
2022-024-M).
After environmental emergencies occur, immediate, quick, effective and orderly emergency rescue
Fuzhou Fuxing actions shall be taken to control and prevent the spread of accident and contamination, protect the
surrounding environment and safeguard life and property of all employees, the company and nearby
communities. In accordance with the contents and requirements of the plan, the company provides
trainings and drills for its employees to get them well-prepared for environmental emergencies, so that
timely rescue can be taken and the accident can be controlled in a short period of time in case of any
environmental emergencies. A comprehensive emergency drill was conducted in June 2023 for Phase II
Workshop 1 leakage and fire incident.
Based on the principles of “prevention-oriented, On-alert all the time; classified management,
Response by Tiers; cross-department cooperation, Responsibility by Levels; Scientific Prevention and
Efficient handling”, Livzon Xinbeijiang entered into the issued “Environmental Emergency Contingency
Livzon
Plan of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.”（《丽珠集团新北江制药股份有
Xinbeijiang
限公司突发环境事件应急预案》）(File No. 441802-2021-0162-H) again on 30 September 2021, which
was verified and filed by the Qingyuan Municipal Ecology and Environment Bureau on 22 October 2021.
Livzon Xinbeijiang regularly identifies environmental factors and sources of hazards and conducts drills
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on the emergency contingency plan. An environmental emergency contingency drill was conducted in
June 2023 to improve the operability thereof, enhance the performance level of the emergency rescue staff,
responsiveness of the rescue team as well as coordination and collaboration of different tasks.
Pursuant to relevant provisions and requirements, the Environmental Emergency Contingency Plan of
Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.（《珠海保税区丽珠合成制药有
限公司突发环境事件应急预案》） was prepared based on the principles of “Focus on Prevention, Aim
at Self-rescue, Centralized Command, and Division of Responsibility (预防为主、自救为主、统一指挥、
分工负责)”, which has been approved for filing and formally announced with file reference number
Livzon Hecheng
440462-2019-001-M. Trainings on emergency events and disposal measures were held regularly for
employees to enable implementation of safety measures in a timely, fast, effective and orderly manner to
control and prevent the worsening of condition and pollution when encountering any occurrence of
environmental emergency cases, so as to alleviate or eliminate the consequences effectively and resume
orderly production as soon as possible.
Pursuant to relevant provisions and requirements, the Environmental Emergency Contingency Plan
of Gutian Fuxing Pharmaceutical Co., Ltd.（《古田福兴医药有限公司突发环境事件应急预案》） (File
No.: 352200-2017-005-L) was prepared based on the principles of “Focus on Prevention, Aim at Self-
rescue, Centralized Command and Division of Responsibility (预防为主、自救为主、统一指挥、分工
负责)”, which was approved in May 2017. The second amendment of the contingency plan was made in
June 2020, which passed expert review and completed filing (File No.: 350922-2020-002-M). The third
amendment of the contingency plan was made in June 2023, which passed expert review and completed
filing (File No.: 350922-2023-012-M).
Gutian Fuxing According to the plan, the company will conduct an emergency drill for sudden hydrochloric acid
leakage in August 2023, and after environmental emergency incidents occur, immediate, quick, effective
and orderly emergency rescue actions can be taken to control and prevent accidents and the spread of
contamination, protect the surrounding environment effectively and ensure the personal life and property
safety of all employees, the company and the nearby communities. In accordance with the contents and
requirements of the plan, the company provides trainings for its employees. The company is well-prepared
for environmental emergency incidents, so that rescue actions could be taken in a timely manner and
incidents could be controlled effectively in a short period of time in case of any environmental emergency
incidents.
The principles of occupational health and safety and the environment administrative system were
followed, including occupational protection to ensure health, risk control to ensure safety, prevention and
control of pollution to protect the environment, and compliance with discipline and law for continuous
improvement. Identification of environmental factors was performed seriously and preventive measures
were adopted for significant environmental factors, while the governance of the “Three Wastes” was
strengthened to enhance the ability of control over the “Three Wastes” and ensure that the discharge of
the “Three Wastes” had reached the discharge standards. The Environmental Emergency Contingency
Livzon Limin
Plan of Livzon Group Limin Pharmaceutical Manufacturing Factory（《丽珠集团利民制药厂突发环境
事件应急预案》） (File No.: 440203-2021-009-L) was prepared in accordance with the criteria of the
environmental management system and the occupational health and safety administrative system. The plan
was issued in May 2021. According to the requirements of the contingency plan, an environmental
accident emergency drill was conducted on 24 September 2021, and a specific drill summary was made.
Identification of environmental factors and sources of hazards and drills for emergency were conducted
internally in the company on a regular basis to improve the operability of the contingency plan, enhance
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the performance level of the emergency rescue staff, responsiveness of the rescue team as well as
coordination and collaboration of different tasks.
Pursuant to relevant provisions, the Environmental Emergency Contingency Plan of Livzon Group
Livzon Pharmaceutical Factory （《丽珠集团丽珠制药厂突发环境事件应急预案》）was updated by
Pharmaceutical Factory in 2021, and has been approved for filing approval and announced, with the filing
Livzon
number 440404-2021-0212-L. The Pharmaceutical Factory conducted a special emergency response drill
Pharmaceutical
for hazardous waste leakage on 16 June 2023, to train the emergency response team and enhance the
Factory emergency response and execution abilities of the participants, further clarify the responsibilities and tasks
of relevant personnel, improve the emergency linkage mechanism, improve the awareness of risk
prevention and the ability of self-rescue and mutual rescue.
The Environmental Emergency Contingency Plan of Livzon Group (Ningxia) Pharmaceutical
Manufacturing Co., Ltd.（《丽珠集团（宁夏）制药有限公司突发环境事件应急预案》） was verified,
filed and issued in May 2019 (File No.: 640221-2019-005-II). Identification of environmental factors and
sources of hazards and drills for emergency were conducted internally in the company on a regular basis
Ningxia
to improve the operability of the contingency plan, enhance the performance level of the emergency rescue
Pharmaceutical
staff, and enhance the responsiveness and coordination of the rescue team in terms of integrated
coordination and collaboration capabilities. The Environmental Emergency Contingency Plan was
amended in May 2021, and passed expert review and was reviewed by and filed with government
environmental department in August 2021(File No.: 640221-2021-054-H).
The Environmental Emergency Contingency Plan of Jiaozuo Livzon Hecheng Pharmaceutical
Manufacturing Co., Ltd.（《焦作丽珠合成制药有限公司突发环境事件应急预案》）was prepared in
accordance with the relevant provisions and requirements and based on the principles of “Focusing on
Prevention, On-alert all the time; Management by Classification, Response by Tiers, Cooperation among
Departments, Responsibility by Levels; Scientific Prevention and Efficient Disposal”. The contingency
plan was approved for announcement and filing in April 2021 (File No.: 4108042018005L). The
Hazardous Waste Environmental Pollution Emergency Contingency Plan of Jiaozuo Livzon Hecheng
Pharmaceutical Manufacturing Co., Ltd.（《焦作丽珠合成制药有限公司危险废物环境污染事故应急
Jiaozuo Hecheng
预案》）was compiled and was approved for filing in January 2018. Identification of environmental factors
and sources of hazards and drills for emergency were conducted internally in the company on a regular
basis to improve the operability of the contingency plan, enhance the performance level of the emergency
rescue staff, and enhance the responsiveness and coordination of the rescue team in terms of integrated
coordination and collaboration capabilities. In 2023, the company newly formulated the Environmental
Protection Assessment System (《环保考核制度》), Jiaozuo Livzon EHS Environmental Protection
Assessment System (《焦作丽珠 EHS 环保考核制度》) and Jiaozuo Livzon Potential Safety Hazard
Screening Responsibility System (《焦作丽珠隐患排查责任制度》).
In March 2022, the Environmental Emergency Contingency Plan of Shanghai Livzon Pharmaceutical
Manufacturing Co., Ltd.（《上海丽珠制药有限公司突发环境事件应急预案》） (File No.: 02-310115-
2022-108-L) was filed by the company. The company conducts drills and reviews of the plan every year
to improve its emergency response capabilities through regular training on the plan. On 22 May 2023,
Shanghai Livzon
Shanghai Livzon completed the filing and registration of the General Emergency Response Plan for Work
Safety Incidents (《生产安全事故综合应急预案》) (File No.: 3101150000002023052200058), in order
to improve the emergency response capabilities for production safety accidents through training on the
emergency response plan.
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Pursuant to relevant provisions, the Environmental Emergency Contingency Plan of Livzon MAB（《丽
珠单抗突发环境事件应急预案》）was prepared by Livzon MAB in 2022. In April 2023, the company
Livzon MAB
conducted an emergency drill for hazardous waste leakage in the hazardous goods warehouse to enhance
emergency response capabilities of staff, so as to alleviate or eliminate the impact of the consequences.
In accordance with relevant regulations, Livzon Diagnostics carried out a risk assessment of
environmental emergencies and emergency resources survey in 2021, and prepared the Environmental
Emergency Contingency Plan of Zhuhai Livzon Diagnostics Inc. (《珠海丽珠试剂股份有限公司突发环
Livzon 境事件应急预案》) which was approved for filing and announced. Regular training on emergency
Diagnostics response and disposal measures was provided to employees to equip them skills of executing safety
measures timely, rapidly, effectively and orderly in environmental emergencies, in order to control and
prevent the spread of risk and pollution, reduce or eliminate the impact of the consequences, and resume
the production as soon as possible.
5. Environmental self-monitoring program
√ Applicable □ N/A
Name of
company or Environmental self-monitoring program
subsidiary
In accordance with the self-monitoring program for pollutant discharge licenses, Jiaozuo Joincare
completed the self-monitoring program for wastewater and waste gas for the year 2023 at the beginning
of the year. The self-monitoring activities were carried out in accordance with the self-monitoring plan.
As of the end of June, the self-monitoring for wastewater and waste gas for the first half of 2023 has been
Jiaozuo Joincare
successfully conducted as scheduled.
The company is a key enterprise in terms of soil management, and is required to carry out self-
monitoring of soil annually. The company has completed the preparation, on-site sampling and review of
self-monitoring program on soil as of June and the samples are under testing currently.
Wastewater was monitored once a quarter; boiler exhaust gas and plant boundary noise were
Taitai monitored once a year; exhaust gases generated from technical process was monitored once half a year;
Pharmaceutical online monitoring facilities of wastewater and boiler exhaust gas were additionally installed and
functioning well.
A third party is entrusted to conduct regular monitoring strictly in compliance with the relevant
national laws and regulations and local requirements and ensure the accuracy, validity and authenticity of
Haibin Pharma the monitoring data. Online wastewater monitoring equipment was installed and connected to
environmental monitoring stations at municipal and district levels in accordance with environmental
monitoring technical standards. Data was promptly uploaded on the national monitoring platform.
A self-monitoring program was prepared, quarterly self-monitoring of exhaust gas and wastewater in
Xinxiang Haibin
accordance with the pollutant discharge license and annual self-monitoring of soil has been completed.
According to the relevant requirements of the “Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation)
(《国家重点监控企业自行监测及信息公开办法(试行)》)” and the “Self-monitoring Technology
Fuzhou Fuxing
Guidelines for Pollution Sources–Pharmaceutical Industry Fermentation Products Category (HJ 882-
2017) (《排污单位自行监测技术指南发酵类制药工业(HJ 882-2017)》)”, the company has completed
the establishment of the self-monitoring program based on its own situation in a timely manner and made
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the program available to the public after being examined by and filed with Fuqing Environment Protection
Bureau and Fuzhou Environment Protection Bureau. The analysis methods of the monitoring program
comply with the national environmental monitoring technical standards and methods; the monitoring and
analysis instruments have been examined and calibrated in strict compliance with the relevant national
requirements; the automated monitoring equipment has been installed in accordance with the requirement
of environmental assessment technical standards, which are connected to relevant environmental
protection authorities and have passed the inspection and acceptance of the relevant environmental
protection authorities. The automated monitoring equipment has been functioning properly and the
monitoring information is accurate, valid and authentic. In May2023, the work on leakage detection and
repair (LDAR) of volatile organic compounds (VOCs) was completed. Information publicity website:
http://wryfb.fjemc.org.cn
According to the relevant requirements of the “Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation)
(《国家重点监控企业自行监测及信息公开办法（试行）》 )”, the company has completed the
establishment of the self-monitoring program based on its own situation in a timely manner and made the
program available to the public after being examined by and filed with Qingyuan Environment Protection
Bureau. The analysis methods of the monitoring program comply with the national environmental
monitoring technical standards and methods; the monitoring and analysis instruments have been examined
and calibrated in strict compliance with the relevant national requirements. The automated monitoring
Livzon equipment for wastewater (COD, ammonia nitrogen, pH, flow) and waste gas (non-methane
Xinbeijiang hydrocarbons) has been installed in accordance with the requirement of environmental assessment
technical standards, and the connection between online information and national development platform
and Qingyuan municipal platform has been completed. Online monitoring equipment for wastewater has
passed the inspection and acceptance of relevant environmental protection authorities. The automated
monitoring equipment has been functioning properly and the monitoring information is accurate, valid and
authentic. In accordance with the requirements of the specification, a third party is hired to conduct LDAR
every six months for workshops that use VOCs. Livzon Xinbeijiang Pharma conducts monitoring of
diffusive volatile organic compounds around the workshop of the first refinery division on a semiannual
basis, and the monitoring results for the first half of 2023 met the standards.
Through self-monitoring, the requirements under the Technical Standards for Application and
Issuance of Pollutant Discharge License for the Pharmaceutical Industry – Active Pharmaceutical
Ingredient Manufacturing (HJ858.1-2017) (《排污许可证申请与核发技术规范制药工业 - 原料药制
造(HJ858.1-2017)》) were strictly implemented, and the monitoring and analysis instruments were
examined and calibrated in strict compliance with relevant provisions. The automated monitoring
Livzon Hecheng
equipment was installed in accordance with the requirements of environmental assessment technical
standards, while online monitoring equipment for non-methane hydrocarbons, COD, ammonia nitrogen
and pH level were installed and connected with the national development platform as required. In 2022, a
third party was entrusted to conduct LDAR inspection, discharge outlet inspection, factory boundary noise
monitoring and soil inspection on a regular basis, and all inspection results met the required standards.
According to the relevant requirements of the “Measures for Self-Monitoring and Information
Disclosure by Enterprises subject to Intensive Monitoring and Control of the State (Trial Implementation)
Gutian Fuxing ( 《 国 家 重 点 监 控 企 业 自 行 监 测 及 信 息 公 开 办 法 ( 试 行 ) 》 )”, the company has completed the
establishment of the self-monitoring program based on its own situation in a timely manner and made the
program available to the public after being examined by and filed with Ningde Ecology and Environment
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Bureau and Ningde Gutian Ecology and Environment Bureau. The analysis methods of the monitoring
program comply with the national environmental monitoring technical standards and methods; the
monitoring and analysis instruments have been examined and calibrated in strict compliance with the
relevant national requirements; the automated monitoring equipment has been installed in accordance with
the requirements of environmental assessment technical standards, connected to the network of competent
environmental protection authorities and passed the acceptance inspection conducted by the competent
environmental protection authorities. The automated monitoring equipment was sound, and the monitoring
information was accurate, valid and authentic. In June and December 2022, a qualified third party was
engaged on two occasions to complete the leakage detection and repair (LDAR) work of volatile organic
compounds and relevant reports were obtained. Information publicity website: http://wryfb.fjemc.org.cn
An entity with national qualification on inspection was engaged to conduct monitoring strictly in
compliance with the relevant national laws and regulations and standards. By considering its own specific
conditions, the company appointed the inspection party to carry out water pollutant detection monitoring
every quarter, boiler waste gas monitoring every month and R&D Center VOCs waste gas monitoring
every six months, each time the monitoring would be conducted strictly in compliance with the relevant
Livzon Limin national requirements to ensure the accuracy, validity and authenticity of the monitoring data. The online
monitoring equipment for COD and ammonia nitrogen in water passed the acceptance inspection and the
equipment was put into operation in January 2021, and it will perform monitoring every 2 hours. Data
should be completed and filed to the Pollutant Source Sharing Data Platform of the Shaoguan Municipal
Ecology and Environment Bureau on a timely basis, and the relevant data would be announced to the
public after being reviewed by the Shaoguan Municipal Ecology and Environment Bureau.
Inspection party with national qualification on inspection was engaged to conduct monitoring strictly
in compliance with the relevant national laws and regulations and standards. By considering its own
specific conditions, the company appointed the inspection party to carry out monitoring on wastewater
Livzon
and waste gas every month, each time the monitoring would be conducted strictly in compliance with the
Pharmaceutical
relevant national requirements to ensure the accuracy, validity and authenticity of the monitoring data.
Factory The installation and commissioning of the online sewage monitoring equipment was completed and it was
put into use at the beginning of 2021. All test parameters were within normal ranges for the first half of
2023.
The company formulated the self-monitoring program for 2022, which was reviewed by and filed
with Shizuishan Municipal Ecology and Environment Bureau. Monthly and quarterly monitoring was
carried out strictly in accordance with the requirements of the program, which focused primarily on
organized air emissions, air emissions from boilers, wastewater, underground water, soil, diffusive
environmental air, noise and recycled water TOC at plant boundary. The monitoring results would be
announced to the public through the System of National Pollution Sources Monitoring Information
Ningxia
Management and Sharing Platform (《全国污染源监测信息管理与共享平台系统》) and the System of
Pharmaceutical
Self-monitoring Information Open Platform for Enterprises in Shizuishan (《石嘴山市企业自行监测信
息公开平台系统》). The leakage detection and repair (LDAR) work of volatile organic compounds was
carried out. The automated monitoring equipment was passed the inspection and acceptance conducted by
the competent environmental protection authority and connected to the network of the competent
environmental protection authority. The automated monitoring equipment was sound, and the monitoring
data was accurate, valid and authentic.
According to the relevant requirements of the Measures for Self-Monitoring and Information
Jiaozuo Hecheng
Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State (Trial
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Implementation) (《国家重点监控企业自行监测及信息公开办法(试行)》), the company implemented
and completed the self-monitoring program based on its own situation in a timely manner and made the
program available to the public after being examined by and filed with relevant competent environmental
protection authorities. The analysis methods of the monitoring program comply with the national
environmental monitoring technical standards and methods. The monitoring and analysis instruments have
been examined and calibrated in strict compliance with the relevant national requirements. The leakage
detection and repair (LDAR) of volatile organic compounds was completed in June 2023. The inspection
of equipment and facilities such as solvent pipes and flanges in the workshop was conducted and
maintenance and rectification were carried out on the places where there was leakage. According to the
requirements of environmental testing technical specifications, the company has installed online automatic
sewage monitoring equipment, and also installed online monitoring equipment for COD, ammonia
nitrogen, pH value, flow rate and total nitrogen, which were connected to the Guofa platform (国发平台)
as required. The company carried out monitoring on a monthly and quarterly basis in strict compliance
with the requirements of the self-testing scheme, which focused primarily on organized air emissions,
wastewater, diffusive environmental air and noise at plant boundary.
In accordance with the relevant requirements of the General Rules for the Self-Monitoring Technical
Guidelines for Pollutant Discharge Units (《排污单位自行监测技术指南总则》) (HJ 819-2017) and the
pollutant discharge license, the company organized self-monitoring and information disclosure of the
pollutants it has discharged, and formulated the self-monitoring program. In 2022, the company monitors
Shanghai Livzon main air emission outlets once a month, common discharge outlets once half a year, noise once every
quarter and wastewater once a month. The monitoring items and frequency shall meet the requirements of
the pollutant discharge license. The other three enterprises in the park and the third-party sewage treatment
company in the park enter into an agreement to install an online monitoring comparator at the main
discharge outlet for effective monitoring of sewage discharge.
The company entrusted an agency with national testing qualifications to carry out monitoring in strict
compliance with relevant national laws, regulations and standards. By considering its own specific
conditions, the company entrusted the inspection party to carry out monitoring on wastewater and waste
Livzon MAB
gas on a regular basis in accordance with the requirements of the implementation plan of the pollutant
discharge permit, and each time the monitoring was conducted strictly in compliance with the relevant
national requirements to ensure the accuracy, validity and authenticity of the monitoring data.
Wastewater: An agency with national testing qualifications was entrusted to carry out monitoring in
strict compliance with relevant national laws, regulations and standards. The testing agency conducts
quarterly inspections on water quality indicators such as chemical oxygen demand, ammonia nitrogen and
Livzon
suspended solids in strict accordance with the relevant national regulations to ensure the data collected
Diagnostics
from daily monitoring is accurate, valid, true, and meets the emission standards. Waste gas and noise: An
inspection of noise and waste gas at the plant boundary is undertaken annually to ensure the monitoring
data is accurate, valid, true, and meets the emission standards.
6. Administrative penalties imposed for environmental issues during the Reporting Period
□ Applicable √ N/A
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7. Other environmental information to be disclosed
□ Applicable √ N/A
(II) Statement on environmental protection measures of companies except for key pollutant
discharge units
√ Applicable □ N/A
The rest subsidiaries of the Company strictly implemented and obeyed the Environmental Protection Law of
the People's Republic of China, Cleaner Production Law of the People's Republic of China and other
environmental protection and safe production laws and regulations. We constantly increased investment in
environmental protection, continuously invested in energy conservation and consumption reduction projects,
actively promoted cleaner production, improved comprehensive utilization efficiency of resources, and
reduced and prevented the generation of pollutants, all while safeguarding the mental and physical health of
employees. These efforts are directed towards achieving a coordinated and sustainable development of
economic, environmental and social benefits.
1. Administrative penalties imposed for environmental issues
□ Applicable √ N/A
2. Refer to other environmental information disclosed by key pollutant discharge units
□ Applicable √ N/A
3. Reason for non-disclosure of other environmental information
□ Applicable √ N/A
(III) Statement on subsequent progress or change in environmental information disclosed during
the Reporting Period
□ Applicable √ N/A
(IV) Relevant information contributing to ecological protection, pollution prevention and control,
and fulfillment of environmental responsibilities
√ Applicable □ N/A
Relevant information contributing to ecological protection, pollution prevention and control,
Name of company
and fulfillment of environmental responsibilities
Jiaozuo Joincare Leak Detection and Repair (LDAR)work in the first half of 2023was completed.
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Self-monitoring of soil and groundwater, as well as detection and treatment of hidden hazards
were carried out in 2023.
Carbon emission verification for the year 2022 was completed.
Taitai It was listed on the positive list of enforcement by the Nanshan Management Bureau of the
Pharmaceutical Shenzhen Municipal Bureau of Ecology and Environment.
Consumables of exhaust gas prevention and treatment facilities were replaced as scheduled to
Haibin Pharma guarantee the treatment efficiency of exhaust gas; MBR films for waste water treatment were
replaced and guaranteed the discharge of waste water under standards.
The Letter of Undertaking for Environmental Protection was submitted by the Company to the
competent authority.
Xinxiang Haibin
LDAR leak detection and repair for the first half of the year was completed.
Environmental taxes were paid in full and on time.
In terms of the comprehensive utilization of rainwater, it introduced the design concept of sponge
Joincare Haibin city in the design and construction to achieve the maximum use of water resources. It adopted
centralized heat supply to reduce the emission of waste gas from boilers.
LDAR leak detection and repair was completed; unorganized emission of VOCs was reduced;
construction of phase II (Paromomycin, Telavancin, Pentostatin, Teicoplanin and Kanamycin
Monosulfate), phase III (Pasiniazid and Polymyxin B), stage II (Emodepside, Dalbavancin and
Moxidectin) and stage III (Afoxolaner, Fluralaner, Cyclosporine and Selamectin) were completed
and the acceptance inspection on environmental protection was passed in 2023. In the environmental
Fuzhou Fuxing
credit evaluation completed, the company was rated as an environmentally credible enterprise. The
monthly and quarterly self-monitoring on waste water, waste gas and noise was completed as
required. The detection results met the emission standards. The annual maintenance on the equipment
for RTO exhaust was completed to ensure its safe operation and the emission of exhaust gas within
the emission standards.
Leakage detection and repair (LDAR) was completed as required in the first half and unorganized
emission of VOCs was reduced; a series of noise control and improvement measures, such as
installing soundproof glass in the louvers on 3/F of Workshop II of Fermentation to block the
fermentation and stirring noises and using sound-absorbing cotton panels to surround the MVR to
Livzon Xinbeijiang block the noise from the operation of the MVR; other equipment with loud noises in the factory has
been surrounded by sound-absorbing cotton panels to reduce noise. The self-monitoring plan of the
whole year was completed and the results of waste water, exhaust gas and noise met the emission
standards. A qualified third party is entrusted to dispose of the waste in compliance with laws and
regulations.
Two rounds of LDAR leak detection and repair were completed in the first half of 2023;
unorganized emission of VOCs was reduced; approval for bidding and procurement of the new
equipment for RTO exhaust was completed and the equipment is under installment and one of the
new and existing equipment for RTO exhaust will be under use while the other will stand by after the
Livzon Hecheng completion of installment to ensure its safe operation and the emission of exhaust gas within the
emission standards; replacement and upgrading of treatment facilities for exhaust gases generated
from technical processes of the refining workshop and 103 workshop were completed; waste water
treatment systems were under stable operation and the discharge was within the emission standards;
qualified units were entrusted to treat hazardous waste with a compliance treatment rate of 100%.
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The self-monitoring program was completed and environmental responsibilities were fulfilled as
required.
Volatile organic matter leak detection and repair (LDAR) for the first half of 2023 was completed
and a report was obtained; cover and sealing were added to pools with high concentration and primary
sedimentation pools for sewage treatment and waste gas was collected and treated so as to avoid odor
emit; HV frame was replaced in the sewage treatment workshop; water content of sludge was
reduced; total volume of sludge was reduced; sludge generated was entrusted to qualified units for
treatment; the collection, recovery, treatment of VOCs were completed and online monitoring
facilities was installed and put into operation to reduce the random emission of VOCs; and the
Gutian Fuxing
entrusted testing of waste water, waste gas, soil and groundwater for the first half of 2023 was
completed, with the results showing they all met standards. The construction of the 12-tonne biomass
boiler and the upgrading and reconstruction of boiler tail gas treatment facilities were completed. The
efficient exhaust gas treatment facilities with “SNCR denitration + cyclone dust removal + dry
desulfurization + cloth bag dust removal + wet desulfurization” were adopted. Hazardous waste was
entrusted to qualified companies for compliant treatment to reduce the risk of environmental
pollution.
1. Pollutants were discharged according to the standards in the pollution discharge license and
the annual self-monitoring of pollution discharge plan was formulated; a third-party environmental
detection company was entrusted to conduct regular environmental test on the factory. Test results
showed that there was no excessive discharge for the period of January to June 2023; 2. The measures
on energy conservation and emission reduction were formulated according to ESG objectives in
2023; 3. Facilities and equipment at waste water treatment stations were regularly maintained; 4.
Post-treated waste water was used for watering flowers, trees and grass in the factory in three lines.
The recycling of waste water is expected to be approximately 400 tonnes each month and
approximately 4,800 tonnes each year; 5. Soil testing and underground water testing were carried out
Livzon Limin
on hazardous waste warehouses and the test results were in line with the standards; 6. Identification
and updating of environmental factors were carried out in the whole factory. A total of 4,304
environmental factors were identified, including 3,442 general environmental factors and 862 key
environmental factors; 7. Argumentation on the comprehensive use of waste alcohol was carried out
and it will be recycled and reused in waste water treatment stations to improve the treatment effect
of waste water. The fees on supplementing carbon resources at waste water treatment stations were
approximately RMB148,200 each year and the fees on the treatment of waste alcohol at TCM
workshops I, II and III were approximately RMB35,910. Relevant fees were approximately
RMB184,110 for the whole year.
Online monitoring on waste water treatment stations was carried out as required; a qualified third
party was entrusted to detect waste water and waste gas; the monthly and quarterly self-monitoring
Livzon of the enterprise was completed as required. Compliant treatment of hazardous wastes was made to
Pharmaceutical reduce the risk of environmental pollution. Environmental impact assessment was conducted for new
Factory workshops and acceptance of environmental protection project of the newly-built workshop was
completed as required. The facilities and exhaust gas equipment at the waste water treatment station
were renovated and buildings near the waste water treatment station were renovated.
Suspended the use of the waste water treatment system of the former Xinbeijiang while ensuring
Ningxia
the compliant treatment and discharge of waste water within the standards and reduced sources of
Pharmaceutical
odor gas; conducted comprehensive washing and maintenance of the spraying towers of the current
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9 sets (30) exhaust gas treatment facilities; replaced DN300 drainage pipes with a length of 600
meters (the original pipes leaked due to corrosion); obtained the recognition as a green factory at the
level of the autonomous region; obtained the rating as a “green card” enterprise in the appraisal on
the environment and credit and enterprises in the autonomous region in 2022; obtained the honor of
an outstanding enterprise in pollutants treatment in Pingluo county in 2022; entrusted a third party to
conduct repair, maintenance and operation of online monitoring equipment on VOCs in the exhaust
gas from the RTO; completed LDAR detection and repair as required; completed self-inspection of
the enterprise as required;
Carried out automation construction; completed the repair and inspection of LDAR in the first
half and retested in the workshop in July; Exhaust gas: dichloro film equipment was added in the
recycling stage in 2023 and exhaust gas was emitted after treatment and meeting the standards; two
techniques, namely “spraying + activated carbon + spraying + RTO incinerator equipment” and “-
20℃ condensation + dichloro films + spraying + activated carbon + spraying + RTO incinerator
equipment”, were adopted to conduct collection and treatment of exhaust gas from processes in
production areas and achieve emission under standards. Certain exhaust gas treatment equipment was
replaced to ensure the treatment effect; hazardous waste was entrusted to a qualified unit for disposal,
and the compliance disposal rate reached 100%; a qualified third party was entrusted to detect the
exhaust gas; a qualified third party was entrusted to provide operation and maintenance services for
Jiaozuo Hecheng
wastewater system equipment; the implementation of “one policy for one plant” for emergency
emission reduction in heavily polluted weather by the Municipal Environmental Protection Bureau
was completed and the RTO incinerator equipment was operated normally this year; participated in
various trainings organized by the municipal and district ecological and environmental bureaus;
replaced logos and labels of hazardous waste based on the latest Technical Specifications on the
Setting of Identification Logos of Hazardous Waste 《危险废物识别标志设置技术规范》). In 2023,
the Company newly formulated the Appraisal System on Environmental Protection (《环保考核制
度》), the Appraisal System on EHS Environmental Protection of Jiaozuo Livzon (《焦作丽珠 EHS
环保考核制度》) and the Responsibility System on Inspection of Hidden Dangers of Jiaozuo Livzon
(《焦作丽珠隐患排查责任制度》).
The company has completed the Filing and Registration of the Contingency Plan for Emergent
Environmental Incidents; completed the VOCs emission reduction milestone of “one plan for one
factory” in accordance with the plan; discharged pollutants in strict accordance with the Sewage
Discharge Permit System obtained, formulated the annual emission self-monitoring programme at
the beginning of the year and implemented emission self-monitoring according to the programme,
and completed the annual implementation report of the emission permits without any violations of
laws or regulations. Meanwhile, we strengthened the daily supervision of the operation of the waste
gas treatment facilities and sewage treatment stations, and entrusted a third party to test the emissions
Shanghai Livzon
of waste gas and sewage every month to ensure the effective operation of the equipment and facilities.
The safety facilities, occupational disease protection facilities and pollution prevention facilities of
the “Preparation Line 3 and Assembly Line 2 Purification Plant and Utility System” project were
designed, constructed and put into production and use at the same time as the workshop renovation
project. In order to reduce the emission concentration of exhaust gas and reduce the emission of
VOCs, double activated carbon was added and installed to exhaust funnel 4 and it can reduce the
emission concentration of exhaust gas and reduce the emission of VOCs after one more treatment.
Water purifiers were replaced to improve the efficiency of making water with purifiers.
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Entrusted a qualified third party CTI to test the waste water and waste gas according to the
requirements of the pollutant discharge license, and entrusted a qualified entity, Dongjiang
Environmental-protection Doumen Yongxingsheng Environmental-protection, Co., Ltd. of
Dongjiang Environmental Protection (东江环保斗门永兴盛环保公司), to dispose of hazardous
Livzon MAB wastes in accordance with the regulations, so as to reduce the risk of environmental pollution. Carried
out the environmental impact assessment of the new workshop according to the requirements of
“Three Simultaneities” for construction of workshops newly built, rebuilt and expanded. The
production and R&D sewage was uniformly discharged into the sewage station of Livzon
Pharmaceutical Factory in Livzon Industrial Park for treatment and discharge up to the standard.
Waste water: an entity with national qualification on inspection was engaged to conduct
monitoring strictly in compliance with the relevant national laws and regulations and standards. The
inspection party carried out routine environmental monitoring on chemical oxygen demand, ammonia
nitrogen, suspended solids and other indicators on water quality. The inspection is carried out on a
Livzon Diagnostics quarterly basis with every monitoring strictly in compliance with the relevant national requirements
to ensure the accuracy, validity and authenticity of the monitoring data and meeting the discharge
standards. Exhaust gas and noise: an entity was engaged to conducting testing on exhaust gas and
noise at the factory boundary each year and the monitoring data was accurate, valid and authentic
and met the emission standards.
(V) Measures taken add effects on carbon emission reduction during the Reporting Period
√Applicable □N/A
Name of company or
Measures taken and effects on carbon emissions reduction during the Reporting Period
subsidiary
Invested over RMB0.98 million to update the CASS aeration system, reducing the load of fans
Jiaozuo Joincare and saving 257,000 kWh of electricity each year, equivalent to reducing the carbon dioxide emission
by approximately 135tCO2.
1. Lighting facilities in the park were replaced with “energy-saving lamps” in response to the
call of the municipal government, producing prominent energy-saving effect;
2. The high-power motor in the factory was replaced with the efficient energy-saving motor in
accordance with energy-saving requirements of the government and frequency conversion devices
Taitai Pharmaceutical
were installed to maximize energy conservation;
3. Low-NOx burner of the 4T boiler was upgraded in response to the call of “Green Shenzhen”;
4. Employees were organized to learn energy conservation knowledge so as to achieve energy
conservation and emission reduction in routine work by turning off lamps and machines timely.
Adjusted production plans and conducted centralized production to reduce the energy
Haibin Pharma
consumption of unit product.
With energy-saving pumps provided by Xinxiang Sanjiang Air Conditioning Co., Ltd. (新乡
市三江冷气有限公司), the energy-saving benefits are shared by the two parties. It saved electricity
with the electricity fees saved sharing by the two parties. The use time of each pump is subject to
Xinxiang Haibin
time totalizers and electricity meters. The equipment shall belong to Xinxiang Haibin and the sharing
of benefits shall terminate after the accumulated operation time of each equipment reaches 52,560
hours.
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Formulated plans based on new standard energy-saving equipment in the purchase process,
developed the habit and thinking of saving electricity and turning off lights when leaving; refused
waste and advocated civilized dining; promoted low-carbon travelling in green and environmental
Joincare Haibin manners; saved natural gas and carried out multiple maintenance in daily use of boiler, and
frequently inspected pipelines, took good insulation measures, and used pure electric cars to save
fuel when going out. Adopted solar water heater in the dormitory, reduced plastics, conducted green
consumption; advocated for online working and paper saving, etc.
Used photovoltaic power generation to reduce power consumption; renovated high-energy
consuming pumps for energy conservation to effectively reduce energy consumption; replaced with
Fuzhou Fuxing high-efficiency motor water pumps to save energy consumption; vigorously promoted energy
conservation and consumption reduction, and called on employees to realize the concept of “turning
off lights, air conditioners and computers before leaving office” during their daily work.
Used photovoltaic power generation to reduce power consumption; used water kinetic energy
instead of electric motors to drive the cooling tower fans to reduce the electric energy consumption
while ensuring the cooling effect; used LED lights to reduce power consumption, and raising
Livzon Xinbeijiang
employees’ awareness in power conservation and safety; promoted to set the temperature of the air
conditioner to not lower than 26C; promoted green travels by encouraging the use of public
transportation thereby reducing the use of private cars.
Maintained and updated chiller units to make more rational use of energy and saved electricity
consumption for production through more reasonable production scheduling by the production
department; used natural gas as fuel for canteens and boilers; replaced sewage treatment Roots
blowers in the environmental protection center with magnetic levitation blowers with an energy
saving rate of about 30%, saving about 107,000 kWh of electricity consumption per year; replaced
Livzon Hecheng the ultra-low-nitrogen boiler has increased thermal efficiency by 10%, saved 10 cubic meters of
natural gas per ton of steam consumption, and reduced nitrogen oxide emissions by 80%; called on
all employees of the factory to respond to electricity conservation, turn off lights and air conditioners
before leaving office, and limited the minimum temperature of air conditioners; promoted green
travel, encouraged the use of public transportation when going out to work, and set up shuttle buses
to transport employees to and from work.
Installed 4 air compressors with a capacity of 130 m3/min to replace the original air compressor
with high power consumption to reduce power consumption; replaced one chiller unit to reduce
electricity consumption; replaced a 100 m3/min air suspension blower and three 55KW Roots air
Gutian Fuxing
compressors to reduce power consumption and on-site noise; called on all employees to “save every
drop of water, save every kilowatt of electricity”, so that the lights are turned off and the equipment
is powered off before people leaving office.
1. Installed an online remote automatic data monitoring system in the boiler room to analyze
and judge the instantaneous flow rate monitoring of the flowmeter in the boiler room, checked
whether the steam traps and exhaust valves in the factory were in sound condition, and thereby
reduced the waste of steam. The average steam loss in the public pipelines of the factory was 15.6%.
Livzon Limin The steam loss was reduced to 11% via the relevant renovation of steam pipelines and it was
expected that 1,242 tons of steam could be saved thereby; 2. The steam pipelines in the animal room
of the research and development center were re-insulated and the steam traps were remodeled to
prevent the occurrence of long-time steam exhaust due to the failure of water valves; 3. In the first
and second traditional Chinese medicine extraction workshops, a total of 23 drainage devices were
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added to all condensate drainage pipelines with steam heating equipment to realize automatic
drainage and improve the utilization rate of steam. It was expected that approximately 100 tons of
steam could be saved thereby per year; in the first and second traditional Chinese medicine extraction
workshops, the cooling method of purified water circulation system was changed from cooling by
drinking water to cooling by recycled chilled water in order to reduce the consumption of drinking
water. It was expected that the consumption of water could be thereby reduced by approximately
3,000 tons per year; 4. In the first traditional Chinese medicine extraction workshop, the existing n-
butanol recovery SOP was improved and refined and the powder collection amount of Panax
Notoginsenosides-XST was enhanced with an aim to reduce the unit consumption of n-butanol.
Based on a production of 20 batches per year, approximately RMB24,800 could be saved per year.
Carried out low-nitrogen transformation for boilers to reduce nitrogen oxide emissions; reduced
operation costs by combining the operation of refrigeration stations, and discontinued P06 large air
compressor system when P06 workshop stopped production, and supplied individual equipment with
Livzon gas through small air compressors, which could save about 15,000 kWh of electricity and reduce
Pharmaceutical energy consumption; regularly switched on and off the air conditioners in QC, warehouses and other
Factory departments according to their needs, which could save about 700 kWh of electricity per day; further
strengthened the energy-saving management of functional departments, and advocated employees
to turn off the lights during the lunch break, and encouraged them to turn off the lights and shut
down their computers when they leave their seats and the office to save electricity.
The project of recovering waste heat from air compressors as heat source to heat water for
heating in winter was completed and would be put into operation in winter. It was expected that
Ningxia 5,000 tons of steam could be saved thereby; the high-efficiency and energy-saving transformation
Pharmaceutical of fermentation circulating water pump in workshop 103 was completed, saving 1.04 million kWh
of electricity annually; the recycling test of solid waste (slag, sludge) was completed and solid waste
would no longer be landfilled when relevant facilities were put into use.
Collected and reused steam condense to reduce steam consumption, so as to reduce carbon
emissions; changed the packaging equipment to automatic packaging to improve production
efficiency; vigorously promoted energy saving and consumption reduction internally, called on all
employees to “save every drop of water, save every kilowatt of electricity”, and uniformly managed
the paint in the workshop to eliminate waste; installed additional mirrors behind the steam pipeline
Jiaozuo Hecheng drainage valves to observe whether there is steam loss; led the steam condense to the production
auxiliary system of the hot water tank and the crystallization tank to reduce the use of steam; changed
the lighting in the common areas of the workshop, corridors, etc. to sound– or light-controlled
switches and gradually replaced the workshop lighting with LED lights; gradually replaced high
energy consuming equipment and facilities in workshops with low energy consuming or automated
interlocking devices.
Further strengthened the daily energy-saving management according to the established energy-
saving plan, effectively improved the energy-saving awareness of employees through inspection,
publicity and other means, and cultivated good habit of saving water and electricity among
employees; optimized the peptide splicing process, increased the peptide splicing yield by more than
Shanghai Livzon
10%, thus reducing the power consumption per unit of product; transformed the solid preparation
workshop into the powder injection workshop which produces less waste and conserves electricity;
while comfortable air conditioning unit (cooling) utilized the chilled water unit in the power room,
the multi-expansion air conditioning unit was placed outdoors to use air cooling, saving cooling
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capacity and reducing energy consumption. In order to reduce the exhauste mission concentration
and VOCs emissions, double-stage activated carbon was installed to the No. 4 exhaust funnel. After
one more step of treatment, both the exhaust emission concentration and the VOCs emissions could
be reduced. In order to improve the efficiency of pure water production, the pure water equipment
was replaced.
Formulated energy-saving and emission reduction measures in accordance with the ESG targets
of the Company and made reasonable use of recycled wastewater; introduced purchased steam to
reduce steam consumption effectively. Effectively improved the energy-saving awareness of
Livzon MAB employees through inspection, publicity and other means, and cultivated good habit of saving water
and electricity among employees; used LED lights to reduce electricity consumption, and
encouraged employees to turn off lights and computers to save electricity before leaving office. Set
up shuttle buses to transport employees to and from work.
Entrusted a third party to carry out routine monthly maintenance of sewage treatment facilities
to ensure that the wastewater treatment system was functioning properly. The water quality was up
Livzon Diagnostics to standard, and the discharge did not exceed the limit. Formulated an energy management system
to save energy and reduce emissions and strengthened daily energy-saving management to improve
the Company’s performance in energy saving.
II Consolidation and expansion of achievements in poverty alleviation and rural revitalization
√Applicable □N/A
1. Industrial revitalization
The Company guiding principles of the CPC Central Committee and the General Secretary. In accordance
with the relevant requirements, we have established and implemented the plan of “Astragalus Root (黃芪)
Industry Revitalization”. Through adopting the model of “Company + Base” and “Company + Professional
Cooperative”, we are driving local cultivation and processing of Astragalus and developing the astragalus
root industry with reference to the local conditions to make it a pillar industry for poverty relief in the long-
term. The Group will establish a sustainable and pivotal industry that creates wealth, forging a new path for
the development of the distinctive Astragalus industry and promoting the construction of the “Chinese
Medicine Ecological Base”.
“Astragalus Root (黃芪) Industry Revitalization” has been in place since 2017. Datong Livzon Qiyuan
Medicine Co., Ltd. ( 大 同 丽 珠 芪源 有限 公司 ) (“Datong Livzon”), a subsidiary of the Livzon, has
established its own planting bases in Hunyuan County of Datong City in Shanxi Province and Zizhou County
of Yulin City in Shaanxi Province, respectively, and built astragalus root planting bases together with 12
cooperatives and 3 individuals in Tianzhen County of Datong City and Ying County of Shuozhou City in
Shanxi Province and Yulin City of Shaanxi Province. The total area of the self-built bases and jointly
constructed bases is about 33,000 mu and a total of 265 people have been assisted. This program has
effectively boosted the economy of corresponding areas in Shanxi and Shaanxi.
During the Reporting Period, based on the national “rural revitalization strategy”, Datong Livzon launched
the “Joint Construction by Villages and Enterprises” project in cooperation with the village committee of
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Mazhuang Village, Guan’er Town, Hunyuan County, Datong City, Shanxi Province to renovate and
reconstruct the primary processing plant in the origin of astragalus root planting base which has met the
requirements on the primary processing and storage of astragalus root. In addition, Datong Livzon trained
approximately 15 managers and planters of the co-built base in Zizhou County, Yulin City, Shaanxi Province
on the new version of GAP (Good Agricultural Practices), conducted on-site technical guidance and practical
training on the traceability of traditional Chinese medicinal materials. These efforts aimed to assist in the
preliminary land plot planning for achieving traceability of Chinese medicinal materials.
2. Access to public welfare for chronic diseases prevention and treatment
In supporting consolidation and expansion of achievements in poverty alleviation and rural revitalization and
In order to respond positively to the call of national policy, Joincare have launched “Access to Public Welfare
for Chronic Diseases Prevention and Treatment (普惠慢病防治公益项目)” program by combining our own
industrial advantages. The program targets at common chronic diseases such as hypertension, hyperlipidemia,
cardiovascular and cerebrovascular diseases, and treatment drugs have been donated to remote areas,
including Pravastatin Capsules (普伐他汀钠胶囊), Amlodipine Besylate Capsules (苯磺酸氨氯地平胶囊),
Valsartan Capsules (缬沙坦胶囊), and Isosorbide Bononitrate Tablets ( 单硝酸异山梨酯片), which could
be worth millions of RMB. These drugs can really help families in remote areas, make it convenient for
patients in the regions to take drugs nearby, help the families with patients to alleviate medical pressures, and
provide timely assistance. Based on actual conditions, the project regularly makes continuous drug donations
to remote areas and helps the families with patients in such regions. The project also helps to promote local
development of rural revitalization.
Since late 2018 onwards, with the support of local government agencies and relevant authorities at all levels,
we carried out the “Inclusive Chronic Disease Prevention and Control Public Welfare Project” successively
in areas including Chaotian District of Guangyuan City, Songpan County, Jiange County and Pingwu County
of the Autonomous Prefecture of Aba Zangs and Qiangs in Sichuan Province, Hunyuan County, Guangling
County and Lingqiu County of Datong City in Shanxi Province, Dongxiang County, Tianzhu County, Linze
County and Shandan County in Gansu Province, Xianghai national nature reserve in Jilin Province, Chayu
County in Tibet Autonomous Region, Macun District of Jiaozuo City in Henan Province, Huangshan District
of Huangshan City in Anhui Province, Suining County of Hunan Province, and Fenyi County of Jiangxi
Province, bringing benefits to many patients. In recognition of these efforts, the Company was honored with
a number of awards, including the “ESG Practice Excellence Model Award (ESG 践行卓越典范奖)” and
“2022 China Pharmaceutical CSR Media Watch Pioneer Award (2022 中国医药社会责任媒体观察责任先
锋)” for its excellent projects supporting urban revitalization.
As at 30 June 2023, the project covered 8 provinces and 2 autonomous regions, including 19 remote areas
requiring assistance and 2 natural reserves at state level. This initiative has aided over 17,700 low-income
patients. In 2023, there are plans to further donate drugs to additional areas in need.
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Chapter 6 Major Events
I Fulfillment of undertakings
(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the Reporting
Period by the parties to the commitment such as de facto controllers, shareholders, related parties,
acquirers of the Company and the Company
√Applicable □N/A
Specific Next plan
Whether Whether reasons should be
Time and there is a commitment for failure stated in
Commitment Commitment Commitment
Subject time limit of time limit is strictly in timely case of
background type content
commitment for fulfilled in fulfillment failure in
fulfillment time shall be timely
given fulfillment
Settlement Please see 30 April
of horizontal Baiyeyuan Note 1 for 2001, long- No Yes - -
competition details term
Baiyeyuan,
Commitment de facto
related to controllers
initial public Settlement and Please see 10 January
offering of horizon persons Note 2 for 2014, long- No Yes - -
competition acting-in details term
concert,
and the
Company
From 8
March 2016
to the date
of
The completion
Company Please see of remedial
Others and de Note 3 for measures in Yes Yes - -
facto details connection
controllers with the
non-public
offering of
Livzon
Group
From 11
May 2017
Commitment
to the date
related to
of
seasoned Baiyeyuan
Please see completion
offerings and the de
Others Note 4 for of remedial Yes Yes - -
facto
details measures in
controller
connection
with rights
issue of
Joincare
From the
date of
proceeds for
Please see issuance of
The
Others Note 5 for the Rights No Yes - -
Company
details issue in
place to the
date of
completion
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
of use of
proceeds
Other
commitments
17
made to the Please see
The December
minority Others Note 6 for No Yes - -
Company 2008, long-
shareholders details
term
of the
company
Note 1: Shenzhen Baiyeyuan Investment Co., Ltd., the controlling shareholder of the Company, undertook that it would not be
directly or indirectly engaged in or cause subsidiaries and branches under its control to be engaged in any business or activity
constituting horizontal competition with the Company after the founding of the Company, including but not limited to the
research, production and sales of any products that were the same as or similar to products under research, production and sales
of the Company, and was willing to undertake compensation responsibility for economic losses to the Company arising from
violation of the said commitment.
Note 2: Whereas the domestically listed foreign shares of Livzon Group, a controlled subsidiary of the Company, sought listing
on the Main Board of the Stock Exchange of Hong Kong Limited, in order to fully ensure smooth completion of the said event
and in compliance with relevant requirements of the Stock Exchange of Hong Kong Limited, the controlling shareholders, de
facto controller of the Company and the Company entered into relevant undertakings with Livzon Group as follows: 1. The
controlling shareholders, de facto controller and persons acting-in-concert of the Company, the Company and its controlled
subsidiaries except for Livzon Group did not or would not be, directly or indirectly, engaged in any business that constituted
competitive relation or potential competitive relation with drug research, development, production and sale businesses
(“Restricted Businesses”) of Livzon Group from time to time. For the avoidance of doubt, the scope of Restricted Businesses
did not cover products that were researched, developed, manufactured and sold on the date of relevant letter of undertaking by
the controlling shareholders and de facto controller of the Company, the Company and its controlled subsidiaries except for
Livzon Group; 2. If any new business opportunity was found to constitute competitive relation with Restricted Businesses, the
controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and its controlling
subsidiaries except for Livzon Group would inform Livzon Group in written form immediately and firstly provide Livzon
Group with the business opportunity in accordance with reasonable and fair terms and conditions. If Livzon Group gave up the
business opportunity, the controlling shareholders and de facto controllers of the Company, the Company and its controlled
subsidiaries except for Livzon Group may accept the business opportunity in accordance with the terms and conditions that
were not superior to those offered to Livzon Group; 3. If assets and businesses that directly or indirectly constituted competitive
relation and potential competitive relation with Restricted Businesses were intended to be transferred, sold, leased, licensed to
use or otherwise transferred or allowed to use (these Sales and Transfers), the controlling shareholders and de facto controllers
of the Company, the Company and its controlled subsidiaries except for Livzon Group would provide the right of first refusal
for Livzon Group under the same condition. If Livzon Group gave up the right of first refusal, the controlling shareholders, de
facto controllers and persons acting-in-concert of the Company, the Company and its controlled subsidiaries except for Livzon
Group would carry out these Sales and Transfers to a third party in accordance with main terms that were not superior to those
offered to Livzon Group; 4. The controlling shareholders, de facto controllers and persons acting-in-concert of the Company,
the Company and its controlled subsidiaries except for Livzon Group would not be engaged in or involved in any business that
might damage the interests of Livzon Group and other shareholders through the relation with shareholders of Livzon Group or
the identity of shareholders of Livzon Group; 5. The controlling shareholders, de facto controllers and persons acting-in-concert
of the Company, the Company and its controlled subsidiaries except for Livzon Group would not or cause its contact persons
(except for Livzon Group) to directly or indirectly: (1) induce or attempt to induce any director, senior management or
consultant of any member of Livzon Group to terminate his/her employment with or to be an employee or consultant of Livzon
Group at any time (whichever is applicable), no matter if relevant acts of the person were against the Employment Contract or
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consultancy Agreement (if applicable); (2) Within three years after any person terminated to be the director, senior
management or consultant of any member of Livzon Group, employ the person who had or might have any confidentiality
information or business secret in relation to Restricted Businesses (except for the director, senior management or consultant of
the Company and/or its controlling subsidiaries except for Livzon Group on the date of issuance of relevant letter of
undertaking); (3) Recruit or lobby any person carrying out business in any member of Livzon Group, accept orders, or carry
out business separately, through any other person or as any person, firm, or manager, advisor, consultant, employee, agent or
shareholder of any company (competitor of any member of Livzon Group), or lobby or persuade the person making transaction
with Livzon Group or negotiating with Livzon Group on Restricted Businesses to terminate its transaction with Livzon Group
or reduce its normal business volume with Livzon Group, or ask for more favorable transaction terms to any member of Livzon
Group. 6. The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and
its controlled subsidiaries except for Livzon Group further undertook that: (1) They would allow and cause relevant contact
persons (except for Livzon Group) to allow independent directors of Livzon Group to review if the Company and its controlled
subsidiaries except for Livzon Group obeyed the Letter of Undertaking at least once a year; (2) They would provide all the data
required for annual review and implementation of the Letter of Undertaking for independent directors of Livzon Group; (3)
They would allow Livzon Group to disclose the decision on whether the controlling shareholders and de facto controllers of
the Company, the Company and its controlled subsidiaries except for Livzon Group obeyed and implemented the Letter of
Undertaking reviewed by independent directors of Livzon Group through the annual report or announcement; (4) The
controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company (and its controlled
subsidiaries except for Livzon Group) would provide Livzon Group with the Letter of Confirmation in relation to compliance
with clauses of the Letter of Undertaking every year so as to be included in the annual report of Livzon Group. 7. The controlling
shareholders, de facto controllers and persons acting-in-concert of the Company, and the Company promise that they would
bear corresponding legal responsibility and consequence arising from violation of any clause by the Company (or the
Company's controlled subsidiaries except for Livzon Group or its contact persons), starting from the date of issuance of relevant
letter of undertaking. 8. The said undertakings would terminate in case of the following circumstances (whichever is earlier):
(1) The controlling shareholders, de facto controllers and persons acting-in-concert of the Company, the Company and any of
its controlled subsidiaries were not the controlling shareholders of Livzon Group anymore; (2) Livzon Group terminated the
listing of its shares on the Hong Kong Stock Exchange and other overseas stock exchanges (except that shares of Livzon Group
stopped to be traded temporarily for any reason).
Note 3: Do not interfere in the operation and management activities of Livzon Group or encroach on the interests of Livzon
Group.
Note 4: Pursuant to the Guiding Opinions on Matters Relating to the Dilution of Current Returns as a Result of Initial Public
Offering, Refinancing and Major Asset Restructuring (Announcement of CSRC [2015] No. 31), the company shall undertake
to adopt specific remedial measures relating to dilution of current returns as a result of the company's initial public offering,
refinancing of the listed company, or major asset restructuring and shall fulfill such undertaking. Pursuant to relevant provisions
of CSRC, Zhu Baoguo, the de facto controller of Shenzhen Baiyeyuan Investment Co., Ltd., a controlling shareholder:1. Do
not intervene in the operation and management activities or encroach on the interests of the company; 2. If CSRC issued other
new regulatory provisions on the remedial measures in relation to returns and the relevant undertakings and the aforesaid
undertakings did not conform to such provisions from the date of issuance of the undertaking to the completion of IPO share
allotment, the Company/the de facto controller would undertake to issue a supplemental undertaking in accordance with the
latest provisions of CSRC; 3. The Company/the de facto controller undertook to practically take the remedial measures in
relation to returns formulated by the company and fulfill the undertaking concerning the remedial measures. In case of violation
of the undertaking, causing losses to the company or investors, the Company/the de facto controller was willing to assume
compensation responsibilities to the company or investors in accordance with law. In case of violation of the said undertakings
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
or rejection to fulfill the said undertakings, as one of the liability subjects relating to the remedial measures concerning returns,
it was agreed that relevant punishment shall be imposed on or relevant management measures shall be taken against the
Company/the de facto controller by CSRC, the SSE and other securities regulators in accordance with relevant provisions and
rules set or issued by them.
Note 5: After the proceeds for issuance of allotment were in place, the Company would use them according to the disclosure
in the announcement, and carry out the policies, including deposit in special account, approval by specially-assigned person,
and special use of special funds in accordance with management measures for proceeds of the Company. The Board of the
Company would regularly check the progress of projects invested with proceeds, issue a special report on deposit and use of
proceeds, engage an accounting firm during the annual audit to issue a verification report on deposit and use of proceeds, would
be supervised by regulators and sponsors at any time, and would not make major investment, asset purchase or similar financial
investment though proceeds in disguise.
Note 6: (1) While transferring tradable shares subject to selling restrictions held by the company in Livzon Group, the company
shall strictly obey relevant provisions of Guidelines of Listed Companies on Transfer of Stock Shares Subject to Selling
Restrictions ([2008] No. 15); (2) If the Company had shares subject to selling restrictions held by it in Livzon Group that were
planned to be sold through the bid trading system of Shenzhen Stock Exchange and reduced more than 5% shares within six
months from the first share reduction, the Company would pass the Announcement on Sales disclosed by Livzon Group within
two trading days before the first share reduction.
II Non-operating use of funds by the controlling shareholder and their related parties during
the reporting period
□Applicable √N/A
III Information on Illegal guarantees
□Applicable √N/A
IV Audit of interim report
□Applicable √N/A
V Information on changes and handling of matters related to non-standard audit opinions in
the annual report for the previous year
□Applicable √N/A
VI Matters related to bankruptcy reorganization
□Applicable √N/A
VII Material Litigation and Arbitration Matters
□During the Reporting Period, the Company had material litigation and arbitration matters.
√ During the Reporting Period, the Company did not have any material litigation or arbitration matters.
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
VIII Information on punishment and rectification of the listed company and its directors,
supervisors, senior management, controlling shareholders, and de facto controllers due to
violations of laws and regulations
□Applicable √N/A
IX Integrity of the Company and its controlling shareholders and de facto controllers during
the Reporting Period
□Applicable √N/A
X Substantial related transactions
(I) Related transactions in the ordinary course of business
1. Provisional Announcements without progress or change in subsequent implementation
√Applicable □N/A
Overview Query index
Pursuant to the “Resolution on Related Transactions in the Ordinary
Course of Business of the Controlling Subsidiaries of Jiaozuo Joincare See the “Announcement on Resolutions
and Jinguan Electric Power” considered and approved at the 23rd Considered and Approved at the 23th Meeting
Meeting of the 8th Session of the Board on 7 April 2023, Jiaozuo of the 8th Session of the Board of Joincare
Joincare intended to purchase no more than RMB280 million Pharmaceutical Group Industry Co., Ltd.” (Lin
(inclusive) of steam and power from Jinguan Electric Power in 2023 2023-030) and the “Announcement of Joincare
so as to satisfy the demands of Jiaozuo Joincare for steam and power Pharmaceutical Group Industry Co., Ltd. on
in the process of production and operation. The independent directors the Connected Transactions in the Ordinary
of the Company gave prior approval opinions on the Resolution and Course of Business of the Majority-owned
gave opinions on the approval at the Board meeting. Both parties Subsidiaries of Jiaozuo Joincare and Jinguan
referred to the market price to fix a price of the said related Electric Power” (Lin 2023-036) disclosed by
transactions. During the Reporting Period, the actual amount of the the Company on 11 April 2023 for details.
said related transactions was RMB127.9266 million.
2. Matters that have been disclosed in the provisional announcements with progress or change
in subsequent implementation
□Applicable √N/A
3. Matters that have not been disclosed in the provisional announcements
□Applicable √N/A
(II) Related transactions relating to assets or equity acquisition and sale
1. Provisional announcements without progress or change in subsequent implementation
□Applicable √N/A
2. Matters that have been disclosed in the provisional announcements with progress or change
in subsequent implementation
□Applicable √N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
3. Matters that have not been disclosed in the provisional announcements
□Applicable √N/A
4. In case of performance agreement, information on performance realization during the
Reporting Period shall be disclosed
□Applicable √N/A
(III) Substantial related transactions of joint outbound investment
1. Provisional announcements without progress or change in subsequent implementation
□Applicable √N/A
2. Matters that have been disclosed in the provisional announcements with progress or change
in subsequent implementation
□Applicable √N/A
3. Matters that have not been disclosed in the Provisional Announcements
□Applicable √N/A
(IV) Credits and debts with related parties
1. Provisional announcements without progress or change in subsequent implementation
□Applicable √N/A
2. Matters that have been disclosed in the provisional announcements with progress or change
in subsequent implementation
□Applicable √N/A
3. Matters that have not been disclosed in the provisional announcements
√Applicable □N/A
Unit：Yuan Currency：RMB
Offer funds to related parties Receive funds from related parties
Relationship with Balance at the Amount incurred Balance at the Amount
Related par ty Balance at the Balance at the end
related party beginning of the in the current beginning of incurred in the
end of the period of the period
period period the period current period
Jiaozuo Jinguan Jiahua
Electric Power Co., Ltd. Associated
75,724,913.57 -8,480,203.79 67,244,709.78
(焦作金冠嘉华电力有限 company
公司)
Guangdong Blue Treasure
Pharmaceutical Co., Ltd. Others 9,282,804.29 7,641,565.47 16,924,369.76 117,760.00 1,825,280.00 1,943,040.00
(广东蓝宝制药有限公司)
Jiangsu One Winner
Medical Technology Co.,
Others 0.00 670,000.00 670,000.00
Ltd. (江苏一赢家医疗科
技有限公司)
Subsidiaries of Sichuan
Healthy Deer Hospital
Management Co., Ltd. (四 Others 497,828.30 -4,410.00 493,418.30 20,947.89 83,329.36 104,277.25
川健康阿鹿医院管理有限
公司之子公司)
Shenzhen Youbao
Technology Co., Ltd. (深圳 Others 188,100.00 141,578.00 329,678.00
市有宝科技有限公司)
Zhongshan Renhe Health
Products Co., Ltd. (中山市 Others 469,895.78 0.00 469,895.78
仁和保健品有限公司)
Zhuhai Sanmed Biotech Others 211,200.00 0.00 211,200.00
90 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Inc. (珠海圣美生物诊断技
术有限公司)
Zhuhai Sanmed Gene
Diagnostics Ltd. (珠海市圣
Others 101,526.98 134.20 101,661.18
美基因检测科技有限公
司)
Shenzhen Health Deer
Technology Co., Ltd. (深圳
Others 4,680.00 -4,680.00 0.00
市健康阿鹿信息科技有限
公司)
Total 86,480,948.92 -36,016.12 86,444,932.80 138,707.89 1,908,609.36 2,047,317.25
Reason for occurrence of credits and debts with
During the Reporting Period, the Company had regular operating fund transactions with related parties
related parties
Effect of credits and debts with related parties
The said credits and debts with related parties mentioned above are operating fund transactions; there was no
on the operating results and financial position of
non-operating use of funds of the Company by shareholders and related parties
the Company
(V) Financial businesses among the Company, related financial companies, financial companies
controlled by the Company, and related parties
□Applicable √N/A
(VI) Other substantial related transactions
□Applicable √N/A
(VII) Others
□Applicable √N/A
XI Material contracts and their fulfilments
1. Custodianship, contracting and leasing
□Applicable √N/A
2. Major guarantees that have been performed and outstanding during the Reporting Period
√Applicable □N/A
Unit： 10,000 Yuan Currency： RMB
External guarantees of the Company (excluding guarantees to its subsidiaries)
Relationship Guarante
Date of Whether
between the ed for a
Secured Amount of guarantee (date Guarantee Start Guarantee Guarantee Fulfilled Overdue Overdue there's a
Guarantor Guarantor and related Relationship
party guarantee of signature of date Maturity date type or not or not amount counter-
the listed party or
agreement) guarantee
company not
Headquarter Jinguan Joint
Associated
Joincare of the Electric 4,000.00 2022/7/11 2022/7/11 2023/7/11 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 3,000.00 2022/7/11 2022/7/11 2023/7/11 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 2,000.00 2022/7/15 2022/7/15 2023/7/15 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 3,000.00 2022/8/8 2022/8/8 2023/8/8 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 3,200.00 2022/9/16 2022/9/16 2023/9/16 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 3,800.00 2022/10/9 2022/10/9 2023/10/9 liability No No 0 Yes Yes
company
Company Power guarantee
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Headquarter Jinguan Joint
Associated
Joincare of the Electric 3,200.00 2022/10/12 2022/10/12 2023/10/12 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 2,045.01 2023/6/12 2023/6/12 2023/10/13 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 3,000.00 2022/11/24 2022/11/24 2023/11/24 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 2,183.85 2023/6/12 2023/6/12 2023/12/12 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 2,000.00 2023/6/16 2023/6/16 2023/12/12 liability No No 0 Yes Yes
company
Company Power guarantee
Headquarter Jinguan Joint
Associated
Joincare of the Electric 4,640.00 2022/12/19 2022/12/19 2023/12/16 liability No No 0 Yes Yes
company
Company Power guarantee
Wholly- Jinguan Joint
Jiaozuo Associated
owned Electric 2,000.00 2022/12/14 2022/12/14 2023/12/14 liability No No 0 Yes Yes
Joincare company
subsidiary Power guarantee
Total guaranteed amount occurred during the Reporting Period (excluding guarantees to subsidiaries) 6,228.86
Total guaranteed amount as of the end of the Reporting Period (A) (excluding guarantees to
38,068.86
subsidiaries)
Guarantee provided by the Company and its subsidiaries to subsidiaries
Total amount of guarantees to subsidiaries during the Reporting Period 133,364.31
Total amount of guarantees to subsidiaries as of the end of the Reporting Period (B) 306,780.16
Total guaranteed amount of the Company (including guarantees to subsidiaries)
Total guaranteed amount (A+B) 344,849.02
Percentage of total guaranteed amount in the Company's net assets (%) 15.84
In which:
Amount of guarantees provided to shareholders, de facto controllers and their related parties (C) 0.00
Amount of debt guarantee directly or indirectly provided to a guaranteed party with a liability-to-
192,093.20
asset ratio exceeding 70% (D)
Portion of total guaranteed amount exceeding 50% of net assets (E) 0.00
Total guaranteed amount of the above three items (C+D+E) 192,093.20
Statement on the contingent joint liability that might be assumed in connection with outstanding
N/A
guarantee
The above connected guarantees are detailed in Note X 5(4) to the Financial
Statement on guarantees
Statements of this report.
3. Other material contracts
□Applicable √N/A
XII Explanation of other significant events
√Applicable □N/A
1. Use of proceeds
Pursuant to the Reply to the Approval of Share Allotment of Joincare Pharmaceutical Group Industry
Co., Ltd. issued by CSRC (Zheng Jian Xu Ke [2018] No. 1284), the Company allotted 365,105,066
shares to original shareholders. The planned proceeds from the share allotment amounted to RMB2,000
million; the total actual proceeds amounted to RMB1,715.9938 million; after deducting distribution
expenses of RMB46.2536 million, the net proceeds amounted to RMB1,669.7402 million. As at 16
October 2018, the said proceeds were in place and validated by the Capital Verification Report of
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Joincare Pharmaceutical Group Industry Co., Ltd. issued by Ruihua Certified Public Accountants (Rui
Hua Yan Zi [2018] No. 40060006).
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceeds
considered and approved at the 21st Meeting of the 8th Session of the Board and the 18th Meeting of
the 8th Session of the Supervisory Committee of the Company on 29 December 2022, it was agreed that
the Company temporarily replenished the working capital with no more than RMB500 million of idle
proceeds from 1 January 2023 to 31 December 2023 so as to improve the use efficiency of proceeds and
reduce financial expenses of the Company. For details, please refer to the “Announcement on the
Temporary Replenishment of Working Capital with Certain Idle Proceeds of Joincare Pharmaceutical
Group Industry Co., Ltd.” (Lin 2022-146).
For details about deposit and actual use of proceeds in the first half of 2023, please refer to the Special
Report of Joincare Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Utilization of
Proceeds for first half of 2023 disclosed by the Company on 24 August 2023.
2. Matters about share cancellation and share repurchase
(1) Share Cancellation
On 10 February 2020, the Company held the twenty-first meeting of the seventh session of the Board of
Directors, at which it considered and approved proposals including the Proposal for the Repurchase of
Shares through Centralized Price Bidding; and on 14 February 2020, the Company disclosed the Report
on the Repurchase of Shares through Centralized Price Bidding. The Company planned to repurchase
the shares of the Company with its own funds through centralized price bidding with the total fund of
not less than RMB150 million (inclusive) and not more than RMB300 million (inclusive). The share
repurchase price was not more than RMB15 per share (inclusive), and the repurchase period was set as
not more than 12 months from the date on which repurchase plan was considered and approved by the
Board of Directors. The repurchased shares shall be used for employee stock ownership plans and share
incentive plans, with 40% of the repurchased shares allocated to employee stock ownership plans and
60% allocated to share incentive plans.
The implementation of the share repurchase plan had been completed by the Company on 12 July 2020,
and 19,890,613 shares of the Company, accounting for 1.02% of the total share capital (1,947,537,633
shares) of the Company at that time, were repurchased through centralized price bidding. Pursuant to
the arrangement for use of repurchased shares mentioned above, on 4 August 2021, the Company
transferred 2,430,800 shares previously repurchased and held in special securities account for
repurchases to the account of the Company for first phase ownership scheme by non-trading transfer.
As of now, the number of shares previously repurchased and held in special securities account for
repurchases is 17,459,813.
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Pursuant to the relevant requirements of the Company Law (《公司法》), the Self-regulatory Guidelines
for the Companies Listed on the Shanghai Stock Exchange No. 7–Repurchase of Shares (《上海证券
交易所上市公司自律监管指引第 7 号—回购股份》) and share repurchase plan of the Company, the
shares were repurchased for employee stock ownership plans and share incentives, and if the
repurchased shares are not fully utilized by the Company within 36 months after the completion of the
share repurchase, the unutilized shares repurchased shall be cancelled.
The twenty-fifth meeting of the eighth session of the Board of Directors and the first extraordinary
general meeting of 2023 were convened by the Company on 28 April 2023 and 19 May 2023,
respectively, at which the Resolution on the Cancellation of Treasury Shares Previously Repurchased
was considered and approved. As the three-year term for the share repurchase conducted by the
Company in 2020 will expire soon and the Company has no plan to use remaining shares held in special
securities account for repurchases for share incentive plans or employee stock ownership plans in the
near future, it was agreed that the Company should cancel the remaining 17,459,813 shares previously
repurchased and held in special securities account for repurchases.
On 4 July 2023, the aforesaid remaining shares and the special securities account for repurchase were
cancelled by the Shanghai Branch of China Securities Depository and Clearing Company Limited. Upon
the completion of the share cancellation, the total share capital of the Company changed from
1,929,189,374 shares to 1,911,729,561 shares.
(2) Share Repurchase
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Bidding Transactions
and other resolutions considered and approved at the 17th Meeting of the 8th Session of the Board and
the 2022 Fourth Extraordinary General Meeting of the Company on 14 October 2022 and 18 November
2021, it was approved that the Company repurchased company shares by way of centralized bidding
transactions with its own funds, and the repurchased shares will be used to reduce the registered capital;
the total amount of repurchase funds should be no less than RMB300 million (inclusive) and no more
than RMB600 million (inclusive); the repurchase price should be no more than RMB16/share (inclusive);
the repurchase term should be from 18 November 2022 to 17 November 2023. For details, please refer
to the “Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Share Repurchase
Scheme by Way of Centralized Bidding Transactions” (Lin 2022- 121) and the “Repurchase Report of
Joincare Pharmaceutical Group Industry Co., Ltd. on Share Repurchase by Way of Centralized Bidding
Transactions” (Lin 2022-137).
On 14 December 2022, the Company initially repurchased 348,400 shares by way of centralized bidding
transactions, representing 0.02% of the total share capital of the Company. For details, please refer to
the “Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on Initial Share Repurchase
by Way of Centralized Bidding Transactions” (Lin 2022-144).
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As of 30 June 2023, the Company has repurchased a total number of 40,662,579 shares by way of
centralized bidding transactions, representing 2.11% of the total share capital of the Company. The total
amount paid was RMB494.4911 million (including handling fee). For details, please refer to the
Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the Progress of Share
Repurchase by Way of Centralized Bidding Transactions (Lin 2023-065). As of 14 August 2023, the
Company has repurchased a total number of 45,957,211 shares by way of centralized bidding
transactions, representing 2.40% of the total share capital of the Company. The total amount paid was
RMB557.9157 million (including handling fee). For details, please refer to the Announcement of
Joincare Pharmaceutical Group Industry Co., Ltd. on the Progress of Share Repurchase by Way of
Centralized Bidding Transactions (Lin 2023-080).
3. GDRs of the Company issued and listed on the SIX Swiss Exchange
On 26 September 2022, the Company’s GDRs were listed on the SIX Swiss Exchange in an offering of
6,382,500 GDRs representing 63,825,000 underlying A shares, representing 3.31% of the Company’s
total share capital at that time, at an issue price of USD$14.42 per GDR, with the final gross proceeds
of approximately USD$92.04 million.
The lock-up restriction period for the redemption of the GDRs issued by the Company is from 26
September 2022 (Swiss time) to 23 January 2023 (Swiss time). As 23 January 2023 falls in the Chinese
New Year holiday, the transfer and settlement of A shares in relation to the cross-border conversion of
GDRs cannot proceed during the period from 23 January to 27 January 2023. In accordance with the
relevant regulations on stock connect, the GDRs with the expiry of the lock-up restriction period for the
redemption can be converted into A shares of the Company from 30 January 2023 (Beijing time). As of
the closing of the Shanghai Stock Exchange on 30 January 2023, the number of A shares of the Company
represented by the outstanding GDRs was less than 50% of the number of underlying A shares
represented by the GDRs actually issued by the Company as approved by the CSRC.
The proceeds from the Company’s issuance of GDRs, after deducting the issuance fees, are intended for
the business development and strategic investments of the Company, aimed at improving the Company's
capabilities of global research and development, industrialization and commercialization, thus further
deepening the international business presence and replenishing the working capitals of the Company.
For details about deposit and actual use of GDR proceeds in the first half of 2023, please refer to the
Special Report of Joincare Pharmaceutical Group Industry Co., Ltd. on Deposit and Actual Utilization
of Proceeds for first half of 2023 disclosed by the Company on 24 August 2023.
4. Overall relocation and expansion project of Sichuan Guangda
On 6 March 2019, after review and approval by the Board of the Livzon Group, the controlling
subsidiary of the Company, considered and approved that Livzon Group entered into the Investment
Agreement for the “Overall Relocation and Expansion Project of Sichuan Guangda Pharmaceutical
Manufacturing”(《四川光大制药整体搬迁调迁扩建项目投资协议书》 (the “Investment Agreement”)
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and the “Supplemental Agreement I with Sichuan Chengdu Pengzhou Municipal People's
Government”(四川省成都市彭州市人民政府). Pursuant to the Investment Agreement, the Livzon
Group will inject capital of RMB646 million for investment in construction of the overall relocation and
expansion project (the “Project”) of Sichuan Guangda, a wholly-owned subsidiary of the Company.
Pursuant to the Supplemental Agreement I, Pengzhou Municipal People's Government has agreed to
pay a compensation for demolition of RMB90 million and grant total incentive of not more than
RMB125.8 million for the construction of new plantsto the Company.
As at 30 June 2023, the total investment of the specific contracts entered into for the Project amounted
to RMB548.5066 million, and the sum of subsidies received from government authorities at various
levels amounted to RMB174.4317million, the construction works for all production plants and
supporting production facilities were completed, and the construction works for the office buildings,
dormitories and canteens were completed. The new plant of Sichuan Guangda was officially put into
operation on 12 July 2023.
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Chapter 7 Changes in Equity and Shareholders
I Changes in share capital
(I) Changes in shares
1. Changes in shares
During the Reporting Period, there was no change in the total number of shares and share capital
structure of the Company.
2. Description of changes in shares
□ Applicable √N/A
3. Impact of changes in shares on earnings per share, net assets per share and other financial
indicators from the Reporting Period to the date of disclosure of the interim report (if any)
□ Applicable √N/A
4. Other information deemed necessary by the Company or as required by the securities regulators
□ Applicable √N/A
(II) Changes in shares with selling restrictions
□ Applicable √N/A
II Shareholders
(I) Total number of shareholders:
Total number of ordinary shareholders at the end of the Reporting Period 80,960
Total number of shareholders of preferred shares with resumed voting rights at the
Not applicable
end of the Reporting Period
(II) Shareholdings of the Top 10 shareholders and the Top 10 shareholders of tradable shares (or
shareholders without selling restrictions) at the End of the Reporting Period
Unit: shares
Shareholdings of the Top 10 shareholders
Number of Pledge, mark or lock-
Number of
Name of shares up
Change during the shares held Percentage Nature of
shareholder held with
reporting period at the end of (%) Share Shareholder
(Full name) selling Number
the Period status
restrictions
Shenzhen Domestic
Baiyeyuan non-state
17,380,900 895,653,653 46.43 0 Pledge 75,679,725
Investment owned
Co., Ltd. entity
Hong Kong 0
Securities
Clearing -23,328,015 89,928,152 4.66 Unknown Unknown
Company
Limited
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Might Seasons 0 Foreign
-16,001,259 41,486,175 2.15 Unknown
Limited entity
Huaxia Life 0
Insurance Co.,
2,578,400 11,854,118 0.61 Unknown Unknown
Ltd.－Equity
fund
Perseverance
Asset
Management
10,840,000 11,800,000 0.61 0 Unknown Unknown
L.L.P–Gaoyi
Xiaofeng No.
2 Zhixin Fund
China Foreign
Economy and
Trade Trust
Co., Ltd.–
Foreign
TRUST–Gaoyi 10,799,948 11,759,948 0.61 0 Unknown Unknown
Xiaofeng
Hongyuan
Collection
Fund Trust
Plan
Bank of
Shanghai Co.,
Ltd.－Yinhua
CSI Innovative
Drug Industry
5,294,500 8,972,896 0.47 0 Unknown Unknown
Trading Open-
end Index
Securities
Investment
Fund
Abu Dhabi
Investment 2,207,629 8,127,971 0.42 0 Unknown Unknown
Authority
108 portfolio
of national
6,446,000 7,803,721 0.40 0 Unknown Unknown
social security
fund
Domestic
He Zhong 0 7,800,024 0.40 0 Unknown natural
person
Shareholdings of the Top 10 shareholders without selling restrictions
Number of tradable shares held Class and number of shares
Name of shareholder
without selling restrictions Class Number
Ordinary shares
Shenzhen Baiyeyuan Investment
895,653,653 denominated in 895,653,653
Co., Ltd. *
Renminbi
Ordinary shares
Hong Kong Securities Clearing
89,928,152 denominated in 89,928,152
Company Limited
Renminbi
Ordinary shares
Might Seasons Limited 41,486,175 denominated in 41,486,175
Renminbi
Ordinary shares
Huaxia Life Insurance Co., Ltd.－
11,854,118 denominated in 11,854,118
Equity fund Renminbi
Perseverance Asset Management Ordinary shares
L.L.P–Gaoyi Xiaofeng No. 2 Zhixin 11,800,000 denominated in 11,800,000
Fund Renminbi
China Foreign Economy and Trade
Ordinary shares
Trust Co., Ltd.–Foreign TRUST–
11,759,948 denominated in 11,759,948
Gaoyi Xiaofeng Hongyuan
Renminbi
Collection Fund Trust Plan
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Bank of Shanghai Co., Ltd.－
Ordinary shares
Yinhua CSI Innovative Drug
8,972,896 denominated in 8,972,896
Industry Trading Open-end Index Renminbi
Securities Investment Fund
Ordinary shares
Abu Dhabi Investment Authority 8,127,971 denominated in 8,127,971
Renminbi
Ordinary shares
108 portfolio of national social
7,803,721 denominated in 7,803,721
security fund
Renminbi
Ordinary shares
He Zhong 7,800,024 denominated in 7,800,024
Renminbi
Notes on the special repurchase As at the end of the Reporting Period, the special repurchase account of the
account among the top 10 Company (special securities repurchase account of Joincare Pharmaceutical Group
shareholders Industry Co., Ltd.) owned 58,122,392 shares in total, accounting for 3.01%.
Description of the above
shareholders involved in
Not applicable
entrustment/entrusted voting right
and waiver of voting right
There was no connection or acting-in-concert relationship between Shenzhen
Description of connection or acting-
Baiyeyuan Investment Co., Ltd., a controlling shareholder of the Company, and
in-concert relationship of the above
other shareholders; whether there is connection or acting-in-concert relationship
shareholders
among other shareholders is unknown
Description of holders of preferred
shares with resumed voting rights Not applicable
and number of preferred shares
Note: As of the end of the Reporting Period, 17,380,900 shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百
业源投资有限公司), a controlling shareholder of the Company, by participating in the refinancing business were matured and
collected in full, and the ownership transfer of such shares did not take place.
Number of shares held by the Top 10 shareholders with selling restrictions and selling restrictions
□ Applicable √N/A
(III) Strategic investors or general legal persons who became Top 10 shareholders through placement
of new shares
□ Applicable √N/A
III Information on directors, supervisors, and senior management
(I) Changes in shareholdings of current directors, supervisors, and senior management and those who
resigned during the Reporting Period
□ Applicable √N/A
Description of other information
□ Applicable √N/A
(II) Equity incentive granted to directors, supervisors, and senior management during the Reporting
Period
□ Applicable √N/A
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(III) Others
□ Applicable √N/A
IV Changes in controlling shareholders or de facto controllers
□ Applicable √N/A
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Chapter 8 Information on Preferred Shares
□ Applicable √N/A
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Chapter 9 Information on Bonds
I Enterprise bonds, corporate bonds, and non-financial enterprise debt financing instruments
□ Applicable √N/A
II Information on convertible corporate bonds
□ Applicable √N/A
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Chapter 10 Financial statements
I. Auditor's report
□Applicable √N/A
II. Financial statements
Consolidated Balance Sheet
30 June 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note 30 June 2023 31 December 2022
Current assets:
Cash and bank balances V.1 14,459,790,383.84 14,808,488,110.96
Financial assets held for trading V.2 90,560,120.03 109,015,664.98
Notes receivable V.3 2,170,075,201.62 1,959,985,016.85
Accounts receivable V.4 3,193,959,089.23 3,103,758,850.15
Receivables financing
Prepayments V.5 365,293,699.87 364,265,142.57
Other receivables V.6 105,444,746.96 52,535,740.14
Including: Interests receivables
Dividends receivables 40,304,700.46
Inventories V.7 2,850,415,298.45 2,561,869,999.57
Contract assets
Assets held-for-sale
Non-current assets due within one year V.8 55,066,666.67 54,048,611.11
Other current assets V.9 179,667,019.96 163,539,900.32
Total current assets 23,470,272,226.63 23,177,507,036.65
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment V.10 1,430,177,915.97 1,419,882,594.59
Other equity instrument investments V.11 1,192,927,634.58 1,193,958,879.05
Other non-current financial assets
Investment properties V.12 6,191,475.43 6,191,475.43
Fixed assets V.13 5,203,199,498.59 5,265,200,110.91
Construction in progress V.14 942,008,555.30 811,300,068.96
Productive biological assets
Oil & gas assets
Right-of-use assets V.15 40,253,482.25 41,843,133.97
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Intangible assets V.16 747,107,448.45 802,115,125.75
Development cost V.17 428,365,307.98 428,284,884.17
Goodwill V.18 636,339,503.82 614,468,698.73
Long-term prepaid expenses V.19 283,004,625.91 277,867,716.95
Deferred tax assets V.20 523,128,551.94 533,861,743.26
Other non-current assets V.21 1,338,462,703.49 1,156,772,182.99
Total non-current assets 12,771,166,703.71 12,551,746,614.76
Total assets 36,241,438,930.34 35,729,253,651.41
Current liabilities:
Short-term loans V.22 2,126,000,000.00 2,126,050,615.06
Financial liabilities held for trading V.23 21,644,248.86 755,634.43
Notes payable V.24 1,729,003,530.95 1,635,906,989.22
Accounts payable V.25 824,340,189.33 943,905,580.91
Receipts in advance
Contract liabilities V.26 92,547,832.12 292,977,730.74
Employee benefits payable V.27 429,497,292.92 573,010,571.46
Taxes payable V.28 291,260,187.96 337,702,273.73
Other payables V.29 4,070,004,397.43 3,680,334,360.88
Including: Interests payables
Dividends payables 439,505,017.15 12,252,074.84
Liabilities held-for-sale
Non-current liabilities due within one year V.30 62,798,499.68 63,077,260.98
Other current liabilities V.31 89,741,502.82 101,276,714.35
Total current liabilities 9,736,837,682.07 9,754,997,731.76
Non-current liabilities:
Long-term loans V.32 3,963,263,438.94 3,230,844,042.88
Bonds payable
Lease liabilities V.33 17,678,294.69 23,482,486.07
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income V.34 426,374,081.37 384,537,267.55
Deferred tax liabilities V.20 240,208,214.99 231,164,425.48
Other non-current liabilities V.35 90,000,000.00 84,000,000.00
Total non-current liabilities 4,737,524,029.99 3,954,028,221.98
Total liabilities 14,474,361,712.06 13,709,025,953.74
shareholders' equity
Share capital V.36 1,929,189,374.00 1,929,189,374.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve V.37 2,314,216,904.87 2,343,693,215.99
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Less: Treasury shares V.38 717,135,581.08 347,176,561.29
Other comprehensive income V.39 35,886,298.52 4,704,473.53
Special reserve
Surplus reserve V.40 734,766,581.50 734,766,581.50
Undistributed profits V.41 8,937,259,650.16 8,456,643,326.82
Total shareholders' equity attributable to the parent 13,234,183,227.97 13,121,820,410.55
Minority shareholder's equity 8,532,893,990.31 8,898,407,287.12
Total shareholders' equity 21,767,077,218.28 22,020,227,697.67
Total liabilities and shareholders' equity (or
36,241,438,930.34 35,729,253,651.41
shareholder's equity)
Person-in-charge of the Company: Person-in-charge of the Person-in-charge of the accounting
Zhu Baoguo Company’s accounting work: department: Qiu Qingfeng
Qiu Qingfeng
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Balance Sheet of the Parent Company
30 June 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note 30 June 2023 31 December 2022
Current assets:
Cash and bank balances 1,987,536,896.86 3,148,933,185.29
Financial assets held for trading
Notes receivable 250,442,507.70 249,617,024.89
Accounts receivable 244,301,554.81 291,630,857.74
Receivable financing
Prepayments 51,899,253.54 542,966,676.99
Other receivables 1,157,913,625.25 785,307,024.78
Including: Interests receivables
Dividends receivables 926,892,488.80 544,999,500.00
Inventories 26,487,443.91 63,656,837.97
Contract assets
Assets held-for-sale
Non-current assets due within one
55,066,666.67 54,048,611.11
year
Other current assets
Total current assets 3,773,647,948.74 5,136,160,218.77
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment 3,560,411,562.84 3,524,184,512.63
Other equity instrument
160,833,887.86 141,562,064.27
investment
Other non-current financial assets
Investment properties 6,191,475.43 6,191,475.43
Fixed assets 45,166,334.04 46,410,672.12
Construction in progress 18,820,158.10 15,330,867.65
Productive biological assets
Oil & gas assets
Right-of-use assets 5,505,524.52 7,570,096.21
Intangible assets 18,553,395.99 20,154,211.97
Development cost 132,361,980.23 92,797,615.87
Goodwill
Long-term prepaid expenses 382,796.81 552,795.74
Deferred income tax assets 87,900,288.11 88,792,276.83
Other non-current assets 1,029,681,135.02 815,024,705.98
Total non-current assets 5,065,808,538.95 4,758,571,294.70
Total assets 8,839,456,487.69 9,894,731,513.47
Current liabilities:
Short-term loans 200,000,000.00 100,091,666.67
Financial liabilities held for
trading
Notes payable 617,708,743.41 924,199,480.81
Accounts payable 134,395,769.85 257,832,649.19
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Receipts in advance
Contract liabilities 11,304,465.08 53,648,681.36
Employee benefits payable 129,575,813.68 139,895,738.09
Taxes payable 17,071,042.80 10,549,309.54
Other payables 862,895,522.46 1,303,649,356.48
Including: Interests payables
Dividends payables 175,574,399.22
Liabilities held-for-sale
Non-current liabilities due within
43,190,338.37 47,152,440.47
one year
Other current liabilities 1,026,096.80 3,007,795.91
Total current liabilities 2,017,167,792.45 2,840,027,118.52
Non-current liabilities:
Long-term loans 1,141,000,000.00 1,154,000,000.00
Bonds payable
Lease liabilities 1,438,947.60 3,729,020.22
Long-term payables
Long-term payroll payable
Estimated liabilities
Deferred income 20,091,800.00 20,534,000.00
Deferred tax liabilities 1,349,792.53 997,675.94
Other non-current liabilities
Total non-current liabilities 1,163,880,540.13 1,179,260,696.16
Total liabilities 3,181,048,332.58 4,019,287,814.68
shareholder's equity:
Share capital 1,929,189,374.00 1,929,189,374.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1,693,043,177.98 1,678,414,507.96
Less: Treasury shares 717,135,581.08 347,176,561.29
Other comprehensive income 107,626.77 726,576.72
Special reserve
Surplus reserve 646,164,633.12 646,164,633.12
Undistributed profits 2,107,038,924.32 1,968,125,168.28
Total shareholders' equity
5,658,408,155.11 5,875,443,698.79
attributable to the parent
Total liabilities and shareholders'
8,839,456,487.69 9,894,731,513.47
equity
Person-in-charge of the Company: Person-in-charge of the Person-in-charge of the accounting
Zhu Baoguo Company’s accounting work: department: Qiu Qingfeng
Qiu Qingfeng
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consolidated Income Statement
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note First half of 2023 First half of 2022
I. Total Revenues V.42 8,719,741,599.23 8,564,945,285.55
Including: Operating revenues V.42 8,719,741,599.23 8,564,945,285.55
II. Total operating costs 6,852,636,758.88 6,767,945,476.66
Including: Cost of operations V.42 3,273,420,227.03 3,054,392,703.20
Taxes and surcharges V.43 102,706,433.95 94,322,638.31
Selling expenses V.44 2,399,063,230.20 2,512,369,792.45
Administrative expenses V.45 434,867,895.32 529,828,311.93
Research and development expenses V.46 765,166,559.76 707,433,078.44
Financial expenses V.47 -122,587,587.38 -130,401,047.67
Including: Interest expenses 70,061,146.58 60,979,386.68
Interest income 135,947,800.19 117,501,999.50
Add: Other income V.48 125,925,260.26 97,242,254.03
Investment income("-" for loss） V.49 56,854,039.45 51,014,159.00
Including: Gains from investments in
44,824,481.29 41,208,487.80
associates and joint ventures
Gain from derecognition of financial
assets at amortized cost（"-" for loss）
Gain from net exposure of hedging("-"
for loss）
Gains from changes in fair values("-" for
V.50 -39,314,888.38 -95,479,537.15
loss）
Credit impairment loss("-" for loss） V.51 -22,209,391.69 -2,805,440.83
Assets impairment loss("-" for loss） V.52 -30,171,594.37 -27,834,495.93
Gains from disposal of assets("-" for
V.53 -342,359.46 -510,518.91
loss）
III. Operating profit("-" for loss） 1,957,845,906.16 1,818,626,229.10
Add: Non-operating income V.54 1,757,450.18 4,470,914.88
Less: Non-operating expenses V.55 7,370,028.41 6,741,606.85
IV. Total profit("-" for loss） 1,952,233,327.93 1,816,355,537.13
Less: Income tax expenses V.56 324,663,062.10 271,175,329.55
V. Net profit("-" for net loss） 1,627,570,265.83 1,545,180,207.58
(I) Classified by continuity of operations：
Including: Net profit from continuing
1,627,570,265.83 1,545,180,207.58
operations（"-" for net loss）
Net profit from discontinued
operations（"-" for net loss）
(II) Classified ownership：
Including: Net profit attributable to
shareholders of the parent（"-" for net 815,434,734.90 801,268,519.50
loss）
Net profit attributable to
812,135,530.93 743,911,688.08
minority interests（"-" for net loss）
VI. Other comprehensive income – net
30,080,133.76 -25,063,137.51
of tax
108 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
(I) Other comprehensive income
attributable to shareholders of the parent, 31,181,824.98 -42,998,857.20
net of tax
1. Other comprehensive income not
reclassified into profit or loss -11,322,857.19 -79,078,918.80
subsequently
(1) Changes in remeasurement of defined
benefit plan
(2) Share of other comprehensive income
1,109,969.99
of the equity method investments
(3) Changes in fair value of other equity
-11,322,857.19 -80,188,888.79
instruments investment
(4) Changes in fair value of the
Company's own credit risks
2. Other comprehensive income that will
be reclassified into profit or loss 42,504,682.17 36,080,061.60
subsequently
(1) Share of other comprehensive income
of associates and joint ventures under
equity method
(2) Changes in the fair value of other
debt investments
(3) Reclassification of financial assets
recognised as other comprehensive
income
(4) Credit impairment loss of other debt
investments
(5) Cash flow hedging reserve
(6) Translation of foreign currency
42,504,682.17 36,080,061.60
financial statements
(7) Others
(II) Other comprehensive income
attributable to minority interests, net of -1,101,691.23 17,935,719.69
tax
VII. Total comprehensive income 1,657,650,399.59 1,520,117,070.07
(I) Total comprehensive income
846,616,559.88 758,269,662.30
attributable to shareholders of the parent
(II)Total comprehensive income
811,033,839.70 761,847,407.77
attributable to minority interests
Ⅷ. Earnings per share
(I) Basic earnings per share 0.4264 0.4235
(II) Diluted earnings per share 0.4251 0.4232
Person-in-charge of the Company: Person-in-charge of the Person-in-charge of the accounting
Zhu Baoguo Company’s accounting work: department: Qiu Qingfeng
Qiu Qingfeng
109 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Income Statement of the Parent Company
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note First half of 2023 First half of 2022
I. Total Revenues 1,089,533,681.48 1,177,100,137.17
Less: Cost of operations 562,374,480.65 788,887,001.95
Taxes and surcharges 9,684,525.66 7,310,543.59
Selling expenses 401,053,309.98 347,794,247.66
Administrative expenses 43,383,375.37 106,346,117.92
Research and development expenses 29,929,993.32 30,185,363.06
Financial expenses -58,939,252.75 -7,269,224.74
Including: Interest expenses 17,039,482.75 7,190,074.41
Interest income 52,611,530.57 15,043,357.51
Add: Other income 2,329,988.11 874,278.66
Investment income("-" for loss） 381,330,039.01 315,106,835.25
Including: Gains from investments in
-562,949.79 576,377.39
associates and joint ventures
Gain from derecognition of financial
assets at amortized cost（"-" for loss）
Gain from net exposure of hedging("-"
for loss）
Gains from changes in fair values("-" for
loss）
Credit impairment loss("-" for loss） 768,574.70 1,514,532.04
Assets impairment loss("-" for loss）
Gain from disposal of assets("-" for
loss）
II. Operating profit("-" for loss） 486,475,851.07 221,341,733.68
Add: Non-operating income 25,293.97 94,336.14
Less: Non-operating expenses 36,018.67 23,452.93
III. Total profit("-" for loss） 486,465,126.37 221,412,616.89
Less: Income tax expenses 10,759,313.57 -22,775,639.86
IV. Net profit("-" for net loss） 475,705,812.80 244,188,256.75
(I) Net profit from continuing operations
475,705,812.80 244,188,256.75
（"-" for net loss）
(II) Net profit from discontinued
operations（"-" for net loss）
V. Other comprehensive income, net of
-618,949.95 -80,895,061.60
tax
(I). Other comprehensive income not
reclassified into profit or loss -618,949.95 -80,895,061.60
subsequently
1. Changes in remeasurement of defined
benefit plan
2. Share of other comprehensive income
of the equity method investments
3. Changes in fair value of other equity
-618,949.95 -80,895,061.60
instruments investment
4. Changes in fair value of the
Company's own credit risks
110 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
(II) Other comprehensive income that
will be reclassified into profit or loss
subsequently
1. Share of other comprehensive income
of associates and joint ventures under
equity method
2. Changes in the fair value of other debt
investments
3. Reclassification of financial assets
recognised as other comprehensive
income
4. Credit impairment loss of other debt
investments
5. Cash flow hedging reserve
6. Translation of foreign currency
financial statements
7. Others
VI. Total comprehensive income 475,086,862.85 163,293,195.15
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
Person-in-charge of the Person-in-charge of the Person-in-charge of the
Company: Zhu Baoguo Company’s accounting accounting department:
work: Qiu Qingfeng Qiu Qingfeng
111 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consolidated Cash Flow Statement
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note First half of 2023 First half of 2022
I. Cash flows from operating activities：
Cash received from sales of
8,906,333,555.96 9,266,508,015.60
goods or rendering of services
Tax refund received 90,738,446.12 167,531,739.91
Other cash received relating to
V.57 389,179,917.76 320,066,884.87
operating activities
Sub-total of cash inflows 9,386,251,919.84 9,754,106,640.38
Cash paid for goods and services 3,008,508,020.45 2,686,391,136.11
Cash paid to and on behalf of
1,280,962,434.80 1,283,240,953.21
employees
Payments of all types of taxes 1,016,910,155.51 862,562,844.21
Other cash paid relating to
V.57 2,822,663,623.54 3,018,958,482.06
operating activities
Sub-total of cash outflows 8,129,044,234.30 7,851,153,415.59
Net cash flows from operating
1,257,207,685.54 1,902,953,224.79
activities
II. Cash flows from investing activities：
Cash received from disposal of
374,334,588.68 216,970,980.42
investments
Cash received from returns on
26,682,920.81 121,544,073.53
investments
Net cash received from disposal
of fixed assets, intangible assets 335,824.60 931,662.20
and other long-term assets
Cash received from disposal of
subsidiaries and other business
units
Other cash received relating to
V.57 297,725,238.13 12,984,186.55
investing activities
Sub-total of cash inflows 699,078,572.22 352,430,902.70
Cash paid to acquire fixed
assets, intangible assets and 541,421,314.72 739,956,798.62
other long-term assets
Cash paid to acquire investments 429,194,136.52 30,338,557.45
Cash paid to acquire subsidiaries
22,461,951.59
and other business units
Other cash paid relating to
V.57 215,261,350.77 15,394,931.82
investing activities
Sub-total of cash outflows 1,208,338,753.60 785,690,287.89
Net cash flows from investing
-509,260,181.38 -433,259,385.19
activities
III. Cash flows from financing activities ：
Cash received from capital
6,700,000.00 61,420,564.63
contribution
Including: Cash received from
investment by minority interests 6,700,000.00 22,444,277.37
of subsidiaries
Cash received from borrowings 2,272,549,701.83 3,620,437,809.48
112 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Cash received relating to other
V.57 20,000,000.00 3,124,846.38
financing activities
Sub-total of cash inflows 2,299,249,701.83 3,684,983,220.49
Cash repayments of amounts
1,435,273,289.94 2,583,795,608.09
borrowed
Cash payments for interest
expenses and distribution of 1,119,156,231.94 1,219,425,266.74
dividends or profits
Including: Dividend paid to
881,913,452.00 900,571,289.90
minority interests of subsidiaries
Other cash payments relating to
V.57 649,256,623.95 538,573,404.10
financing activities
Sub-total of cash outflows 3,203,686,145.83 4,341,794,278.93
Net cash flows from financing
-904,436,444.00 -656,811,058.44
activities
IV. Effect of foreign exchange
rate changes on cash and cash 82,691,655.27 105,379,819.98
equivalents
V. Net increase in cash and
-73,797,284.57 918,262,601.14
cash equivalents
Add: Opening balance of cash
14,178,465,686.40 11,697,518,141.18
and cash equivalent
VI. Closing balance of cash
14,104,668,401.83 12,615,780,742.32
and cash equivalents
Person-in-charge of the Company: Person-in-charge of the Person-in-charge of the accounting
Zhu Baoguo Company’s accounting work: Qiu department: Qiu Qingfeng
Qingfeng
113 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Cash Flow Statement of Parent Company
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
Item Note First half of 2023 First half of 2022
I. Cash flows from operating activities：
Cash received from sales of goods or
1,186,543,577.01 1,627,134,774.34
rendering of services
Tax refund received
Other cash received relating to
675,490,295.47 1,361,915,765.88
operating activities
Sub-total of cash inflows 1,862,033,872.48 2,989,050,540.22
Cash paid for goods and services 520,976,342.45 1,220,271,835.02
Cash paid to and on behalf of
110,926,580.85 171,079,267.11
employees
Payments of all types of taxes 78,549,138.25 59,188,798.29
Other cash paid relating to operating
1,608,207,704.80 747,239,926.63
activities
Sub-total of cash outflows 2,318,659,766.35 2,197,779,827.05
Net cash flows from operating
-456,625,893.87 791,270,713.17
activities
II. Cash flows from investing activities：
Cash received from disposal of
216,970,980.42
investments
Cash received from returns on
403,351,191.73
investments
Net cash received from disposal of
fixed assets, intangible assets and 10,500.00 13,000.00
other long-term assets
Cash received from disposal of
subsidiaries and other business units
Other cash received relating to
291,590,000.00 158,470.77
investing activities
Sub-total of cash inflows 291,600,500.00 620,493,642.92
Cash paid to acquire fixed assets,
intangible assets and other long-term 3,629,530.81 3,688,331.00
assets
Cash paid to acquire investments 56,790,000.00
Cash paid to acquire subsidiaries and
other business units
Other cash paid relating to investing
200,000,000.00
activities
Sub-total of cash outflows 260,419,530.81 3,688,331.00
Net cash flows from investing
31,180,969.19 616,805,311.92
activities
III. Cash flows from financing activities ：
Cash received from capital
38,976,287.26
contribution
Cash received from borrowings 300,000,000.00 750,000,000.00
Cash received relating to other
2,214,629.88
financing activities
Sub-total of cash inflows 300,000,000.00 791,190,917.14
114 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Cash repayments of amounts
217,000,000.00 650,000,000.00
borrowed
Cash payments for interest expenses
and distribution of dividends or 178,476,531.68 281,112,849.39
profits
Other cash payments relating to
370,702,308.51 520,332,751.22
financing activities
Sub-total of cash outflows 766,178,840.19 1,451,445,600.61
Net cash flows from financing
-466,178,840.19 -660,254,683.47
activities
IV. Effect of foreign exchange rate
changes on cash and cash 20,771,674.01 1,150.86
equivalents
V.Net increase in cash and cash
-870,852,090.86 747,822,492.48
equivalents
Add: Opening balance of cash and
2,858,062,020.22 1,370,906,734.13
cash equivalent
VI. Closing balance of cash and
1,987,209,929.36 2,118,729,226.61
cash equivalents
Person-in-charge of the Company: Person-in-charge of the Person-in-charge of the accounting
Zhu Baoguo Company’s accounting work: Qiu department: Qiu Qingfeng
Qingfeng
115 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Consolidated Statement of Changes in Owner's Equity
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
First half of 2023
Owner's equity attributable to the parent company
Total
Item Other equity instruments Other General Minority
Less: Treasury Special Surplus Undistributed shareholders'
Share capital Capital reserve comprehensive risk Subtotal interests
Preferred Perpetual shares reserve reserve profits equity
Others income reserve
share bonds
I.Balance at end
1,929,189,374.00 2,343,693,215.99 347,176,561.29 4,704,473.53 734,766,581.50 8,456,643,326.82 13,121,820,410.55 8,898,407,287.12 22,020,227,697.67
of previous year
Add: Changes in
accounting
policies
Correction of
prior period errors
Business
combination
under common
control
Others
II. Balance at
beginning of 1,929,189,374.00 2,343,693,215.99 347,176,561.29 4,704,473.53 734,766,581.50 8,456,643,326.82 13,121,820,410.55 8,898,407,287.12 22,020,227,697.67
period
III. Movement
over the period -29,476,311.12 369,959,019.79 31,181,824.98 480,616,323.34 112,362,817.41 -365,513,296.81 -253,150,479.39
（"-" for loss）
(I)Total
comprehensive 31,181,824.98 815,434,734.90 846,616,559.88 811,033,839.70 1,657,650,399.59
income
(II)Capital
contribution or
14,628,670.02 369,959,019.79 -355,330,349.77 -73,940,616.66 -429,270,966.43
reduction from
shareholders
1.Capital
contribution from
369,959,019.79 -369,959,019.79 6,700,000.00 -363,259,019.79
ordinary
shareholders
2. Capitals
invested by other
equity instrument
holders
3. Increase in
shareholders'
equity resulted 14,628,670.02 14,628,670.02 14,628,670.02
from share-based
payments
4. Others -80,640,616.66 -80,640,616.66
116 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
(III)
Appropriation of -336,792,056.76 -336,792,056.76 -1,123,591,995.09 -1,460,384,051.85
profits
1.Transfer to
surplus reserve
2.Transfer to
general risk
reserve
3.Distributions to
-336,792,056.76 -336,792,056.76 -1,123,591,995.09 -1,460,384,051.85
shareholders
4.Others
(IV) Transfer
within
1,973,645.20 1,973,645.20 2,434,430.12 4,408,075.32
shareholders'
equity
1.Capital reserve
converting into
share capital (or
capital)
2.Surplus reserve
converting into
share capital (or
capital)
3.Surplus reserve
cover the deficit
4.Changes of
equity from the
revaluation of
defined benefit
plan
5.Other
comprehensive
1,973,645.20 1,973,645.20 2,434,430.12 4,408,075.32
income transfer to
retained earnings
6.Others
(V)Specific
reserve
1.Appropriation
for the period
2.Used in the
period（"-" for
loss）
(VI) Others -44,104,981.14 -44,104,981.14 18,551,045.12 -25,553,936.02
IV. Balance at
1,929,189,374.00 2,314,216,904.87 717,135,581.08 35,886,298.52 734,766,581.50 8,936,012,274.69 13,234,183,227.97 8,528,725,362.28 21,767,077,218.28
end of period
117 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
First half of 2022
Owner's equity attributable to the parent company
Minority Total
Item Other equity instruments Less: Other General
Special Surplus Undistributed shareholder's shareholders'
Share capital Preferred Perpetual Capital reserve Treasury comprehensive risk Subtotal
Others reserve reserve profits equity equity
shares bonds shares income reserve
I. Balance at
end of 1,907,727,908.00 2,265,357,311.92 222,644,454.50 5,387,545.97 640,821,179.08 7,223,644,166.22 11,820,293,656.69 8,359,317,322.63 20,179,610,979.32
previous year
Add: Changes
in accounting
policies
Correction of
prior period
errors
Business
combination
under common
control
Others
II. Balance at
beginning of 1,907,727,908.00 2,265,357,311.92 222,644,454.50 5,387,545.97 640,821,179.08 7,223,644,166.22 11,820,293,656.69 8,359,317,322.63 20,179,610,979.32
period
III. Movement
over the year
4,812,759.00 51,003,487.03 520,332,751.22 -42,998,857.20 8,617,763.68 601,270,760.95 102,373,162.24 -181,707,712.31 -79,334,550.07
（"-" for
loss）
(I)Total
comprehensive -42,998,857.20 801,268,519.50 758,269,662.30 761,847,407.77 1,520,117,070.07
income
(II)Capital
contribution or
4,812,759.00 34,163,528.26 520,332,751.22 -481,356,463.96 16,410,217.23 -464,946,246.73
reduction from
shareholders
1.Capital
contribution
4,812,759.00 34,163,528.26 520,332,751.22 -481,356,463.96 16,410,217.23 -464,946,246.73
from ordinary
shareholders
2. Capitals
invested by
other equity
instrument
holders
3. Increase in
shareholders'
equity resulted
from share-
based payments
4. Others
(III)
Appropriation -277,557,631.65 -277,557,631.65 -967,251,289.90 -1,244,808,921.55
of profits
118 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
1.Transfer to
surplus reserve
2.Transfer to
general risk
reserve
3.Distributions
-277,557,631.65 -277,557,631.65 -967,251,289.90 -1,244,808,921.55
to shareholders
4.Others
(IV) Transfer
within
8,617,763.68 77,559,873.10 86,177,636.78 86,177,636.78
shareholders'
equity
1.Capital
reserve
converting into
share capital
(or capital)
2.Surplus
reserve
converting into
share capital
(or capital)
3.Surplus
reserve cover
the deficit
4. Changes of
equity from the
revaluation of
defined benefit
plan
5.Other
comprehensive
income transfer 8,617,763.68 77,559,873.10 86,177,636.78 86,177,636.78
to retained
earnings
6.Others
(V) Specific
reserve
1.Appropriation
for the period
2.Used in the
period（"-" for
loss）
(VI) Others 16,839,958.77 16,839,958.77 7,285,952.59 24,125,911.36
IV. Balance at
1,912,540,667.00 2,316,360,798.95 742,977,205.72 -37,611,311.23 649,438,942.76 7,824,914,927.17 11,922,666,818.93 8,177,609,610.32 20,100,276,429.25
end of period
Person-in-charge of the Company: Zhu Baoguo Person-in-charge of the Company’s accounting work: Person-in-charge of the accounting department: Qiu
Qiu Qingfeng Qingfeng
119 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Statement of Changes in Owner's Equity of the Parent Company
January to June, 2023
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit: Yuan Currency: RMB
First half of 2022
Other equity instruments Other
Item Less: Treasury Special Undistributed Total shareholders'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve
Others shares reserve profits equity
share bonds income
I. Balance at end of previous year 1,929,189,374.00 1,678,414,507.96 347,176,561.29 726,576.72 646,164,633.12 1,968,125,168.28 5,875,443,698.79
Add: Changes in accounting policies
Correction of errors
Others
II. Balance at beginning of period 1,929,189,374.00 1,678,414,507.96 347,176,561.29 726,576.72 646,164,633.12 1,968,125,168.28 5,875,443,698.79
III. Movement over the period（"-" for
14,628,670.02 369,959,019.79 -618,949.95 138,913,756.04 -217,035,543.68
loss）
(I) Total comprehensive income -618,949.95 475,705,812.80 475,086,862.85
(II) Capital contribution or reduction from
14,628,670.02 369,959,019.79 - -355,330,349.77
shareholders
1.Capital contribution from shareholders 369,959,019.79 -369,959,019.79
2.Capitals invested by other equity instrument
holders
3.Increase in shareholders' equity resulted from
14,628,670.02 14,628,670.02
share-based payments
4. Others
(III) Appropriation of profits -336,792,056.76 -336,792,056.76
1.Transfer to surplus reserve
2.Distributions to shareholders -336,792,056.76 -336,792,056.76
3.Others
(IV) Transfer within shareholders' equity
1.Capital reserve converting into share capital
(or capital)
2.Surplus reserve converting into share capital
(or capital)
3.Surplus reserve cover the deficit
4.Changes of equity from the revaluation of
defined benefit plan
5.Other comprehensive income transfer to
retained earnings
6.Others
(V) Specific reserve
1.Appropriation for the period
2.Used in the period（"-" for loss）
(VI) Others
IV. Balance at end of period 1,929,189,374.00 1,693,043,177.98 717,135,581.08 107,626.77 - 646,164,633.12 2,107,038,924.32 5,658,408,155.11
120 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
First half of 2022
Other equity instruments Other
tem Less: Treasury Special Undistributed Total shareholders'
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserve
Others shares reserve profits equity
share bonds income
I. Balance at end of previous year 1,907,727,908.00 1,605,482,128.64 222,644,454.50 77,015,953.08 552,219,230.70 1,400,174,178.18 5,319,974,944.10
Add: Changes in accounting policies
Correction of errors
Others
II. Balance at beginning of year 1,907,727,908.00 1,605,482,128.64 222,644,454.50 77,015,953.08 552,219,230.70 1,400,174,178.18 5,319,974,944.10
III. Movement over the period（"-" for
4,812,759.00 36,426,888.30 520,332,751.22 -80,895,061.60 8,617,763.68 44,190,498.20 -507,179,903.64
loss）
(I) Total comprehensive income -80,895,061.60 244,188,256.75 163,293,195.15
(II) Capital contribution or reduction from
4,812,759.00 34,163,528.26 520,332,751.22 -481,356,463.96
shareholders
1.Capital contribution from shareholders 4,812,759.00 34,163,528.26 520,332,751.22 -481,356,463.96
2. Capitals invested by other equity instrument
holders
3.Increase in shareholders' equity resulted from
share-based payments
4. Others
(III). Profit distribution -277,557,631.65 -277,557,631.65
1. Transfer to surplus reserve
2. Distributions to shareholders -277,557,631.65 -277,557,631.65
3. Others -
(IV) Transfer within shareholders' equity 8,617,763.68 77,559,873.10 86,177,636.78
1.Capital reserve converting into share capital
(or capital)
2.Surplus reserve converting into share capital
(or capital)
3.Surplus reserve cover the deficit
4.Changes of equity from the revaluation of
defined benefit plan
5.Other comprehensive income transfer to
8,617,763.68 77,559,873.10 86,177,636.78
retained earnings
6.Others
(V) Specific reserve
1.Appropriation for the period
2.Used in the period（"-" for loss）
(VI) Others 2,263,360.04 2,263,360.04
IV. Balance at end of period 1,912,540,667.00 1,641,909,016.94 742,977,205.72 -3,879,108.52 560,836,994.38 1,444,364,676.38 4,812,795,040.46
Person-in-charge of the Company: Zhu Baoguo Person-in-charge of the Company’s accounting work: Person-in-charge of the accounting department: Qiu
Qiu Qingfeng Qingfeng
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Joincare Pharmaceutical Group Industry Co., Ltd
Notes to the financial statements
（All amounts in RMB Yuan unless otherwise stated）
I Company Profile
1. Overview
√Applicable □N/A
The Company is formerly known as Shenzhen Aimier Food Co., Ltd. (深圳爱迷尔食品有限公司), was
a Sino-foreign joint venture officially established on 18 December 1992 with the approval from
Shenzhen Administration for Industry and Commerce.
On 24 November 1999, the Company was reorganized as a joint stock limited company.
On 6 February 2001, the Company was approved by the China Securities Regulatory Commission to
issue domestically listed shares (A shares) to the public. On 8 June 2001, shares of the Company were
listed and traded on Shanghai Stock Exchange.
As of 30 June 2023, the total share capital of the Company was RMB 1,929,189,374 and the total number
of shares of the Company was 1,929,189,374. The controlling shareholder of the Company is Shenzhen
Baiyeyuan Investment Co., Ltd. (深圳市百业源投资有限公司), and the ultimate controlling party is
Zhu Baoguo (朱保国).
The Company is engaged in the integrated pharmaceutical industry.
The Company and its subsidiaries primarily engaged in the R&D, production and sale of pharmaceutical
products and healthcare products, which covered drug preparation products, active pharmaceutical
ingredients (“APIs”) and intermediates, diagnostic reagents and equipment as well as healthcare
products.
2. Scope of consolidated financial statements
√Applicable □N/A
The information of subsidiaries included in the scope of consolidation for the first six months of 2023
refer to Note VII “Equity in other entities” and the information of the changes in scope of consolidation
during the period refer to Note VI “Changes in scope of consolidation”.
II Basis of Preparation for the Financial Statements
1. Basis of preparation
The Company's financial statements have been prepared on the going-concern basis.
2. Continuing operation
√Applicable □N/A
The financial statements have been prepared in accordance with the Accounting Standards for Business
Enterprises issued by the Ministry of Finance of People’s Republic of China (“MOF”) and its application
guidance, interpretations and the other related provisions (collectively, the “Accounting Standards for
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Business Enterprises”). In addition, the Company also discloses relevant financial information in
accordance with the Information Disclosure and Presentation Rules for Companies Offering Securities
to the Public No. 15 – General Provisions on Financial Reporting (2014 Revision) issued by the China
Securities Regulatory Commission.
The financial statements have been prepared on the going-concern basis.
The Company's accounting is measured on an accrual basis. Except for certain financial instruments,
the financial statements are generally measured at historical cost. Non-current assets held for sale are
stated at the lower of fair value less estimated selling costs and their original carrying amount if they
qualify as held for sale. In case of asset impairment, the Company shall make provisions for impairment
in accordance with applicable provisions.
III Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimate tips:
√Applicable □N/A
The Company determines the depreciation of fixed assets, amortisation of intangible assets,
capitalisation condition of R&D expenses and revenue recognition policies on the basis of its production
and operation characteristics. Details of accounting policies are set out in Note III.16, Note III.20, Note
III.21 and Note III.28.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements comply with the Accounting Standards for Business Enterprises, which gave a
true and complete view of the consolidated and the Company's financial positions as at June 30, 2023,
and the consolidated and the Company’s operating results and the consolidated and the Company’s cash
flows and other relevant information for the 6 months period ending June 30, 2023.
2. Accounting period
The fiscal year of the Company is from 1 January to 31 December in each calendar year.
3. Business cycle
√Applicable □N/A
The Company’s operating cycle is 12 months.
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas
subsidiaries of the Company usually recognise HK dollar, Macau Pataca and US dollar as their
functional currencies according to the primary economic environment of which these subsidiaries
operate. The Company prepares its financial statements in RMB.
5. Accounting treatment for business combinations involving enterprises under common control
and business combinations involving enterprises not under common control
√Applicable □N/A
(1). Business combinations involving enterprises under common control
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For the business combination involving entities under common control, the assets acquired and liabilities
assumed are measured based on their carrying amounts in the consolidated financial statements of the
ultimate controlling party as at the combination date, except the adjustment made due to different
accounting policies. The difference between the carrying amount of the consideration paid for the
combination and the net assets acquired is adjusted against share premium in the capital reserve, with
any excess adjusted against retained earnings.
Business combination involving enterprises under common control and achieved in a number of
transactions
In the separate financial statements, the initial investment cost will be recognised at the carrying amount
of the Company's share in the combined party's net assets in the consolidated financial statements of the
ultimate controlling party on the date of combination. The difference between the initial investment cost
and the sum of the carrying amount of the investment held and the carrying amount of consideration
paid for the combination at the combination date is adjusted against share premium in the capital reserve,
with any excess adjusted against retained earnings.
In the consolidated financial statements, the assets acquired and liabilities assumed are measured based
on their carrying amounts in the consolidated financial statements of the ultimate controlling party as at
the combination date, except the adjustment made due to different accounting policies. The difference
between sum of the carrying amount of the investment held and the carrying amount of the consideration
paid for the combination and the carrying amount of the net assets acquired is adjusted against share
premium in the capital reserve, with any excess adjusted against retained earnings. For long-term equity
investment held before the control over the combined party is obtained, profit or loss, other
comprehensive income and other changes to equity interest attributable to the owners recognised from
the later of the acquisition of the original equity interest and the date when the combing party and the
combined party are placed under common control until the date of combination shall be offset against
retained profit at the beginning of the period of the comparative financial statements or profit or loss of
the period respectively.
(2). Business combinations involving enterprises not under common control
For the business combinations involving enterprises not under common control, the combination cost
shall be the fair value of the assets transferred, liabilities incurred or assumed, and equity securities
issued by the acquirer for acquisition of control in the acquiree on the acquisition date. The assets,
liabilities and contingent liabilities acquired or assumed on the date of acquisition are recognised at fair
value.
Where the combination cost exceeds the fair value of the acquiree's identifiable net assets in the business
combination, the difference is recognised as goodwill and is subsequently measured at cost less
accumulated impairment provisions. Where the combination cost is less than the fair value of the
acquiree's identifiable net assets in the business combination, the difference shall be included in profit
or loss for the period after review.
Business combination involving enterprises not under common control and achieved in a number of
transactions
In the separate financial statements, the initial cost of the investment is the sum of the carrying amount
of the acquiree's equity investment held before the acquisition date and the additional investment cost
on the acquisition date. In respect of the equity investment held prior to the acquisition date, other
comprehensive income will not be recognised using equity method on the acquisition date, and such
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investment will be accounted for on the same accounting treatment as direct disposal of relevant asset
or liability by the investee at the time of disposal. Shareholder's equity recognised due to the changes of
other shareholder's equity other than the changes of net loss and profit, other comprehensive income and
profit distribution shall be transferred to profit or loss for current period when disposed. If the equity
investment held prior to the acquisition date is measured at fair value, the cumulative changes in fair
value recognised in other comprehensive income shall be transferred to profit or loss for current period
when accounted for using cost method.
In the consolidated financial statements, the combination cost is the sum of consideration paid on the
acquisition date and fair value of the acquiree's equity held prior to the acquisition date. The equity of
the acquirees held before the acquisition date is re-measured at the fair value of the equity on the
acquisition date and the differences between the fair value and the carrying amount are recognised in
the income for the current period; in respect of any other comprehensive income attributable to the
equity interest in the acquiree held prior to the acquisition date and any changes of other shareholder's
equity shall be transferred to investment profit or loss for current period on the acquisition date, except
for the other comprehensive income incurred due to the changes arising from remeasuring net assets or
net liabilities of defined benefit plan attributable to the acquiree.
(3). Transaction fees attribution during the combination
The intermediary and other relevant administrative expenses such as audit, legal and valuation advisory
for business combinations are recognised in profit or loss when incurred. Transaction costs of equity or
debt securities issued as the considerations of business combination are included in the initial recognition
amounts.
6. Preparation of consolidated financial statements
√Applicable □N/A
(1) Scope of consolidation
The scope of consolidated financial statements is determined based on control. Control means the
Company has exposures or rights to variable returns from its involvement with the investee and the
ability to affect those returns through power over such investee. Subsidiaries are the entities controlled
by the Company (including enterprises, a dividable part of investees and structured entities).
(2) Method for preparation of the consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the Company in accordance with other relevant information. In
preparing the consolidation financial statements, the Company and its subsidiaries are required to apply
consistent accounting policy and accounting period, intra-group transactions and balances shall be offset.
A subsidiary or a business acquired through a business combination involving entities under common
control in the reporting period shall be included in the scope of the consolidation of the Company from
the date when it is under control of the ultimate controlling party, and then its operating results and cash
flows will be included in the consolidated income statement and the consolidated cash flow statement,
respectively.
For a subsidiary or a business acquired through a business combination involving entities not under
common control in the reporting period, its income, expenses and profits are included in the consolidated
income statement, and its cash flows are included in the consolidated cash flow statement from the
acquisition date to the end of the reporting date.
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The shareholders' equity of the subsidiaries that are not attributable to the Company shall be presented
under shareholders' equity in the consolidated balance sheet as minority interests. The portion of net
profit or loss of subsidiaries for the period attributable to minority interest is presented in the
consolidated income statement under the “profit or loss of minority interest”. When the amount of loss
attributable to the minority shareholders of a subsidiary exceeds the minority shareholders' portion of
the opening balance of owners' equity of the subsidiary, the excess amount shall be allocated against
minority interest.
(3) Purchase of the minority stake in the subsidiary
The difference between the long-term equity investments costs acquired by the purchase of minority
interests and the share of the net assets that the subsidiaries have to continue to calculate from the date
of purchase or the date of consolidation in proportion to the new shareholding ratio, and the difference
between the disposal of the equity investment without losing control over its subsidiary and the disposal
of the long-term equity investment corresponding to the share of the net assets of the subsidiaries from
the date of purchase or the date of consolidation, shall be adjusted to the capital reserve (or share
premium), if the capital reserve is not sufficient, any excess will be adjusted to retained earnings.
(4) Treatment of loss of control of subsidiaries
Where the Company loses its control over the original subsidiary due to the disposal of some equity
investment or other reasons, the remaining equity is re-measured at its fair value on the date when the
Company loses its control. The difference between the sum of the consideration acquired due to the
disposal of the equity and the fair value of the remaining equity, and the Company's share in the sum of
carrying value of net assets of the original subsidiary and goodwill calculated on an ongoing basis from
the acquisition date based on the original shareholding proportion is recognised in the investment income
for the current period when the control is lost.
Other comprehensive income in relation to the original subsidiary's equity investment are transferred to
profit or loss for the current period when control ceases, except for those arising from re-measuring net
assets or net liabilities of defined benefit plan by the investee.
(5) Treatment of disposal through several transactions until the loss of control of subsidiaries
Where the Company disposes of the equity interests in the subsidiary through several transactions until
it loses control, and the transaction terms, conditions and economic effects satisfy one or several of the
following circumstances, such several transactions shall be deemed as a basket of transactions in
accounting treatment:
① Such transactions are entered into simultaneously or upon the consideration of the mutual impacts;
② No complete commercial result will be realised without such transactions as a whole;
③ The occurrence of one transaction depends on the occurrence of at least another transaction;
④ The result of an individual transaction is not economical, but it would be economical after taken into
account of other transactions in the series.
In the separate financial statements, where the Company disposes of the equity investment in the
subsidiary through several transactions until the loss of control, and such transactions are not regarded
as “a basket of transactions”, the carrying amount of the long-term equity investment involving each
disposal will be carried forward, with the difference between the disposal price and the carrying amount
of the long-term equity investment involving the disposal being accounted into the investment incomes
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for the current period; where the transactions constitute “a basket of transactions”, the difference
between the consideration of each disposal and the carrying amount of the long-term equity investment
involving the disposal before the loss of the control, is recognised as the other comprehensive income
and will be carried forward to the profit or loss for the current period when the control is lost.
In the consolidated financial statements, where the Company disposes of the equity investment in the
subsidiary through several transactions until the loss of control, the measurement of the remaining equity
interest and the accounting treatment of the losses and gains of the disposal will be made with reference
to the “Treatment of loss of control of subsidiaries” as described above. For the difference between the
consideration of each disposal before the loss of the control and the carrying amount of the Company's
share in the net assets involving the disposal of such subsidiary calculated on an on-going basis from
the acquisition date, the treatment will be made as follows:
① In case the transactions are “a basket of transactions”, such difference is recognised as the other
comprehensive income and will be carried forward to the profit or loss for the current period when the
control is lost.
② In case the transactions are not “a basket of transactions”, such difference is accounted into the
capital reserve (or share premium) as equity, and shall not be carried forward to the profit or loss for the
current period when the control is lost.
7. Classification of joint arrangement and accounting treatment for joint operation
√Applicable □N/A
A joint arrangement is an arrangement jointly controlled by two or more parties. The Company's joint
arrangement is classified into the joint operation and the joint venture.
(1) Joint operation
A joint operation is a joint arrangement whereby the Company have rights and obligations to the relevant
assets and liabilities.
The Company recognises the following items in relation to its interest in a joint operation, and makes
corresponding accounting treatment in accordance with relevant accounting standards:
A. The solely-held assets, and the share of any assets held jointly;
B. The solely-assumed liabilities, and its share of any liabilities incurred jointly;
C. Its revenue from the sale of its share of the output arising from the joint operation;
D. Its share of the revenue from the sale of the output by the joint operation;
E. The solely-incurred expenses, including its share of any expenses incurred jointly.
(2) Joint ventures
A joint venture is a joint arrangement whereby the Company only entitled to the net assets of the
arrangements.
The Company's investment in joint ventures is accounted for using the equity method according to the
rules of the long-term equity investment.
8. Standards for determination of cash and cash equivalents
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Cash and cash equivalents of the Company include cash on hand, bank deposit readily available for
payment and those investments held by the Company that are short-term (normally due in three months
since the acquisition date), highly liquid, readily convertible into known amounts of cash and subject to
an insignificant risk of change in value.
9. Foreign currency transactions and translation of financial statements in foreign currency
√Applicable □N/A
(1) Foreign currency transactions
Foreign currency transactions incurred by the Company are translated to the functional currency at the
spot exchange rates on the date of the transactions upon initial recognition.
Monetary items denominated in foreign currencies are translated to functional currency at the spot
exchange rate on the balance sheet date. Exchange differences arising from the differences between the
spot exchange rate prevailing at the balance sheet date and those spot rates used on initial recognition
or at the previous balance sheet date are recognised in profit or loss for the current period; non-monetary
items denominated in foreign currencies that are measured at historical cost are translated using the spot
exchange rate on the transaction date. Non-monetary items denominated in foreign currencies that are
measured at fair value are translated using the spot exchange rate on the date the fair value is determined;
the resulting exchange differences between the amounts in functional currency upon translation and in
original functional currency are recognised in profit or loss for the current period.
(2) Translation of financial statements in foreign currency
At the balance sheet date, when translating the foreign currency financial statements of overseas
subsidiaries, the assets and liabilities in the balance sheet are translated at the spot exchange rate at the
balance sheet date; all items except for “Retained earnings” of the shareholders' equity are translated at
the spot exchange rate on the transaction date.
The revenue and expenses in profit or loss are translated at the spot exchange rate on the transaction
date.
All items in the statement of cash flows are translated at the spot exchange rate on the transaction date.
The effect of exchange difference on cash is adjusted and separately presented as “Effect of changes in
foreign exchange rates on cash and cash equivalents” in the cash flow statement.
The exchange differences arising from translation of the financial statements are presented as the “other
comprehensive income” in the shareholders' equity of the balance sheet.
When the Company disposes of the overseas operation and loses control, the differences arising from
the translation of the financial statements in foreign currency that have been presented under the
shareholders' equity in the balance sheet and involving such overseas operation are carried forward to
the profit or loss for the current period in whole or in the proportion of the disposal of the overseas
operation.
10. Financial instruments
√Applicable □N/A
Financial instruments are contracts creating financial assets of a party and financial liabilities or equity
instruments of other parties.
(1) Recognition and De-recognition of financial instruments
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A financial asset or financial liability is recognised when the Company becomes one of the parties under
a financial instrument contract.
The financial assets will be derecognised if any of the following conditions is satisfied:
① The contractual right to receive the cash flow of the financial assets is terminated;
② The financial assets have been transferred and the transferred financial asset satisfies the following
conditions of derecognition.
If the current obligation of a financial liability (or a part thereof) has been discharged, the financial
liability (or that part of the financial liability) will be derecognised. When the Company (as the debtor)
and the lender have signed an agreement which uses a new financial liability to replace the existing
financial liability, and the contract terms of the new financial liability are substantially different with
the original financial liability, the original financial liability shall be de-recognised, and the new
financial liability shall be recognised at the same time.
The regular transactions of the financial assets are recognised and derecognised at the transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into three categories: financial assets at amortised cost; financial
assets at fair value through other comprehensive income; and financial assets at fair value through profit
or loss based on the business model for managing financial assets and their contractual cash flow
characteristics upon initial recognition.
Financial assets at amortised cost
The Company shall classify financial assets that meet the following conditions and are not designated
as financial assets at fair value through profit or loss for the current period as financial assets measured
at amortised cost:
A. The Company's business model for managing the financial assets is to collect contractual cash flow;
B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is
only the payment for principal and interest accrued on the outstanding principal.
After initial recognition, these financial assets are measured at amortised cost using the effective interest
method. Gains or losses arising from financial assets which are measured at amortised cost and not part
of any hedging relationship are included in the profit and loss of the current period upon de-recognition,
amortisation using the effective interest method, or impairments recognition.
Financial assets at fair value through other comprehensive income
The Company shall classify financial assets that meet the following conditions and are not designated
as financial assets measured at fair value through profit or loss for the current period as financial assets
measured at fair value through other comprehensive income
A. The Company's business model for managing the financial assets is both to collect contractual cash
flows and to sell the financial assets;
B. The terms of the financial asset contract stipulate that the cash flow generated on a specific date is
only the payment for principal and interest accrued on the outstanding principal
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After initial recognition, these financial assets are subsequently measured at fair value. Interest,
impairment losses or gains and exchange losses and gains calculated using the effective interest method
are recognised in profit or loss for the current period, while other gains or losses are recognised in other
comprehensive income. The cumulative profit or loss previously included in other comprehensive
income will be transferred to the profit or loss for the current period upon derecognition of the financial
assets.
Financial assets at fair value through profit or loss for the current period
In addition to the above financial assets which are measured at amortised cost or at fair value through
other comprehensive income, the Company classifies all other financial assets as financial assets
measured at fair value through profit or loss for the current period. When initial recognition, in order to
eliminate or significantly reduce accounting mismatches, the Company irrevocably designates some
financial assets that should have been measured at amortised cost or at fair value through other
comprehensive income as financial assets at fair value through profit or loss for the current period.
After initial recognition, these financial assets are subsequently measured at fair value, and the profits
or losses (including interest and dividend income) generated from which are recognised in profit or loss
for the current period, unless the financial assets are part of the hedging relationship.
However, with respect to non-trading equity instrument investments, the Company may irrevocably
designate them as financial assets measured at fair value through other comprehensive income at initial
recognition. The designation is made on the basis of individual investment, and the relevant investment
conforms to the definition of equity instruments from the issuer's point of view.
After initial confirmation, financial assets are subsequently measured at fair value. Dividend income
that meets the requirements is recognised in profit and loss, and other gains or losses and changes in fair
value are recognised in other comprehensive gains. When derecognised, the accumulated gains or losses
previously recognised in other comprehensive gains are transferred from other comprehensive gains to
retained earnings.
The business model of managing financial assets refers to how the Company manages financial assets
to generate cash flow. The business model decides whether the source of cash flow of financial assets
managed by the Company is to collect contract cash flow, sell financial assets or both of them. Based
on objective facts and the specific business objectives of financial assets management decided by key
managers, the Company determines the business model of financial assets management.
The Company evaluates the characteristics of the contract cash flow of financial assets to determine
whether the contract cash flow generated by the relevant financial assets on a specific date is only to
pay principal and interest based on the amount of unpaid principal. Among them, principal refers to the
fair value of financial assets at the time of initial confirmation; interest includes the consideration of
time value of money, credit risk related to the amount of unpaid principal in a specific period, and other
basic borrowing risks, costs and profits. In addition, the Company evaluates the terms and conditions of
the contracts that may lead to changes in the time distribution or amount of cash flow in financial asset
contracts to determine whether they meet the requirements of the above contract cash flow's
characteristics.
Only when the Company changes its business model of managing financial assets, all the financial assets
affected shall be reclassified on the first day of the first reporting period after the business model changes,
otherwise, financial assets shall not be reclassified after initial confirmation.
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Financial assets are measured at fair value on initial recognition. The relevant transaction cost of
financial assets at fair value through profit or loss is directly recognised in profit or loss for the current
period, and that of other types of financial assets is included in the initially recognised amount. Trade
receivables or notes receivable arising from sales of goods or rendering services, without significant
financing component, are initially recognised based on the transaction price expected to be entitled by
the Company.
(3) Classification and measurement of financial liabilities
On initial recognition, the Company's financial liabilities are classified into financial liabilities at fair
value through profit or loss and financial liabilities at amortised cost. For financial liabilities not
classified as financial liabilities at fair value through profit or loss, the relevant transaction costs are
included in the initially recognised amount.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated at fair value through profit or loss upon initial recognition. Such financial
liabilities are subsequently measured at fair value, all gains and losses arising from changes in fair value
and dividend and interest expense relative to the financial liabilities are recognised in profit or loss for
the current period.
Financial liabilities at amortised cost
Other financial liabilities are subsequently measured at amortised cost using the effective interest
method; gains and losses arising from derecognition or amortisation is recognised in profit or loss for
the current period.
Distinction between financial liabilities and equity instruments
The financial liability is the liability that meets one of following criteria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse condition, contractual obligation to exchange financial assets or financial
liabilities with other parties.
③ A contract that will or may be settled in the entity's own equity instruments and is a non-derivative
for which the entity is or may be obliged to deliver a variable number of the entity's own equity
instruments.
④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash or
another financial asset for a fixed number of the entity's own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities.
If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or
other financial assets, the contractual obligation meets the definition of financial liability.
If a financial instrument must or are able to be settled by the Company's own equity instrument, the
Company should consider whether the Company's equity instrument as the settlement instrument is a
substitute of cash or other financial assets or the residual interest in the assets of the Company after
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deducting all of its liabilities. If the former, the tool is the Company's financial liability; if the latter, the
tool is the equity instrument of the Company.
(4) Derivative financial instruments and embedded derivatives
The Company's derivative financial instruments include forward foreign exchange contracts, and are
initially measured at fair value on the date of the derivative contract signed and are subsequently
measured at fair value. A derivative with positive fair value shall be recognised as an asset, otherwise
that with negative fair value shall be recognised as a liability. Any profit or loss arising from changes of
fair value and not compliance with the accounting provision of hedge shall be recognised as profit or
loss for current period.
For the hybrid instrument which includes embedded derivatives, where the host contract is a financial
asset, requirements in relation to the classification of financial assets shall apply to the hybrid instrument
as a whole. Where the host contract is not a financial asset, and the hybrid instrument is not measured
at fair value and its changes are included in the profit and loss for the current period for accounting
purposes, there is no close relation between the embedded derivatives and the host contract in terms of
economic features and risks, and the instrument that has the same condition with the embedded
derivatives and exists independently meets the definition of derivatives, the embedded derivatives shall
be separated from the hybrid instrument and treated as a separate derivative financial instrument. If it is
unable to separately measure the embedded derivatives upon acquisition or on the subsequent balance
sheet date, the hybrid instrument shall be entirely designated as the financial assets or financial liabilities
measured at fair value and whose movements are included in the profit and loss of the current period.
(5) Fair value of the financial instrument
The methods for determining the fair value of the financial assets or financial liabilities are set out in
Note III.11.
(6) Impairment of financial assets
The following items are subject to impairment accounting and recognition of loss allowances based on
expected credit losses:
A. Financial assets measured at amortised cost;
B. Receivables and debt investments that are measured at fair value through other comprehensive
income;
C. Contract assets as defined in the Accounting Standard for Business Enterprises No. 14 – Revenue;
D. Lease receivables;
E. Financial guarantee contracts, except for those carried at fair value through profit or loss, those which
the transfer of financial assets does not satisfy the derecognition condition or those formed as a result of
continued involvement of the transferred financial assets.
Measurement of expected credit loss (ECLs)
The ECL is a weighted average of credit losses on financial instruments weighted at the risk of default.
Credit loss is the difference between all receivable contractual cash flows according to the contract and
all cash flows expected to be received by the Company discounted to present value at the original
effective interest rate, i.e. the present value of all cash shortfalls.
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The Company takes into account reasonable and valid information on past events, current conditions
and forecasts of future economic conditions, with the risk of default as the weight, to calculate the
probabilistic weighted amount of the present value of the difference between the cash flow receivable
from contract and the expected cash flow to be received and recognise the expected credit loss.
The Company respectively measures the expected credit losses of financial instruments by different
stages. If the credit risk of the financial instrument does not increase significantly since the initial
recognition, it would be classified in Stage 1, the Company would measure loss allowance according to
the future 12-month expected credit losses. If the credit risk of a financial instrument has significantly
increased since the initial recognition but not yet credit-impaired, it would be classified in Stage 2, the
Company would measure loss allowance according to the lifetime expected credit losses of that
instrument. If the financial instrument has credit-impaired since the initial recognition, it would be
classified in Stage 3, and the Company would measure loss allowance according to the lifetime expected
credit losses of that instrument.
For financial instruments with lower credit risk on the balance sheet date, the Company assumes that its
credit risk has not increased significantly since the initial recognition, and measures loss allowance
according to the 12-month expected credit losses.
Lifetime ECLs are the ECLs that result from all possible default event over the expected life of a
financial instrument. Future 12-month ECLs are the portion of ECL that results from default events on
a financial instrument that are possible within the 12 months after the balance sheet date (or the expected
life of the instrument, if it is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which
the Company are exposed to credit risk (including the option to renew).
For the financial instruments classified in Stage 1 and Stage 2 and those with lower credit risk, the
Company would measure the interest income by the book balance (that is, without deduction for credit
allowance) and the effective interest rate. For financial instruments classified in Stage 3, the Company
would measure the interest income by the amortised cost (that is, book balance less impairment
allowance) and the effective interest rate.
For notes receivable, trade receivables and contract assets, regardless whether it has significant financing
components or not, the Company has always measured its loss allowance at an amount equal to lifetime
expected credit losses.
If the expected credit losses of one individual financial asset cannot be estimated at a reasonable cost,
the Company classifies notes receivable and trade receivables into portfolios based on credit risk
characteristics, and measures expected credit losses on portfolios basis to determine portfolios by the
following basis:
A. Notes receivable
Bills receivable portfolio 1: Bank acceptance bills
Bills receivable portfolio 2: Commercial acceptance bills
B. Accounts receivables
Accounts receivables portfolio 1: Amount due from domestic customers
Accounts receivables portfolio 2: Amount due from overseas customers
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Accounts receivables portfolio 3: Receivables of consolidated companies
Contract assets
Contract assets portfolio: Sale of products
For bills receivable classified as portfolio, the Company measures expected credit losses based on the
risk exposures of default and lifetime expected credit losses rate with reference to the historical credit
loss experience, current situation and forecasts of future economic conditions.
For accounts receivables classified as portfolio, the Company measures expected credit losses through
preparing a table of concordance between the aging of trade receivables and lifetime expected credit
losses rate with reference to the historical credit loss experience, current situation and forecasts of future
economic conditions.
Other receivables
The Company classifies other receivables into certain portfolios based on credit risk characteristics, and
measures expected credit losses on portfolios basis to determine portfolios by the following basis:
Other receivables portfolio 1: Receivables of export tax refund
Other receivables portfolio 2: Receivables of deposits under guarantee and security deposits and lease
expenses
Other receivables portfolio 3: Other receivables
Other receivables portfolio 4: Receivables of consolidated companies
For other receivables classified as portfolios, the Company measures expected credit losses based on the
risk exposures of default and future 12-month or lifetime expected credit losses rate.
Long-term receivables
The Company's long-term receivables include finance lease receivables and equity transfer receivables.
The Company classifies finance lease receivables and equity transfer receivables into certain portfolios
based on credit risk characteristics, and measures expected credit losses on portfolios basis to determine
portfolios by the following basis:
A. Finance lease receivables
Portfolio of finance lease receivables: other receivables
B. Other long-term receivables
Portfolio of other long-term receivables: equity transfer receivables
For finance lease receivables and equity transfer receivables, the Company measures expected credit
losses based on the risk exposures of default and lifetime expected credit losses rate with reference to
the historical credit loss experience, current situation and forecasts of future economic conditions.
For other receivables and long-term receivables other than finance lease receivables and equity transfer
receivables that are classified as portfolio, the Company measures expected credit losses based on the
risk exposures of default and future 12-month or lifetime expected credit losses rate.
Debt investments and other debt investments
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For debt investments and other debt investments, the Company measures expected credit losses based
on the nature of investments, counterparties and various types of risk exposures and the risk exposures
of default and future 12-month or lifetime expected credit losses rate.
Assessment of significant increase in credit risk
By comparing the risk of default of financial instruments occurring on the balance sheet date and on the
initial recognition date, the Company determines the relative changes in risk of default over the expected
life of financial instruments and assesses whether the credit risk of financial instruments have increased
significantly since the initial recognition.
When determine whether credit risks have significantly increased since the initial recognition, the
Company considers information that is reasonable and supportable, including forward-looking
information that is available without undue cost or effort. The information considered by the Company
includes:
Failure to make payments of principal or interest on debtors' contractually due dates;
An actual or expected significant deterioration in a financial instrument's external or internal credit
rating (if any)
An actual or expected significant deterioration in the operating results of debtors;
Existing or forecast changes in the technological, market, economic or legal environment that have
significant adverse effect on the debtors' abilities to repay to the Company.
Depending on the nature of the financial instruments, the Company assesses whether credit risks have
significantly increased on either an individual financial instrument basis or a collective financial
instrument basis. When the assessment is performed on a collective financial instrument basis, the
Company can classify the financial instruments based on the shared credit risk characteristics, such as
past due information and credit risk ratings.
The Company determines that the credit risk on a financial instrument has increased significantly if it is
more than 30 days past due.
Credit-impaired financial assets
The Company assesses whether financial assets at amortised cost and debt investments measured at fair
value through other comprehensive income are credit-impaired at balance sheet date. A financial asset
is 'credit-impaired' when one or more events that have an adverse impact on the estimated future cash
flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the
following observable information:
Significant financial difficulty of the issuer or debtor;
A breach of contract by debtor, such as a default or delinquency in interest or principal payments;
For economic or contractual reasons relating to the borrower's financial difficulty, the Company having
granted to the borrower a concession that would not otherwise consider;
It is probable that the borrower will enter bankruptcy or other financial reorganization;
The disappearance of an active market for that financial asset because of financial difficulties
Presentation of allowance for ECL
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The Company re-measures the ECLs on each balance sheet date to reflect changes in the financial
instruments' credit risk since initial recognition, and the increase or reversal of the loss provision resulted
therefrom is recognised as an impairment gain or loss in profit or loss. For financial assets measured at
amortised cost, the loss provision is offset against their carrying amounts in the balance sheet. For debt
investments at FVOCI, the Company recognises the loss provision in other comprehensive income and
does not deduct the carrying amount of the financial assets.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that
there is no realistic prospect of recovery. A write-off constitutes a derecognition event. This is generally
the case the Company determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets
that are written off could still be subject to enforcement activities in order to comply with the Company's
procedures for recovery of amounts due.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
(7) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the
transferee) other than the issuer of financial assets.
The Company derecognises a financial asset only if it transfers substantially all the risks and rewards of
ownership of the financial asset to the transferee; the Company should not derecognise a financial asset
if it retains substantially all the risks and rewards of ownership of the financial asset.
The Company neither transfers nor retains substantially all the risks and rewards of ownership, shows
as the following circumstances: if the Company has forgone control over the financial assets,
derecognise the financial assets and verify the assets and liabilities; if the Company retains its control
of the financial asset, the financial asset is recognised to the extent of its continuing involvement in the
transferred financial asset and recognise an associated liability is recognised.
(8) Offsetting financial assets and financial liabilities
When the Company has the legal right to offset recognised financial assets and financial liabilities, and
the legal right can be executed at present, and the Company has a plan to settle the financial assets and
financial liabilities at the same time or at net amount, the financial assets and financial liabilities can be
presented on the balance sheet after offsetting. Except for the above circumstances, financial assets and
financial liabilities cannot be offset and shall be presented separately on the balance sheet.
11. Fair value measurement
The fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.
The Company measures the relevant assets or liability at fair value supposing the orderly transaction of
asset selling or liability transferring incurring in a principal market of relevant assets or liabilities. In the
absence of a principal market for the asset or liability, the Company assumes that the transaction takes
place at the most advantageous market of relevant asset or liability. A principal market (or the most
advantageous market) is the transaction market that the Company can enter into at measurement date.
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The Company implements the hypothesis used by the market participants to realise the maximum
economic benefit in assets or liabilities pricing.
If there exists an active market for the financial assets or financial liabilities, the Company uses the
quotation on the active market as its fair value. For those in the absence of active market, the Company
uses valuation technique to recognise its fair value. However, under limited circumstances, the Company
may use all information about the results and operation of the investee obtained after the date of initial
recognition to determine whether cost represents fair value. Cost may represent the best estimate of fair
value of the relevant financial asset within the scope of distribution, and such cost represents the
appropriate estimate of fair value within the scope of distribution.
For non-financial assets measured at fair value, the Company should consider the capacity of the market
participants to put the assets into optimal use thus generating the economic benefit, or the capacity to
sell assets to other market participants who can put the assets into optimal use and generate economic
benefit.
The Company implements the valuation technique suitable for the current condition and supported by
enough available data and other information, gives priority in use of relevant observable inputs, only the
observable inputs cannot be obtained or impracticable before using unobservable inputs.
For the assets and liabilities measured or disclosed at fair value on financial statements, fair value
hierarchies are categorized into three levels as the lowest level input that is significant to the entire fair
value measurement: Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets
and liabilities. Level 2: inputs are inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly. Level 3: inputs are unobservable inputs
for the asset or liability.
At each balance sheet date, the Company re-evaluates the assets and liabilities recognised to be measured
at fair value on the financial statements to make sure whether conversion occurs between fair value
hierarchies.
12. Inventories
√Applicable □N/A
(1) Classification of inventories
The Company's inventories include raw materials, packaging materials, finished goods, work-in-
progress, low-value consumables, subcontracting materials, inventory goods and expendable
biological assets.
(2) Method of costing
The method of costing of the Company's inventories: Cost of finished goods are measured at planned
cost, and material cost differences are carried forward at the end of the period to adjust planned cost to
actual cost; other inventories are measured at actual cost on acquisition and raw materials received are
accounted for by the weighted-average method; low-value consumables and packaging materials are
amortised in full upon the use.
(3) Method in the determination and the basis of provision for diminution in net realisable value of
inventories
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On the balance sheet date, the inventories are calculated at the lower of cost and the net realisable
value. When the net realisable value is lower than the cost, the provision for diminution in value of
inventories is made on an item-by-item basis at the excess of the cost of the inventory over its net
realisable value. For large volume inventories with low unit price, the provision for diminution in the
value of inventories is made by categories. Inventories that are related to a product line manufactured
and sold in the same region, have the same or similar end use or purpose, and are difficult to measure
separately from other items are consolidated the provision for diminution in the value of inventories.
(4) Inventory system
The Company maintains a perpetual inventory system.
(5) Amortisation methods of consumables
Low-value consumables and packaging materials of the Company are amortised in full when used.
13. Assets held for sale
√Applicable □N/A
(1) Category and measurement of non-current assets or the disposal group held for sale
Non-current assets and disposal groups are classified as held for sale if the Company recovers its book
value mainly by selling (including the exchange of nonmonetary assets with commercial substance)
rather than continuing to use it.
The aforesaid non-current assets do not include investment property measured with the basis of fair
value; the biological assets measured with the basis of fair value less selling costs; the assets formed by
employee benefits; financial assets and the right arising from deferred income tax assets and insurance
contracts.
A disposal group is a group of assets to be disposed through sale or other means as a whole in a single
transaction, and liabilities directly associated with those assets that will be transferred in the transaction.
In certain circumstance, disposal groups include the goodwill obtained through business combination.
Non-current assets and disposal groups that meet the following conditions are classified as held for sale:
according to the practice of disposing of this type of assets or disposal groups in a similar transaction, a
non-current asset or disposal group is available for immediate sale at its present condition; the sale is
likely to occur, that is, a decision has been made on a sale plan and a determined purchase commitment
is made, and the sale is expected to be completed within one year. Where the loss of control over the
subsidiaries is due to the sales of investment in subsidiaries, no matter whether the Company retains part
of the equity investment after selling or not, the investment in subsidiaries shall be classified as held for
sale in the separate financial statements when it satisfies the conditions for category of held for sale; all
assets and liabilities of subsidiaries shall be classified as held for sale in the consolidated financial
statements.
The difference between carrying amount of non-current assets or disposal groups classified as held for
sale and the net amount of fair value less selling costs shall be recognised as impairment loss on assets
upon initial measurement or when such noncurrent assets or disposal groups are remeasured at the
balance sheet date. For the amount of impairment loss on assets recognised in disposal groups, the
carrying amount of disposal groups' goodwill shall be offset against first, and then offset against the
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carrying amount of non-current assets according to the proportion of carrying amount of the individual
non-current assets in the disposal groups.
If on a subsequent balance sheet date, the net amount of the fair value of a held-for-sale disposal group
less its selling costs increases, the amount reduced previously shall be recovered, and reversed in the
asset impairment loss recognised on the noncurrent asset which is applicable to the measurement
requirements of Held-For-Sale Standards after the non-current asset is classified into held-for-sale
category. The reversed amount is credited to current profit or loss. The carrying value of goodwill which
has been offset cannot be reversed.
No depreciation or amortisation is provided for the non-current assets in the held-for-sale and the assets
in the disposal group held for sale. The interest on the liabilities and other costs in the disposal group
held for sale is recognised continuously. As far as all or part of investment in the associates and joint
ventures is concerned, for the part classified into the held-for-sale category, the accounting with equity
method shall be stopped, while the remaining part (which is not classified into the held for- sale category)
shall still be accounted for using the equity method. When the Company loses the significant influence
on the associates and joint venture due to the sale, the use of equity method shall be ceased.
When certain non-current asset or disposal group classified into the held-for-sale category no longer
meets the classification criteria for held-for-sale category, the Company shall stop classifying it into the
held-for-sale category and measure it according to the lower of the following two amounts:
① The carrying amount of the asset of disposal group before it was classified into the held-for-sale
category after being adjusted with the depreciation, amortisation or impairment that could have been be
recognised if it was not classified into the held-for-sale category;
② The recoverable amount.
(2) Discontinued operation
Discontinued operation refers to the component meeting one of the following conditions that has been
disposed of by the Company or classified by the Company into the held-for-sale type and can be
identified separately:
① The component represents an independent principal business or a separate principal business place.
② The component is a part of the related plan for the contemplated disposal of an independent principal
business or a separate principal business place.
③ The component is a subsidiary acquired exclusively for the purpose of resale.
(3) Presentation
The Company presents the non-current assets held for sale and the assets in the disposal group held for
sale under “assets classified as held for sale”, and the liabilities in the disposal group held for sale under
“liabilities classified as held for sale” in the balance sheet.
The Company presents the profit and loss for continuing operation and profit and loss for discontinued
operation in the income statement, respectively. The impairment loss and reversal amount and disposal
profit and loss of the non-current assets held for sale or disposal group not meeting the definition of
discontinued operation will be presented as the profit and loss of continuing operation. The operating
profit and loss (such as impairment loss and reversal amount) and disposal profit and loss of the
discontinued operation will be presented as the profit and loss of the discontinued operation.
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The disposal group proposed for retirement rather than sale and meeting the condition about the relevant
component in the definition of the discontinued operation will be presented as discontinued operation
from the date of retirement.
For the discontinued operation reported in the current period, the information formerly presented as
profit and loss of continuing operation will be presented as the profit and loss of discontinued operation
for the comparable accounting period in the financial statement of the current period. If the discontinued
operation no longer meets the classification criteria for held for- sale category, the information formerly
presented as profit and loss of discontinued operation will be presented as the profit and loss of
continuing operation for the comparable accounting period in the financial statement of the current
period.
14. Long-term equity investment
√Applicable □N/A
The long-term equity investment includes the equity investment in the subsidiary, joint ventures and
associates. The investee over which the Company has significant influence is the associates of the
Company.
(1) Determination of initial investment cost
The long-term equity investment resulting from corporate merger: For the long-term equity investment
resulting from merger of companies under the same control, the carrying amount of the ownership equity
of the merged party obtained on the merger date presented in the consolidated financial statement of the
final controlling party will be used as the investment cost. For the long-term equity investment resulting
from merger of companies under different controls, the merger cost will be used as the investment cost
of the long-term equity investment.
The long-term equity investment obtained by other means: For the long-term equity investment obtained
by paying cash, the actually paid purchase price will be used as the initial investment cost. For the long
term equity investment obtained by issuing equity securities, the fair value of the issued equity securities
will be used as the initial investment cost.
(2) Subsequent measurement and recognition method of profit or loss
The investment in subsidiary will be accounted for using cost method, unless the investment meets the
criteria of held-for-sale category. The investment in associates and joint venture will be accounted with
equity method.
For the long-term equity investment accounted for using cost method, except for the price actually paid
upon the investment or the cash dividend or profit in the consideration that has been declared but not
released, the cash dividend or profit declared and distributed by the investee is recognised as the
investment income and recorded into the profit and loss for the current period.
For the long-term equity investment accounted for using equity method, the investment cost of the long-
term equity investment shall not be adjusted if the initial investment cost of the long-term equity
investment is higher than the Company's share in the fair value of the identifiable net value of the
investee at the time of investment; if the initial investment cost of the long-term equity investment is
lower than the Company's share in the fair value of the identifiable net value of the investee at the time
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of investment, the carrying amount of the long-term equity investment will be adjusted, with the
difference recorded into the profit and loss for the current period of investment.
When accounted for using the equity method, return on investment and other comprehensive income are
recognised according to the share in the investee's realised net profit or loss and other comprehensive
income respectively, and the carrying amount of the long-term equity investment is adjusted. The
carrying amount of the long-term equity investment will be deducted according to the profit distribution
declared by the investee or cash dividend attributable to the Company. The carrying amount of long
term equity investment will be adjusted for changes to equity interest attributable to the owners of the
investee other than net profit or loss, other comprehensive income and profit distribution, and recorded
into capital reserve (other capital reserve). The Company's share of the net profit or loss of the investees
will be recognised after adjustment of the net profit of the investees according to the accounting policy
and accounting period of the Company on the basis of fair value of all identifiable assets of the investee
on acquisition.
If the Company is able to exert significant influence or implement joint control (which does not
constitute control) on the investee through additional investment or other reason, the sum of the fair
value of the original equity plus the additional investment cost will be used as the initial investment cost,
which will be accounted for with equity method, on the conversion date. The difference between the fair
value of the original equity on the conversion date and its carrying amount, and the accumulated change
of fair value recorded into other comprehensive income will be transferred into the profit and loss for
the current period, which will be accounted for using equity method.
If an entity loses joint control or has no significant influence over investees due to the elimination of
parts of the equity investment, the surplus equity after disposal shall be recognised in accordance with
“Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments”, and the difference between fair value and carrying amount should be recognised as profit
or loss for current period. Other comprehensive income of original equity investment recognised under
equity method shall be recognised in accordance with the same foundation used by the investees when
dispose the relevant assets or liabilities directly in the termination of equity method. Other changes of
owners' equity related to the original equity investment shall be transferred into profit or loss for current
period.
If an entity loses control over investees due to the elimination of parts of the equity investment, the
surplus owners' equity that is able to implement joint control or have significant influence over investees
shall be measured at equity method and are deemed to be recognised under equity method since the
acquisition date. The surplus owners' equity that are unable to implement joint control or have no
significant influence over investees shall be processed in accordance with “Accounting Standards for
Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”, and the
difference between fair value and carrying amount at the day of loss of control shall be recognised as
profit or loss for current period.
If the shareholding ratio of the Company is reduced due to the increase of capital of other investors, and
thus the control is lost, but the joint control or significant influence can be exerted on the invested entity,
the Company should recognise net asset according to the new shareholding ratio. The difference between
the original book value of the long-term equity investment corresponding to the decrease in the
shareholding ratio should be included in the current profit and loss; then, according to the new
shareholding ratio, the equity method is used to adjust the investment.
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The Company recognises the unrealised profit or loss of intra-transaction between the joint ventures or
associates that belongs to itself according to the proportion of the shares and recognises the investment
income or loss after offset. However, the loss arising from the unrealised intra-transaction between the
Company and investees, which belongs to the impairment loss of assets transferred, cannot be offset.
(3) Basis of determining common control and significant influence on the investee
Joint control is the contractually agreed sharing of control over an arrangement under which the
decisions relating to any activity require the unanimous consent of the parties sharing control. In
determining whether there is a joint control, the first judge is to determine whether the relevant
arrangement is controlled collectively by all the parties involved or the group of the parties involved.
Secondly, and then determine whether the decisions related to the basic operating activities should
require the unanimous consent of the parties involved. If the parties involved or the group of the parties
involved must act consistently to determine the relevant arrangement, it is considered that the parties
involved or the group of the parties involved control the arrangement. If two or more parties involve in
the collectively control of certain arrangement, it shall not be considered as joint control. Protection of
rights shall not be considered in determining whether there is joint control.
Significant influence refers to the power to participate in the decision making process for financial and
operational policies of the investees without control or common control over the formulation of such
policies. When determining whether it has significant influence over the investee, the influence of the
voting shares of the investee held by the investor directly and indirectly and the potential voting rights
held by the investor and other parties which are exercisable in the current period and converted to the
equity of the investee, including the warrants, stock options and convertible bonds that are issued by the
investee and can be converted in the current period, shall be taken into account.
When the Company owns directly or indirectly through its subsidiaries more than 20% (including 20%)
but less than 50% of the voting shares of the investee, it is generally considered to have significant
influence over the investee, unless there is clear evidence that it cannot participate in the production and
operation decisions of the investee and does not have a significant influence under such circumstances.
When the Company owns less than 20% (excluding) of the voting shares of the investee, it is generally
not considered to have significant influence on the investee unless there is clear evidence that it can
participate in the production and operation decisions of the investee and have significant influence under
such circumstances.
(4) Held-for-sale equity investment
Refer to Note III. 13 for the relevant accounting treatment of the equity investment to joint ventures or
associates all or partially classified as assets held for sale.
The surplus equity investments that are not classified as assets held for sale shall be accounted for using
equity method.
The equity investment to joint ventures or associates already classified as held for sale no longer meets
the conditions of assets held for sale shall be adjusted retroactively using equity method from the date
of being classified as assets held for sale.
(5) Impairment test and impairment provision
Refer to note III. 22 for investment to subsidiaries, associates and joint ventures and the impairment
provision of assets.
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15. Investment properties
Investment properties are properties held to earn rental or capital appreciation or both. The investment
properties of the Company include land use rights that have already been leased out, land use rights that
are held for the purpose of sale after capital appreciation, buildings that have already been leased out,
etc.
Investment properties of the Company are measured initially at cost upon acquisition, and subject to
depreciation or amortisation in the relevant periods according to the relevant provisions on fixed assets
or intangible assets.
The Company adopts the cost model for subsequent measurement of the investment properties. The
method for asset impairment provision is set out in note III. 22.
The balance after the disposal income from the disposal, transfer, scrapping or destruction of the
investment properties deducts the book value and the relevant taxes shall be recorded into the profit and
loss for the current period.
16. Fixed assets
(1) Conditions for recognition of fixed assets
√Applicable □N/A
The Company's fixed assets represent the tangible assets held by the Company using in the production
of goods, rendering of services, rent and for operation and administrative purposes with useful life
over one year.
The fixed asset can be recognised only when the economic benefit related to the fixed asset is probable
to flow into the company and the cost of the fixed asset can be reliably measured.
The Company's fixed assets are initially measured at the actual cost at the time of acquisition.
(2) Method of depreciation
√Applicable □N/A
Category Useful years (year) Annual depreciation Residual rate
Properties and Buildings 20 4.5%-4.75% 5%-10%
Machine and equipment 10 9%-9.5% 5%-10%
Transportation equipment 5 18%-19% 5%-10%
Electric equipment and others 5-10 18%-19% 5%-10%
Where, for the fixed assets for which depreciation provision is made, to determine the depreciation
rate, the accumulated amount of the fixed asset depreciation provision that has been made shall be
deducted.
(3) Refer to note III. 22 for the impairment testing and the impairment provision of fixed assets.
(4) Recognition basis, valuation and depreciation method of financial leased fixed assets
When the Company's leased fixed assets meet one or more of the following criteria, it is recognized as
finance leased fixed assets:
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① At the expiration of the lease term, the ownership of the leased assets is transferred to the Company.
② The Company has the option to purchase leased assets. The agreed purchase price is expected to be
much lower than the fair value of the leased asset when the option is exercised. Therefore, it can be
reasonably determined that the Company will exercise this option on the lease start date.
③ Even if the ownership of the asset is not transferred, the lease term occupies most of the useful life
of the leased asset.
④ The present value of the Company's minimum lease payment on the lease start date is almost
equivalent to the fair value of the leased assets on the lease start date.
⑤The leased assets are of special nature, and only our company can use them if they don't undergo
major transformation.
For fixed assets leased by finance leases, the lower of the fair value of the leased assets on the lease start
date and the present value of the minimum lease payment shall be the entry value. The minimum lease
payment is taken as the entry value of the long-term payable, and the difference is taken as the
unrecognized financing expense. In the process of lease negotiation and signing of the lease contract,
the initial direct costs attributable to the lease item, such as handling fees, attorney fees, travel expenses,
stamp duty, etc., are included in the value of the leased asset. The unrecognized financing costs shall be
amortized by the effective interest method during each period of the lease term.
The fixed assets acquired by finance lease adopt the same policy as self-owned fixed assets to calculate
the depreciation of leased assets. If it can be reasonably determined that the ownership of the leased
asset will be obtained at the end of the lease term, depreciation shall be accrued on the useful life of the
leased asset; if it cannot be reasonably determined that the ownership of the leased asset will be obtained
at the end of the lease term, depreciation is accrued in the shorter of the lease period and the useful life
of the leased asset.
(5) The Company reviews the useful life and estimated net residual value of fixed asset and the
depreciation method applied annually at each of the period end.
The useful lives of fixed asset are adjusted if their expected useful lives are different from the original
estimates; the estimated net residual values are adjusted if they are different from the original estimates.
(6) Overhaul costs
The overhaul costs occurred in regular inspection of fixed assets are recognised in the cost of property,
plant and equipment if there is undoubted evidence to confirm that they meet the recognition criteria of
fixed assets, otherwise, the overhaul costs are recognised in profit or loss for the current period. Property,
plant and equipment are depreciated during the intervals of the regular overhaul.
17. Construction in progress
√Applicable □N/A
Construction in progress is measured at actual cost. Actual cost comprises necessary project expenditure
incurred during construction, borrowing cost that are eligible for capitalisation and other necessary cost
incurred to bring the fixed assets ready for their intended use.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use.
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For provision for impairment of construction in progress, refer to note III. 22.
In the balance sheet, the ending balance of construction materials is presented under “construction in
progress”.
18. Borrowing costs
√Applicable □N/A
(1) Recognition principle of capitalisation of borrowing costs
For borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset, they shall be capitalised and included in the cost of related assets; other borrowing
costs are recognised as expenses and included in profit or loss when incurred. Capitalisation of such
borrowing costs can commence only when all of the following conditions are satisfied:
① Expenditures for the asset incurred, capital expenditure includes the expenditure in the form of cash
payment, transfer of non-cash assets or the interest bearing liabilities for the purpose of acquiring or
constructing assets eligible for capitalisation;
② Borrowing costs incurred;
③ Activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced.
(2) Capitalisation period of borrowing costs
Capitalisation of such borrowing costs ceases when the qualifying assets being acquired, constructed or
produced become ready for their intended use or sale. The borrowing cost incurred after that is
recognised as an expense in the period in which they are incurred and included in profit or loss for the
current period.
Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or
production of a qualifying asset is interrupted abnormally and when the interruption is for a continuous
period of more than 3 months; the borrowing costs in the normally interrupted period continue to
capitalise.
(3) Calculation of the capitalisation rate and amount of borrowing costs
The interest expense of the specific borrowings incurred at the current period, deducting any interest
income earned from depositing the unused specific borrowings in bank or the investment income arising
from temporary investment, shall be capitalised. The capitalisation rate of the general borrowing is
determined by applying the weighted average effective interest rate of general borrowings, to the
weighted average of the excess amount of cumulative expenditures on the asset over the amount of
specific borrowings.
During the capitalisation period, exchange differences on foreign currency special borrowings shall be
capitalised; exchange differences on foreign currency special borrowings shall be recognised as current
profits or losses.
19. Biological assets
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√Applicable □N/A
(1) Determination of biological assets
Biological assets refer to assets comprising living animals and plants. No biological asset shall be
recognised unless it meets the conditions as follows simultaneously:
① An enterprise possesses or controls the biological asset as a result of past transaction or event;
② The economic benefits or service potential concerning this biological asset are likely to flow into
the enterprise;
③ The cost of this biological asset can be measured reliably.
(2) Classification of biological assets
The Company’s biological assets are consumable biological assets which include traditional Chinese
medical herbal plant species.
The consumable biological assets refer to the biological assets held for sale, or biological assets to be
harvested as agricultural products in the future, consisting of growing traditional Chinese medical herbal
plant species. The consumable biological asset is initially measured at cost. The cost of any consumable
biological assets by way of self-planting, self-cultivating, self-breading is the necessary cost directly
attributable to this asset prior to the harvest, consisting of borrowing costs that meet the conditions of
capitalisation. The subsequent expenses for the maintenance, protection and cultivation of a consumable
biological asset after the harvest shall be included in the current profits or loss.
The cost of a consumable biological asset shall, at the time of harvest or sale, be carried over at its book
value by the weighted average method.
(3) Impairment of biological assets
If the net realisable value of the consumable biological assets is lower than their carrying amount,
provision of impairment loss is made and recognised in the profit or loss for the current period as the
excess of the carrying amount over the net realisable value. If the factors affecting the impairment of
consumable biological assets no longer exist, the amount of write-down shall be resumed and shall be
reversed from the original provision for the impairment loss before being recognised in the profit or loss
for the current period.
20. Intangible assets
(1) Pricing methods, useful lives and impairment tests
√Applicable □N/A
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled
by the Company. An intangible asset is recognised only when all of the following conditions are satisfied:
It is probable that the economic benefits associated with the intangible assets will flow to the enterprise;
The cost of the intangible asset can be reliably measured. Intangible assets are initially measured at
actual cost.
The Company's intangible assets include land use rights, patents and proprietary technologies, software,
trademark rights, etc.
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Intangible assets are initially measured at historical cost, and the Company shall make judgement to
determine the useful life of intangible assets upon acquisition. Intangible assets with finite useful life
are amortised in the profit or loss over the estimated useful life, using the method that reflects the
expected realisation of economic benefits associated with the asset, and if the expected realisation cannot
be reliably determined, it is amortised using the straight-line method. Intangible assets with indefinite
useful life is not amortised.
Amortisation of intangible assets with finite useful life is as follows:
Category Expected useful life Amortisation method Note
Land use rights 30-50years Straight-line
Patent and technical know-how 1-10 years Straight-line
Trademark rights 2-10 years Straight-line
Others 5 years Straight-line
The useful life for an intangible asset with a finite useful life and the method of amortisation are
reviewed at least once at the end of each financial year. If the useful life and amortisation method for
the intangible assets are different from the previous estimate, the change of amortisation is recognised
prospectively as the change of accounting estimate.
When the Company estimates an intangible asset can no longer bring future economic benefits to the
Company at the end of a period, the carrying amount in which should be reversed to profit or loss for
the current period.
Please refer to note III. 22 for the provision of impairment of intangible assets.
21. Research and development expenditures
√Applicable □N/A
Expenditures on an internal research and development project are classified into expenditures on the
research phase and expenditures on the development phase.
Expenditures on the research phase shall be recognised in profit or loss for the current period when
incurred.
Expenditures on the development phase will be capitalised only when all of the following conditions are
satisfied: it is technically feasible to complete the intangible asset so that it will be available for use or
sale; the Company intends to complete the intangible asset and use or sell it; it can be demonstrated how
the intangible asset will generate economic benefits, including proving that the intangible assets or the
products produced by it will have markets, or the intangible assets for internal use will be useful; there
are adequate technical, financial and other resources to complete the development and the Company is
able to use or sell the intangible assets; and expenditures on the development phase attributable to the
intangible assets can be reliably measured. The development expenditures that do not satisfy the above
conditions shall be recognised in profit or loss for the current period.
Our research and development projects enter the development stage after meeting the above conditions
and forming the project through the technical and economic feasibility studies.
Capitalised expenditures on the development phase are shown as development expenditures on the
balance sheet and reclassified as intangible assets on the date the project meets the intended purpose.
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Capitalisation conditions for specific research and development projects are as follows:
① For research and development projects that are not required to obtain clinical approvals, the period
from the beginning of research and development to the pilot phase is treated as the research phase, and
all expenditures shall be recognised in profit or loss for the current period when incurred; the period
from the pilot phase to the obtaining of production approvals is treated as the development phase, and
all expenditures shall be recognised as development expenditures and reclassified as intangible assets
after the obtaining of production approvals.
② For research and development projects that require clinical approval, the period from the beginning
of research and development to the obtaining of clinical approval is treated as the research phase, and
all expenditures incurred shall be recognised in profit or loss for the current period when incurred; the
period from the obtaining of clinical approval to the obtaining of production approval is treated as the
development phase, and the expenditures shall be recognised as development expenditures and
reclassified as intangible assets after the obtaining of production approval.
③ External technology transfer fees and the cost of purchasing clinical approvals can be recognised
directly as development expenditures, and subsequent expenditures are accounted for in accordance with
① and ② above.
④ The Company reviews the latest research and development status of each project at the end of each
year and if the research and development project no longer qualifies for the development stage, the
corresponding development expenditure are recognised in profit or loss for the current period.
⑤ Where it is impossible to differentiate the expenditures on the research phase and the expenditures
on the development phase, all the research and development expenditures are recognised in profit or
loss for the current period.
Please refer to note III.22 for the impairment testing methodology and impairment provision for
intangible assets.
22. Impairment of assets
The impairment of subsidiaries, associates and joint ventures in the long-term equity investments,
investment properties subsequently measured at cost, fixed assets, construction in progress, right-of-use
assets, intangible assets, etc. (Excluding inventories, investment properties measured at fair value,
deferred income tax assets and financial assets) are determined as follows:
At the balance sheet date, the Company determines whether there may be evidence of impairment, if
there is any, the Company will estimate the recoverable amount for impairment, and then test for
impairment. For goodwill arising from a business combination, intangible assets with indefinite useful
life and the intangible assets that have not yet ready for use are tested for impairment annually regardless
of whether such evidence exists.
The recoverable amount of an asset is determined by the higher amount of fair value deducting disposal
costs and net present value of future cash flows expected from the assets. The Company estimates the
recoverable amount based on individual asset; for individual asset which is difficult to estimate the
recoverable amount, the recoverable amount of the asset group is determined based on the asset group
involving the asset. The identification of the asset group is based on whether the cash flow generated
from the asset group is independent of the major cash inflows from other assets or asset groups.
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When the asset or asset group’s recoverable amount is lower than its carrying amount, the Company
reduces its carrying amount to its recoverable amount, the reduced amount is included in profit or loss,
while the provision for impairment of assets is recognised.
In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising from business
combination, shall be allocated to the related asset group in accordance with a reasonable basis at
acquisition date. Those that are difficult to be allocated to related assets shall be allocated to related asset
group. Related assets or assets group refer to those that can benefit from the synergies of business
combination and are not larger than the Company’s recognised reporting segment.
When there is an indication that the asset and asset group are prone to impair, the Company should test
for impairment for asset and asset group excluding goodwill and calculate the recoverable amount and
recognise the impairment loss accordingly. The Company should test for impairment for asset or the
asset group including goodwill and compare the asset or asset group’s recoverable amount with its
carrying amount, provision for impairment of assets shall be recognised when the recoverable amount
of assets is lower than its carrying amount.
Once impairment loss is recognised, it cannot be reversed in subsequent accounting periods.
23. Long-term deferred expenses
√Applicable □N/A
The Company’s long-term deferred expenses measured at cost actually incurred and evenly amortised
on straight-line basis over the expected beneficial period. For the long-term deferred expense items that
cannot benefit in subsequent accounting period, their amortised value is recognised through profit or
loss.
24. Employee compensation
(1) The scope of employee compensation
Employee compensation are all forms of remuneration and compensation given by the Company in
exchange for service rendered by employees or the termination of employment. Employee compensation
include short-term employee compensation, post-employment benefits, termination benefits and other
long-term employee benefits. Employee compensation include benefits provided to employees’ spouses,
children, other dependants, survivors of the deceased employees or to other beneficiaries.
According to liquidity, employment compensations are presented separately as “accrued payroll” item
and “long-term employment compensation payable” item in the balance sheet.
(2) Short-term employee compensation
√Applicable □N/A
During the accounting period in which the employees render the related services, wages, bonuses, social
security contributions (including medical insurance, injury insurance, maternity insurance, etc.) and
house funding are recognised as liability and included in the profit or loss for the current period or
related asset costs. If the liability cannot be wholly settled within twelve months after the end of the
annual reporting period in which the employees render the related service and have significant financial
impact, the liability shall be measured as the discounted amounts.
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(3) Post-employment benefits
√Applicable □N/A
Post-employment benefit plans mainly includes defined contribution plans and defined benefit plans.
Defined contribution plans include the basic pension insurance, unemployment insurance, etc., and the
contributions to defined contribution plans are recognised and included in profit or loss for the current
period or related asset costs.
(4) Termination benefits
√Applicable □N/A
The liability of employee compensation arising from termination benefits is recognised and included in
profit or loss for the current period in the earlier date of the followings: The Company cannot unilaterally
withdraw the offer of termination benefits because of an employment termination plan or a curtailment
proposal; the Company recognises costs or expenses related to the restructuring that involves the
payment of termination benefits.
For the implementation of the internal retirement plan for employees, the economic compensation before
the official retirement date is a termination benefit. The wage of and social insurance contributions for
the internally retired employee which would have incurred from the date on which the employee cease
rendering services to the Company to the scheduled retirement date will be included in the profit or loss
for the current period. Economic compensation after the official retirement date (such as normal pension)
should be treated as post-employment benefits.
(5) Other long-term employee benefits
√Applicable □N/A
When other long-term employee benefits provided to the employees by the Company are satisfied the
conditions of a defined contribution plan, those benefits shall be accounted for in accordance with the
relevant provisions of the above defined contribution plans. When the benefits are satisfied the
conditions of a defined benefit plan, those benefits shall be accounted for in accordance with the relevant
provisions of the above defined benefit plans, except that the “change in remeasurement of the net
liability or net assets of the defined benefit plans” in the cost of the related employee compensation shall
be included in profit or loss for the current period or related asset costs.
25. Provision for liabilities
√Applicable □N/A
An obligations related to a contingency is recognised as a provision when all of the following conditions
are satisfied:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the payment to settle the associated obligations
and consider the relevant risk, uncertainty and time value of money. If the impact of time value of money
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is significant, the best estimate is determined as its present value of future cash outflow. The Company
reviews the carrying amount of provisions at the balance sheet date and adjusts the carrying amount to
reflect the best estimate.
If the expenses for clearing of provisions is fully or partially compensated by a third party, and the
compensated amount can be definitely received, it is recognised separately as asset. The compensated
amount recognised shall not be greater than the carrying amount of the liability recognised.
26. Share-based payment and equity instruments
√Applicable □N/A
(1) Accounting treatment of share-based payment
Share-based payments are transactions in which equity instruments are granted or liabilities are assumed
on the basis of equity instruments in order to obtain services from employees or other parties. Share-
based payment is classified into equity-settled share-based payment and cash-settled share-based
payment.
① Equity-settled share-based payment
Equity-settled share-based payment is measured at the fair value of the equity instruments granted to
employees. If vesting is conditional upon completion of services in the pending period or fulfilment of
performance conditions, at each balance sheet date during the pending period, based on the best
estimates of the number of vested equity instruments, the services received for the period are recognised
as the costs or expenses on a straight-line basis. Instruments which are vested immediately upon the
grant are included in relevant costs or expenses at the fair value of equity instruments on the date of
grant and capital reserves are increased accordingly.
At each balance sheet date during the pending period, the Company makes the best estimate and revises
the number of equity instruments expected to be exercisable based on subsequent information such as
changes in the number of exercisable employees obtained from the latest available information. The
effect of the above estimates is recognised as the relevant cost or expense in the current period, and
capital surplus is adjusted accordingly.
For the equity instruments granted under an equity-settled share-based payment for services from other
parties, if the fair value of services received from other parties can be measured reliably, the fair value
of the equity instruments is measured at the fair value of services from other parties on the grant date; if
the fair value of services received from other parties cannot be measured reliably but the fair value of
the equity instruments can be measured reliably, the fair value of the equity instruments on the date on
which services are received shall be recognised as related costs or expenses, with a corresponding
increase in owners' equity.
② Cash-settled share-based payment
Cash-settled share-based payments are measured at the fair value of the liabilities (share-based or other
equity instrument-based) assumed by the Company. Instruments which are vested immediately upon the
grant are included in relevant costs or expenses at the fair value of liabilities assumed by the Company
on the date of grant and liabilities are increased accordingly. If vesting is conditional upon completion
of services in the pending period or fulfilment of performance conditions, at each balance sheet date
during the pending period, based on the best estimates of the vesting situation, the services received for
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the period are recognised as the costs or expenses and corresponding liabilities at fair value of the
liabilities assumed by the Company.
At each balance sheet date and settlement date before the relevant liabilities are settled, the fair value of
liabilities is re-measured and the resulting changes are included in the profit and loss for the current
period.
(2) Accounting treatment for amendment and termination of share-based payments
When the Company modifies the share-based payment plan, and if such modification increases the fair
value of the equity instruments granted, the increase in services received will be recognised accordingly
following the increase in fair value of the equity instruments; if such modification increases the number
of equity instruments granted, the increase in fair value of the equity instruments is recognised as a
corresponding increase in service achieved. The increase in fair value of the equity instruments refers
to the difference in fair value on the date of modification before and after the modification in respect of
the equity instruments. If the modification reduces the total fair value of the share-based payments or
adopts any form that is unfavorable to employees to modify the terms and conditions of the share-based
payment plan, accounting treatment will be continued to be conducted in respect of the services received
and the modification will be deemed to have never occurred, unless the Company had cancelled part or
all of the equity instruments granted.
During the pending period, if the equity instruments granted are cancelled (except for failure to meet the
non-market conditions of the vesting conditions), the Company will undertake an accelerated vesting in
respect of the cancelled equity instruments that had been granted, include the remaining amount that
shall be recognised during the pending period in the current profit and loss immediately and recognise
capital reserve accordingly. Where employees or other parties are permitted to choose to fulfil non-
vesting conditions but have not fulfilled during the pending period, the Company will treat the granted
equity instruments as cancelled.
(3) Accounting treatment for share-based payments involving the Company and the shareholders or the
de facto controller of the Company
For share-based payment transactions involving the Company and the shareholders or the de facto
controller of the Company, the settlement enterprise and the enterprise receiving services (one under the
Company while another external to the Company) shall follow the requirements below to conduct
accounting treatment in the Company’s consolidated financial statements:
① For settlement enterprises settling through their own equity instruments, such share-based payment
transaction will be treated as equity-settled share-based payment; except for this, such share-based
payment transaction will be treated as cash-settled share-based payment.
Where a settlement enterprise is an investor of an enterprise receiving services, the fair value of the
equity instruments on the date of grant or the fair value of the liabilities that shall be assumed are
recognised as long-term equity investment in the enterprise receiving services, at the same time, capital
reserve (other capital reserve) or liabilities are recognised.
② Where an enterprise receiving services has no settlement obligations or grants its own equity
instruments to employees, such share-based payment transaction will be treated as equity-settled share-
based payment; where an enterprise receiving services has settlement obligations and grants equity
instruments (other than its own) to employees, such share-based payment transaction will be treated as
cash-settled share-based payment.
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For a share-based payment transaction occurring among enterprises under the Company where the
enterprise receiving services and the settlement enterprise are not the same enterprise, such share-based
payment transaction shall be recognised and measured in each of the respective financial statements of
the enterprise receiving services and the settlement enterprise by reference to the above principles.
27. Preferred shares, perpetual bonds and other financial instruments
√Applicable □N/A
(1) Classification of financial liabilities and equity instruments
The Company classifies the financial instrument or its components as financial assets, financial
liabilities or equity instruments at the initial recognition based on the contract terms of the issued
financial instrument and the economic substance it reflects, instead of only in legal form, and combine
the definition of financial assets, financial liabilities and equity instruments.
(2) Accounting treatment of preferred shares, perpetual bonds and other financial instruments
The financial instruments issued by the Company are initially recognised and measured in accordance
with the financial instrument standards; thereafter, interest or dividends are accrued or distributed on
each balance sheet date and processed in accordance with relevant specific accounting standards for
enterprises. That is, on the basis of the classification of the financial instrument issued, the accounting
treatment of interest expenses or dividend distributions of the instrument is determined. For financial
instruments classified as equity instruments, interest expenses or dividend distributions are treated as
profit distribution of the Company, and repurchases and cancellations are treated as changes in equity;
for financial instruments classified as financial liabilities, interest expenses or dividend distributions are
in principle treated according to borrowing costs, and gains or losses arising from repurchase or
redemption are credited to profit or loss for the current period.
The transaction costs such as charges and commissions incurred by the Company when issuing financial
instruments, if classified as debt instruments and measured at amortised cost, are included in the initial
measurement amount of the issued instrument; if classified as equity instruments, are deducted from
equity.
28. Revenue
√Applicable □N/A
The Company shall recognise revenue when the Company satisfies the performance obligation of the
contract, that is, the customer obtains control of relevant goods or services.
When the contract contains two or more performance obligations, on the effective date of the contract,
the Company allocates the transaction price to each performance obligation based on the percentage of
respective unit price of a good or service guaranteed by each performance obligation, and the revenue
is measured according to the transaction price allocated to each performance obligation.
If one of the following conditions is fulfilled, the Company satisfies a performance obligation over time;
otherwise, it satisfies a performance obligation at a point in time:
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① When the customer simultaneously receives and consumes the benefits provided by the Company
when the Company performs its obligations under the contract.
② When the customer is able to control the commodity in progress in the course of performance by the
Company under the contract.
③ The product produced by the Company under the contract is irreplaceable and the Company has the
right to payment for performance completed to date during the term of the contract.
For a performance obligation satisfied over time, the Company shall recognise revenue over time by
measuring the process towards complete satisfaction of the performance obligation. When the progress
of performance cannot be reasonably determined, if the costs incurred by the Company are expected to
be recoverable, the revenue will be recognised to the extent of the costs incurred until the progress of
performance can be reasonably determined.
For a performance obligation satisfied at a point in time, the Company shall recognise revenue when the
customer obtains control of relevant goods or services. When determining whether the customer has
obtained control of the goods and services, the Company will consider the following indications:
① The Company has the current right to receive payment for the goods or services, which is when the
customers have the current payment obligations for the goods.
② The Company has transferred the legal title of the goods to the client, which is when the client
possesses the legal title of the goods.
③ The Company has transferred the physical possession of goods to the customer, which is when the
customer obtains physical possession of the goods.
④ The Company has transferred all of the substantial risks and rewards of ownership of the goods to
the customer, which is when the client obtains all of the substantial risks and rewards of ownership of
the goods to the customer.
⑤ When the customer has accepted the goods or services.
⑥ When other information indicates that the customer has obtained control of the goods.
A contract asset represents the Company’s right to consideration in exchange for goods or services that
it has transferred to a customer when that right is conditioned on factors other than passage of time, for
which the loss allowances for expected credit loss is recognised (see Note III.10(6) ). The Company
shall present any unconditional (i.e. if only the passage of time is required) rights to consideration
separately as a receivable. A contract liability is the Company’s obligation to transfer goods or services
to a customer for which the Company has received consideration (or the amount is due) from the
customer.
The contract assets and liabilities under the same contract shall be shown on a net basis. If the net amount
stated in debit balance, it will be presented under the items of “Contract assets” or “Other non-current
assets” according to its mobility; If the net amount stated in credit balance, it will be presented under
the items of “Contract liabilities” or “Other non-current liabilities” according to its mobility.
The Company enters into sales contracts with customers. Revenue from sales is recognised according
to the invoiced amount upon the delivery of goods to the designated carrier or purchaser according to
the orders received from customers; revenue from export sales is recognised mainly by adopting FOB
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mode according to custom declaration upon making declaration for goods and completing the export
procedures.
29. Contract costs
√Applicable □N/A
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to
fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract
with a customer that it would not have incurred if the contract had not been obtained e.g. an incremental
sales commission. The Company recognises as an asset the incremental costs of obtaining a contract
with a customer if it expects to recover those costs. Other costs of obtaining a contract are expensed
when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other accounting
standards, the Company recognises an asset from the costs incurred to fulfil a contract only if those costs
meet all of the following criteria:
① The costs relate directly to an existing contract or to a specifically identifiable anticipated contract,
including direct labour, direct materials, allocations of overheads (or similar costs), costs that are
explicitly chargeable to the customer and other costs that are incurred only because the Company entered
into the contract;
② The costs generate or enhance resources of the Company that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future;
③ The costs are expected to be recovered.
Assets recognised for the incremental costs of obtaining a contract and assets recognised for the costs
to fulfil a contract (the “assets related to contract costs”) are amortised on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the assets relate and
recognised in profit or loss for the current period.
The Company recognises an impairment loss in profit or loss to the extent that the carrying amount of
an asset related to contract costs exceeds:
① Remaining amount of consideration that the Company expects to receive in exchange for the goods
or services to which the asset relates;
② The cost estimated to be happened for the transfer of related goods or services.
The costs of contract performance recognised as assets, if the amortisation period is less than one year
or a normal operating cycle upon the initial recognition, are presented as “Inventories” item, and if the
amortisation period is more than one year or a normal operating cycle upon the initial recognition, are
presented as “Other non-current assets” item.
The contract obtaining costs recognised as assets, if the amortisation period is less than one year or a
normal operating cycle upon the initial recognition, are presented as “Other current assets” item, and if
the amortisation period is more than one year or a normal operating cycle upon the initial recognition,
are presented as “Other non-current assets” item.
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30. Government grants
√Applicable □N/A
A government grant shall be recognised only when the enterprise can comply with the conditions
attaching to the grant and the enterprise can receive the grant.
If a government grant is in the form of a transfer of a monetary asset, the item is measured at the amount
received. If a government grant is in the form of a transfer of a non-monetary asset, the item is measured
at fair value, when fair value is not reliably determinable, the item is measured at a nominal amount of
RMB1.
Government grant related to assets represents the government grant received for acquisition and
construction of long term assets, or forming long term assets in other ways. Except for these, all are
government grant related to income.
Regarding to the government grant not clearly defined in the official documents and can form long term
assets, the part of government grant which can be referred to the value of the assets is classified as
government grant related to assets and the remaining part is government grant related to income. For the
government grant that is difficult to distinguish, the entire government grant is classified as government
grant related to income.
The government grant related to assets is recognised as deferred income and would be transferred to
profit or loss in reasonable and systematic manner within the period of use of the relevant assets. The
government grant related to income which is used to compensate the relevant costs or losses incurred
should be recognised in the profit or loss for the current period; the government grant related to income
which is used to compensate the relevant costs or losses for the subsequent period is recognised as
deferred income and shall be recognised in profit or loss during the relevant cost or loss confirmation
period. Government grants measured in nominal terms are directly included in the profit or loss for the
current period. The Company has adopted a consistent approach to the same or similar government grant
business.
The government grants related to daily activities are recognised as other gains in accordance with the
substance of economic business. Government grants that are not related to daily activities are recognised
as non-operating income and expenses.
If the recognised government grants need to be refunded, adjust the carrying amount of assets when the
carrying amount of assets is offset at the time of initial recognition; the balance of deferred income is
offset against the carrying amount of the balance of deferred income and the excess is recognised in the
profit or loss for the current period. Other circumstances, it is directly recognised in the profit or loss for
the current period.
31. Deferred tax assets and deferred tax liabilities
√Applicable □N/A
(1) Current tax
At the balance sheet date, for the current tax liabilities (or assets) arising from the current period and the
previous period, should be measured by the tax of the estimated payable (returnable) amount which is
calculated according to the regulations of the tax law. The amount of the tax payable which is based by
the calculation of the current tax expenses, are according to the result measured from the corresponding
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adjustment of the pre-tax accounting profit of the current period in accord to the relevant regulations of
the tax law.
(2) Deferred tax assets and deferred tax liabilities
The difference between the carrying amount of an asset or liability and its tax basis, as well as the
temporary differences arising from differences between the carrying amount and tax basis of items that
are not recognised as assets and liabilities but in accordance with the tax law, can be recognised as
deferred tax assets and deferred tax liabilities by adopting the balance sheet liability method.
No deferred tax liability is recognised for a temporary difference arising from the initial recognition of
goodwill the initial recognition of assets or liabilities due to a transaction other than a business
combination, which affects neither accounting profit nor taxable profit (or deductible loss). Besides, no
deferred tax assets well be recognised for the taxable temporary differences related to the investments
in subsidiaries, associates and joint ventures, if the Company can control the time of the reverse of
temporary differences as well as the temporary differences are unlikely to be reversed in the foreseeable
future. Except for the above exceptions, the Company recognises all deferred income tax liabilities
arising from other taxable temporary differences.
The deductible temporary differences the initial recognition of assets or liabilities arising from
transactions that are neither a business combination, nor do they affect accounting profits and taxable
income (or deductible losses), will not be recognised as related deferred income tax assets. In addition,
as for the taxable temporary differences associated with investments in subsidiaries, associates and joint
ventures, if the Company is able to control the timing of the reversal of the temporary differences, and
the temporary differences may not be reversed in the foreseeable future, the related deferred income tax
assets will also not be recognised. Except for the above exceptions, the Company recognises a deferred
tax asset arising from other deductible temporary differences, to the extent that it is probable that taxable
income will be available against which the deductible temporary differences.
The Company recognises a deferred tax asset for the carry-forward of deductible losses and tax credits
to subsequent periods, to the extent that it is probable that future taxable profits will be available against
which deductible losses and tax credits can be utilised.
At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates
that are expected to apply to the period when the asset is realised or the liability is settled in accordance
with the provisions of the tax law.
At the balance sheet date, the Company reviews the carrying amount of a deferred tax asset. If it is
probable that sufficient taxable profits will not be available in future periods to allow the benefit of the
deferred tax asset to be utilised, the carrying amount of the deferred tax asset is reduced. Any such
reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
(3) Tax expenses
The tax expenses comprise current tax and deferred tax.
The rest current tax and deferred tax expenses or revenue should be included into current gains and
losses expect for the current tax and the deferred tax related to the transaction and events that be
confirmed as other comprehensive income or be directly included in the shareholders’ equity which
should be included in other comprehensive income or shareholders’ equity as well as the book value for
adjusting the goodwill of the deferred income tax occurs from the business combination.
(4) Offset of tax
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The current tax assets and liabilities of the Company should be listed by the written-off net amount
which intend to execute the net amount settlement as well as the assets acquiring and liabilities
liquidation at the same time while owns the legal rights of settling the net amount.
The deferred tax assets and liabilities of the Company should be listed as written-off net amount when
having the legal rights of settling the current tax assets and liabilities by net amount and the deferred tax
and liabilities is relevant to the tax which is collected from the same taxpaying bodies by the same tax
collection and administration department or is relevant to the different taxpaying bodies but during each
period which there is significant reverse of the deferred income assets and liabilities in the future and
among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net
amount or are at the same time acquire the asset as well as liquidate the liabilities.
32. Leases
(1) Accounting treatment method of finance leases
√Applicable □N/A
In a financial lease, the Company uses the net investment in leases as the carrying amount of finance
lease receivables at the inception of a lease. The net investment in leases is the sum of the unguaranteed
residual value and the present value of the outstanding lease payment at the inception of a lease,
discounted using the interest rate implicit in the lease. The Company, as the lessor, calculates and
recognises the interest income over each period of the lease term at a fixed periodic interest rate. Variable
lease payments not included in the measurement of the lease liability, which are obtained by the
Company as a lessor, are recognised in profit or loss as incurred.
The termination of recognition and impairment of financial lease receivables is accounted for in
accordance with the provisions of “Accounting Standards for Business Enterprises No. 22 – Recognition
and Measurement of Financial Instrument” and “Accounting Standards for Business Enterprises No. 23
– Transfer of Financial Assets”.
(2) Accounting treatment method of operating lease
√Applicable □N/A
For the rental of operating leases, the Company recognises it in the profit or loss for the current period
on a straight- line basis over each period of the lease term. The initial direct cost incurred in connection
with an operating lease shall be capitalised and amortised on the same basis for recognition of rental
income during the lease term, and shall be included in instalments in the profit or loss for the current
period. The variable lease payment, which is obtained in connection with an operating lease and not
included in the lease receivables, shall be included in the profit and loss for the current period when they
actually occur.
(3) Determination method and accounting treatment method of lease under the new lease standards
√Applicable □N/A
(1) Identification of leases
At the inception of a contract, the Company, as a lessee or lessor, assesses if the customer in a contract
has the right to obtain substantially all the economic benefits from use of the identified assets and the
right to direct the use of the identified assets in the period of use. The Company would identify that a
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contract is a lease, or contains a lease if a party of the contract transfers the right to control the use of
one or more identified assets for a period of time in exchange for consideration.
(2) The Company as the lessee
At the inception of a lease, the Company recognises all its leases as the right-of-use assets and lease
liabilities, except for the short-term leases and the leases of low-value assets which are treated with a
simplified approach.
For the accounting policies on the right-of-use assets, please refer to Note III.33.
Lease liabilities are initially measured based on the present value of outstanding lease payment at the
inception of a lease, discounted using the interest rate implicit in the lease or the incremental borrowing
rate. Lease payment include: fixed payments and in-substance fixed payments, less any lease incentives
(if there is a lease incentive) ; variable lease payment that are based on an index or a rate; the exercise
price of a purchase option if the lessee is reasonably certain to exercise that option; payments of penalties
for terminating the lease option, if the lease term reflects that the lessee will exercise that option; and
amounts expected to be payable under the guaranteed residual value provided by the lessee. The
Company shall subsequently calculate the interest expenses of lease liabilities over the lease term at the
fixed periodic interest rate, and include it into the profit or loss for the current period. Variable lease
payments not included in the measurement of lease liabilities are charged to profit or loss in the period
in which they actually arise.
Short-term lease
Short-term lease refers to the lease that the lease term does not exceed 12 months from the inception of
a lease, and the lease that includes the option of purchase is not a short-term lease.
The Company recognises the amount of lease payments of short-term lease in the cost of the related
asset or the profit or loss for the current period, on a straight-line method over each period of the lease
term.
Leases of low-value assets
For the Leases of low-value assets, the Company chooses to adopt the above simplified treatment
method in accordance with the specific conditions of each lease.
The Company recognised the lease payments for the leases of low-value assets in the relevant asset cost
or the profit or loss for the current period on a straight-line basis over each period of the lease term.
(3) The Company as the lessor
When the Company is the lessor, the lease that substantially transfers all the risks and rewards related
to the ownership of assets is recognised as a finance lease, and leases other than finance leases are
recognised as operating leases.
33. Right-of-use assets
√Applicable □N/A
(1) Recognition condition of right-of-use assets
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The right-of-use assets of the Company are defined as the right of underlying assets in the lease term for
the Company as a lessee.
Right-of-use assets are initially measured at cost as at the commencement date of the lease, which
consists of: the amount of the initial measurement of the lease liability; any lease payments made at or
before the commencement date of the lease less any lease incentives received if any; initial direct
expenses incurred by the Company as a lessee; costs to be incurred by the Company as a lessee in
dismantling and removing a leased asset, restoring the site on which it is located or restoring the leased
assets to the condition required by the terms and conditions of the lease. The Company as a lessee
recognises and measures the costs of demolition and restoration according to “Accounting Standards for
Business Enterprises No.13 – Contingencies”, and subsequently adjusts for any remeasurement of lease
liability.
(2) Depreciation method of right-of-use assets
The Company calculates depreciation on a straight-line basis. Right-of-use assets in which the Company
as a lessee is reasonably certain to obtain ownership of the underlying leased assets at the end of the
lease term are depreciated over the remaining useful life. Otherwise, right-of-use assets are depreciated
over the shorter of the lease term and its remaining useful life.
(3) For methods of impairment testing and provision for impairment for right-of-use assets, please refer
to note III. 22.
34. Repurchase of shares
Prior to cancellation or transfer of shares repurchased, the Company recognises all expenditures arising
from share repurchase as cost of treasury shares in the treasury share account. Considerations and
transaction fee incurred from the repurchase of shares shall lead to the elimination of owners’ equity
and does not recognise profit or loss when shares of the Company are repurchased, transferred or
cancelled.
The difference between the actual amount received and the carrying amount of the treasury stock are
recognised as capital reserve when the treasury stocks are transferred, if the capital reserve is not
sufficient to be offset, the excess amount shall be recognised to offset surplus reserve and undistributed
profit. When the treasury stocks are cancelled, the capital shall be eliminated according to the number
of shares and par value of cancellation shares, the difference between the actual amount received and
the carrying amount of the treasury stock are recognised as capital reserve, if the capital reserve is not
sufficient to be offset, the excess amount shall be recognised to offset surplus reserve and undistributed
profit.
35. Restricted Shares
If the Company grants the restricted shares to incentive participants under the Share Options Incentive
Scheme, the incentive participants subscribe for the shares first. If the unlocking conditions stipulated
in the Share Options Incentive Scheme cannot be fulfilled subsequently, the Company repurchases the
shares at the predetermined price. If the registration and other capital increase procedures for the
restricted shares issued to employees are completed in accordance with relevant regulations, the
Company recognises share capital and capital reserve (or capital premium) based on the subscription
money received from the employees on the grant date; and recognises treasury shares and other payables
for repurchase obligation.
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36. Other significant accounting judgements and estimates
√Applicable □N/A
Significant accounting estimates and critical assumptions adopted by the Company are continually
evaluated based on historical experience and other factors, including expectations of future events that
are believed to be reasonable. The significant accounting estimates and critical assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next accounting year are set out below:
(1) Classification of financial assets
Significant judgements involved in determining the classification of financial assets include analysis of
business mode and characteristics of the contractual cash flows.
Factors considered by the Company in determining the business model of financial assets management
for a group of financial assets include past experience on how financial asset’s performance is evaluated
and reported to key management personnel, how risks affecting the performance of financial asset are
assessed and managed and how managers of related businesses are compensated.
When assessing whether the contractual cash flows of financial assets are consistent with basic lending
arrangement, the Company adopts the following significant judgements: whether the time distribution
or amounts of the principal within the duration may change due to early repayment and other reasons;
whether the interest includes only the time value of money, credit risk, other basic lending risks and the
consideration for cost and profit. For example, the amounts of early repayment only reflect principal
unpaid, the interest based on principal unpaid and reasonable compensation paid for early termination
of a contract.
(2) Measurement of ECL for accounts receivables
The Company calculates ECL of accounts receivables according to their exposure at default and ECL
rate, and determines ECL rate based on probability of default and loss given default. When determining
ECL rate, the Company adopts data like historical credit loss experience in combination with current
situation and forward-looking information to adjust historical data. When considering forward-looking
information, the Company uses indicators including the risk of economic downturn, external market
environment, technology environment and changes on customer situation. The Company periodically
monitors and reviews assumptions relevant to the measurement of ECL.
(3) Impairment of non-current assets other than financial assets (other than goodwill)
The Company determines at the balance sheet date whether there are signs of possible impairment of
non-current assets other than financial assets. For intangible assets that have not yet reached usable
condition, in addition to the annual impairment test, when there are signs of impairment, the impairment
test is also carried out. Other non-current assets, other than financial assets, are tested for impairment
when there are indications that their carrying amount is not recoverable. An impairment occurs when
the carrying amount of an asset or group of assets is higher than the recoverable amount, which is the
present value of the fair value net of disposal costs and projected future cash flows. The net amount of
fair value less disposal costs, is determined by referencing to the agreed sale price or observable market
value of a similar asset in an arm's length transaction, less incremental costs directly attributable to the
disposal of that asset. When projecting the present value of future cash flows, management must estimate
the projected future cash flows of the asset or group of assets and select an appropriate discount rate to
determine the present value of future cash flows.
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(4) Impairment of goodwill
The Company evaluates whether goodwill is impaired at least once a year. This requires an estimate of
the value in use of the asset groups to which the goodwill is allocated. In estimating the value in use, the
Company needs to estimate the future cash flows generated from the asset groups and also to choose an
appropriate discount rate in order to calculate the present value of the future cash flows.
(5) Development costs
Determining the amounts to be capitalised requires the management to make assumptions regarding the
expected future cash flows generated from the relevant assets, discount rates to be applied and the
expected period of benefits.
(6) Deferred tax assets
The deferred income tax assets will be recognised for all unused tax losses to the extent that it is probable
that there will be sufficient taxable profits against which the loss is utilised. This requires the
management to exert numerous judgments to estimate the timing and amount of the future taxable profits
so as to determine the amount of deferred income tax assets to be recognised with reference to the tax
planning strategy.
(7) Revenue recognition
As stated in note III. 28, the Company makes the following significant accounting judgements and
estimates in terms of revenue recognition: identifying customer contracts; estimating the recoverability
of the considerations that are entitled to be obtained by transferring goods to customers; identifying the
performance obligation in the contract; estimating the variable consideration in the contract and
cumulative revenue recognised where it is highly probable that a significant reversal therein will not
occur when the relevant uncertainty is resolved; assessing whether there is a significant financing
component in the contract; estimating the individual selling price of the individual performance
obligation in the contract, etc. The Company makes judgments primarily based on historical experiences
and works. Changes in these significant judgments and estimates may have significant impacts on the
operating income, operating costs, and profit or loss of the current or subsequent periods.
(8) Determination of the fair value of unlisted equity investment
The fair value of unlisted equity investments represents the expected future cash flows discounted at the
prevailing discount rate of items with similar terms and risk characteristics. It requires the Company to
estimate the expected future cash flows and discount rates, and therefore there is uncertainty. Under
limited circumstances, if the information used to determine the fair value is insufficient, or the possible
estimated amount of fair value is widely distributed, and cost represents the best estimate of the fair
value within such scope, the cost may represent an appropriate estimate of the fair value within such
distribution scope.
37. Changes in significant accounting policies and accounting estimates and correction to
accounting errors
(1)Changes in significant accounting policies
□Applicable √N/A
(2)Changes in significant accounting estimates
□Applicable √N/A
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IV. Taxation
1. Major taxes and their tax rates
√Applicable □N/A
Tax category Basis of taxation Statutory tax rate
Value added tax Taxable revenue 3%, 6%, 13%
Urban maintenance and construction tax Turnover tax to be paid 1%, 5%, 7%
Education surcharges Turnover tax to be paid 3%
Local education surcharge Turnover tax to be paid Note 1
Enterprise income tax Taxable profit Note 2
Note 1: The Company and its subsidiaries that are incorporated in Shenzhen and Zhuhai shall pay local
education surcharges that are charged as 2% of the turnover tax payable. Other subsidiaries shall pay local
education surcharges according to the tax rate as specified at their places of incorporation on the basis of
turnover tax payable.
Note 2: The implementation of enterprise income tax rate is as follows:
Disclosure of taxpayers (if any) with different rates of enterprise income tax
√Applicable □N/A
Taxpayer Rate of enterprise income tax (%)
Hong Kong Health Pharmaceutical Industry Company Limited (香港健康药业有限
公司), Livzon Pharmaceutical Biotechnology Co., Ltd. (丽珠医药生物科技有限公
16.5
司), Lian (Hong Kong) Co., Ltd. (丽安香港有限公司), Livzon Biologics Hong
Kong Limited (丽珠生物科技香港有限公司)
0 or 12 (Tax rate is 12% where the
Companhia de Macau Carason Limitada (澳门嘉安信有限公司), Li Zhu (Macau) taxable income is MOP600,000 or more;
Limitada (丽珠(澳门) 有限公司)；Macau Livzon Traditional Chinese Medicine for those with taxable income less than
Modernization Technology Co., Ltd.（澳门丽珠中药现代化科技有限公司） MOP600,000, they are exempted from
income taxes.)
The Company and Shenzhen Taitai Pharmaceutical Industry Co., Ltd. (深圳太太药
业有限公司), Shenzhen Haibin Pharmaceutical Co., Ltd. (深圳市海滨制药有限公
司), Xinxiang Haibin Pharmaceutical Co., Ltd. (新乡海滨药业有限公司), Jiaozuo
Joincare Bio Technological Co., Ltd. (焦作健康元生物制品有限公司), Shanghai
Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限
公司), Guangzhou Joincare Respiratory Medicine Engineering Technology Co., Ltd.
(广州健康元呼吸药物工程技术有限公司), Joincare Haibin Pharmaceutical Co.,
Ltd. (健康元海滨药业有限公司);Livzon Group (丽珠集团) and subsidiaries of
15
Livzon Group, Livzon Group Limin Pharmaceutical Manufacturing Factory (丽珠集
团利民制药厂) . Livzon Group Livzon Pharmaceutical Factory (丽珠集团丽珠制药
厂) . Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. (珠海保
税区丽珠合成制药有限公司), Shanghai Livzon Pharmaceutical Manufacturing Co.,
Ltd. (上海丽珠制药有限公司), Livzon Group Xinbeijiang Pharmaceutical
Manufacturing Inc. (丽珠集团新北江制药股份有限公司). Sichuan Guangda
Pharmaceutical Manufacturing Co., Ltd. (四川光大制药有限公司), Zhuhai Livzon
Diagnostics Inc. (珠海丽珠试剂股份有限公司), Livzon Group Fuzhou Fuxing
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公司), Shanghai Livzon
Biotechnology Co., Ltd. (上海丽珠生物科技有限公司), Livzon Group (Ningxia)
Pharmaceutical Manufacturing Co., Ltd. (丽珠集团(宁夏) 制药有限公司), Livzon
MABPharm Inc. (珠海市丽珠单抗生物技术有限公司), Zhuhai Lihe Medical
Diagnostic Products Co., Ltd. (珠海丽禾医疗诊断产品有限公司), Zhuhai Livzon
Chinese Medicine Modern Technology Co., Ltd. (珠海市丽珠中药现代化科技有限
公司)
Livzon MAB Pharm (US) Inc. (丽珠单抗生物技术(美国) 有限公司) 21
17 or 24 (registered capital of less than
MYR 2.5 million, the tax rate is 17% on
the first profit less than MYR 600,000;
LIVZON BIOLOGICS (MALAYSIA) SDN. BHD.,
the registered capital exceeds MYR 2.5
million or the profit exceeds MYR
600,000, the tax rate is 24%)
Health Investment Holdings Ltd, Joincare Pharmaceutical GroupIndustry Co.,Ltd.,
Livzon International Ventures, Livzon International Ventures I, LivzonInternational 0 (Note1)
Ventures II
Other subsidiaries 25
Note 1: Companies registered in the British Virgin Islands and the Cayman Islands are not subject to
enterprise income tax.
2. Tax incentives
√Applicable □N/A
(1) Preferential value added tax
In accordance with the Announcement on Value Added Tax on Biological Products Sold by Pharmaceutical
Operation Enterprises issued by the State Administration of Taxation (Announcement of State
Administration of Taxation 2012 No. 20) and the Notice of the Ministry of Finance, the General
Administration of Customs, the State Administration of Taxation and the State Drug Administration on the
Value-Added Tax Policies for Anti-Cancer Drugs (Caishui [2018] No. 47), the biological products sold by
the Company are subject to value added tax at 3% by the simple approach.
(2) Preferential enterprise income tax
The Company enjoys the preferential income tax policy for high-tech enterprises for the 3 years from 2022;
The Company's subsidiaries, Shenzhen Taitai Pharmaceutical Co., Ltd. (深圳太太药业有限公司), Shenzhen
Haibin Pharmaceutical Co., Ltd (深圳市海滨制药有限公司), Xinxiang Haibin Pharmaceutical Co., Ltd. (新
乡海滨药业有限公司) and Shanghai Frontier Health Medicine Technology Co., Ltd. (上海方予健康医药
科 技 有 限 公司 ) have re-applied for high-tech enterprise certification in this period. Joincare Haibin
Pharmaceutical Co., Ltd. (健康元海滨药业有限公司) entitled to enjoy preferential income tax policies
applicable to high and new technology enterprises for 3 years with effective from 2021. Jiaozuo Joincare Bio
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Technological Co., Ltd. ( 焦 作 健 康 元 生 物 制 品 有 限 公 司 ), Guangzhou Joincare Respiratory Drug
Engineering Technology Co., Ltd. (广州健康元呼吸药物工程技术有限公司) have re-applied for high-tech
enterprise certification in this period. Livzon Group and its subsidiaries—Livzon Group Limin
Pharmaceutical Manufacturing Factory (丽珠集团利民制药厂), Livzon Group Livzon Pharmaceutical
Factory (丽珠集团丽珠制药厂), Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd. (珠
海保税区丽珠合成制药有限公司), Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd. (上海丽珠
制药有限公司), Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公
司) and Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd. (四川光大制药有限公司) have re-
applied for high-tech enterprise certification in this period. Shanghai Livzon Biotechnology Co., Ltd. (上海
丽珠生物科技有限公司) are entitled to preferential income tax policies applicable to high and new
technology enterprises for 3 years with effective from 2021. Livzon Group Xinbeijiang Pharmaceutical
Manufacturing Inc. (丽珠集团新北江制药股份有限公司), Zhuhai Livzon Diagnostics Inc. (珠海丽珠试剂
股份有限公司) and Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司) entitled to enjoy
preferential income tax policies applicable to high and new technology enterprises for 3 years with effective
from 2022. Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd. (丽珠集团(宁夏) 制药有限
公司) was approved to enjoy the enterprise taxation preference of the Encouraged Industries in Western
China. The above companies were subject to enterprise income tax rate of 15% for the period.
In accordance with Article 27 of the Enterprise Income Tax Law of the People's Republic of China and
Article 86 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's
Republic of China, the business of planting Chinese herbal medicines engaged by the subsidiaries of the
Livzon, Datong Livzon Qiyuan Medicine Co., Ltd. (大同丽珠芪源药材有限公司) and Longxi Livzon
Shenyuan Medicine Co., Ltd. (陇西丽珠参源药材有限公司) are exempted from enterprise income tax.
According to the "Notice of the Ministry of Finance and the State Administration of Taxation on the
Preferential Policies for Enterprise Income Tax in the Hengqin Guangdong-Macao Deep Cooperation Zone"
(Cai Shui [2022] No. 19), enterprise income tax is levied at a reduced rate of 15% for qualified industrial
enterprises located in the Hengqin Guangdong-Macao Deep Cooperation Zone. The Livzon Group’s
subsidiaries, Zhuhai Lihe Medical Diagnostic Products Co., Ltd. (珠海丽禾医疗诊断产品有限公司) and
Zhuhai Livzon Chinese Medicine Modern Technology Co., Ltd. (珠海市丽珠中药现代化科技有限公司)
meet the relevant conditions and are subjected to 15% enterprise income tax rate for the current period.
According to the preferential tax policies for small low-profit enterprises, the portion of annual taxable
income of a small low profit enterprise which does not exceed RMB1 million is subject to enterprise income
tax at a tax rate of 5%.
3. Others
□Applicable √N/A
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V. Notes to the items of consolidated financial statements
1.Cash and bank balances
√Applicable □N/A
Unit: Yuan Currency: RMB
Items Balance at End of the Period Balance at Beginning of the Period
Cash on hand 410,711.67 231,883.95
Bank deposits 14,439,410,683.45 14,792,867,005.08
Other monetary funds 19,968,988.72 15,389,221.93
Total 14,459,790,383.84 14,808,488,110.96
Including: total overseas deposits 1,553,615,124.00 1,491,900,539.35
Other descriptions:
① Other monetary funds are mainly deposits for investments, deposits under guarantee of letter of
guarantee, issuing letters of credit and foreign exchange forward contracts, etc.
② Restricted funds relating to issuing letters of credit and foreign exchange forward contracts, etc. in
other monetary funds were deducted from cash and cash equivalents in the cash flow statement. Apart
from these restricted funds, there is no other charge, pledge or lock up on the balance of cash at bank
and on hand that may limit its use, is kept outside China and may have probable risks in its collection.
Below are the details of the use of restricted monetary funds:
Item 30 June 2023 31 December 2022
Deposits for letter of credit 2,436,523.26 444,032.37
Deposits for bank acceptance bills 1,275,408.99 947,255.39
Deposits for other business 1,120.00 1,120.00
Total 3,713,052.25 1,392,407.76
2. Financial assets held for trading
√Applicable □N/A
（1）Classification
Unit: Yuan Currency: RMB
Balance at the End of the Balance at the Beginning of
Item
Period the Period
Financial asset measured at fair value
90,560,120.03 109,015,664.98
through profit or loss
Including:
Debt instrument investments 943,863.73 934,289.94
Equity instrument investments 89,616,256.30 102,648,863.47
Derivative financial assets 0.00 5,432,511.57
Total 90,560,120.03 109,015,664.98
Other descriptions:
√Applicable □N/A
① The Company's investments in equity instruments and debt instruments for financial assets held for
trading at the End of the Period were listed for trading on Shenzhen Stock Exchange, Hong Kong Stock
Exchange and NASDAQ in the United States. The fair value was determined based on the closing price
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on the last trading day in the Reporting Period.
② Derivative financial assets represent foreign currency forward contracts, futures contracts and
gains from unexpired contracts measured at fair value which were recognised as financial assets as at
the balance sheet date.
（1）No restrictive financial asset measured at fair value through profit or loss was realised in the
closing balance.
（2）No hedging instruments in the closing balance and no hedging transactions have occurred
during the period.
3. Notes receivable
(1) Classified presentation of notes receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Balance at the End of the Period Balance at the Beginning of the Period
Bank acceptance bills 2,170,075,201.62 1,959,985,016.85
Bad debts 0.00 0.00
Total 2,170,075,201.62 1,959,985,016.85
(2) Notes receivable pledged at period end
√Applicable □N/A
Unit: Yuan Currency: RMB
Category Amount pledged at year end
Bank acceptance bills 530,641,682.69
Total 530,641,682.69
As at 30 June 2023, bank acceptance bills with carrying amount of RMB 530,641,682.69(31
December 2022: RMB469,659,266.19) have been used as pledge for opening of bills.
(3) Bills endorsed or discounted to other parties but not yet expired at balance sheet date
√Applicable □N/A
Unit: Yuan Currency: RMB
Derecognised amount at the End Amount not derecognised at the
Category
of the Period End of the Period
Bank acceptance bills not yet
526,352,414.45 0.00
mature but already endorsed
Bank acceptance bills not yet
153,755,208.00 0.00
mature but already discounted
Total 680,107,622.45 0.00
In the current period, the Company discounted bank acceptance bills of RMB 206,754.53 thousand
(previous year: RMB714,219.83 thousand). Since the major risks and rewards such as interest rate risk
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related to these bank acceptance bills have been transferred to the bank, the Company derecognizes the
discounted unexpired bank acceptance bills. Factoring expenses incurred was RMB 1,494.62 thousand
(previous year: RMB 6,657.46 thousand).
(4) Bills transferred into account receivables for non-performance by the issuer as at balance sheet
date of the period
□Applicable √N/A
(5) Disclosure by method of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Provision for bad
Book balance Book balance Provision for bad debts
debts
Category
Expected Carrying value Expected Carrying value
Ratio Ratio
Amount Amount credit loss Amount Amount credit loss
(%) (%)
rate (%) rate (%)
Provision for bad debts
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
on individual item
Including:
Bank acceptance bills 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Provision for bad debts
2,170,075,201.62 100.00 0.00 0.00 2,170,075,201.62 1,959,985,016.85 100.00 0.00 0.00 1,959,985,016.85
on portfolio basis
Including:
Bank acceptance bills 2,170,075,201.62 100.00 0.00 0.00 2,170,075,201.62 1,959,985,016.85 100.00 0.00 0.00 1,959,985,016.85
Total 2,170,075,201.62 100.00 0.00 0.00 2,170,075,201.62 1,959,985,016.85 100.00 0.00 0.00 1,959,985,016.85
Provision for bad debts on individual item:
□ Applicable √ N/A
Provision for bad debt on a collective basis:
√ Applicable □ N/A
Name combination provision project：Bank acceptance bills
Unit: Yuan Currency: RMB
Balance at the End of the Period
Name
Notes receivable Provision for bad debts Expected credit loss rate (%)
Within 1 year 2,170,075,201.62 0 0
Total 2,170,075,201.62 0 0
Recognition criteria and instructions for withdrawing bad debts by combination
□ Applicable √ N/A
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If the provision for bad debts is made in accordance with the general model of expected credit losses,
please refer to other receivables disclosure:
□Applicable √N/A
(6) Provision for bad debts
□Applicable √N/A
(7) Actual write-off of notes receivable in the period
□Applicable √N/A
4. Accounts receivable
(1) Disclosed by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Subtotal within 1 year: 3,224,390,323.16
1-2 years 28,693,652.96
2-3 years 4,656,372.91
3-4 years 2,160,501.98
4-5 years 11,192,993.98
Over 5 years 15,746,072.78
Total 3,286,839,917.77
According to the credit policy of the Company, the Company usually grants a credit period ranging
from 30 to 90 days to customers.
(2) Disclosure by method of provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Book balance Provision for bad debts Book balance Provision for bad debts
Category Expected Expected
Ratio credit Carrying value Ratio credit Carrying value
Amount Amount Amount Amount
(%) loss rate (%) loss rate
(%) (%)
Provision for bad
debts on individual 9,854,599.67 0.30 5,657,914.46 57.41 4,196,685.21 10,454,599.67 0.33 6,257,914.47 59.86 4,196,685.20
item
Including:
Receivables from
9,709,854.02 0.30 5,513,168.81 56.78 4,196,685.21 10,454,599.67 0.33 6,257,914.47 59.86 4,196,685.20
domestic customers
Receivables from
144,745.65 0.00 144,745.65 100.00 0.00 0.00 0.00 0.00 0.00 0.00
overseas customers
Provision for bad
debts on portfolio 3,276,985,318.10 99.70 87,222,914.08 2.66 3,189,762,404.02 3,165,780,437.19 99.67 66,218,272.24 2.09 3,099,562,164.95
basis
Including:
Receivables from
2,725,925,374.52 82.93 79,148,008.90 2.90 2,646,777,365.62 2,659,276,844.47 83.66 60,180,304.43 2.26 2,599,096,540.04
domestic customers
Receivables from
551,059,943.58 16.77 8,074,905.18 1.47 542,985,038.40 506,503,592.72 16.01 6,037,967.81 1.19 500,465,624.91
overseas customers
Total 3,286,839,917.77 100.00 92,880,828.54 2.83 3,193,959,089.23 3,176,235,036.86 100.00 72,476,186.71 2.28 3,103,758,850.15
Provision for bad debt on individual item:
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√Applicable □N/A
Unit: Yuan Currency: RMB
Closing balance
Name Book Provision for Expected credit
Reason of provision
balance bad debts loss rate (%)
Purchase of goods 9,854,599.67 5,657,914.46 57.41 Not expected to be recoverable
Total 9,854,599.67 5,657,914.46 57.41 /
Descriptions of Provision for bad debt on individual item:
□Applicable √N/A
Provision for bad debts on portfolio basis:
√Applicable □N/A
Provision for bad debts on portfolio basis: Receivables from domestic customers
Unit: Yuan Currency: RMB
Closing balance
Ageing Account Provision for Expected credit loss
receivables bad debt rate (%)
Within 1 year: 2,673,370,500.41 52,207,197.80 1.95
1 to 2 years (inclusive of 2 years) 28,686,427.16 5,142,859.52 17.93
2 to 3 years (inclusive of 3 years) 4,656,372.91 2,678,783.10 57.53
3 to 4 years (inclusive of 4 years) 2,160,501.98 2,097,208.02 97.07
4 to 5 years (inclusive of 5 years) 2,594,611.32 2,564,999.72 98.86
Over 5 years 14,456,960.74 14,456,960.74 100.00
Total 2,725,925,374.52 79,148,008.90 2.90
Standards of provision for bad debts on portfolio basis and descriptions thereof:
□Applicable √N/A
Provision for bad debts on portfolio basis: Receivables from overseas customers
Unit: Yuan Currency: RMB
Closing balance
Ageing Account Provision for Expected credit loss
receivables bad debt rate (%)
Within 1 year: 551,052,717.78 8,073,460.02 1.47
1 to 2 years (inclusive of 2 years) 7,225.80 1,445.16 20.00
Total 551,059,943.58 8,074,905.18 1.47
Standards of provision for bad debts on portfolio basis and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,
please refer to other receivables disclosure:
□Applicable √N/A
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(3) Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Changes for the current period
Beginning Closing
Category Recovery Removal/write-
balance Provision Others balance
or reversal off
Provision for
72,476,186.71 20,935,155.87 0.00 537,700.06 7,186.02 92,880,828.54
bad debts
Total 72,476,186.71 20,935,155.87 0.00 537,700.06 7,186.02 92,880,828.54
At 30 June 2023 and 31 December 2022, the Company had no overdue but not impaired accounts
receivable.
Significant recovery or reversal of bad debt provision for the current period:
□Applicable √N/A
(4) Actual write-off of accounts receivable in this period
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount written-off
Accounts receivable actually written off 537,700.06
Significant accounts receivable that are written off:
□Applicable √N/A
Descriptions of write-off of accounts receivable:
□Applicable √N/A
(5) Accounts receivable due from the top five debtors
√Applicable □N/A
As of 30 June 2023, the total amount of the top five debtors in closing balance is RMB321,299,912.04,
accounting for 9.78% of the total amount of closing balance of accounts receivable, and the corresponding
closing balance of provision for bad debts is total RMB7,349,948.86.
(6) Accounts receivable derecognized due to the transfer of financial assets in each reporting period.
□Applicable √N/A
(7) Assets or liabilities formed by the continuing involvement of transferred accounts receivables in each
reporting period.
□Applicable √N/A
Other descriptions:
□Applicable √N/A
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5. Prepayments
(1) Disclosure of prepayments by aging analysis
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year 305,775,902.09 83.71 343,457,382.98 94.29
1 to 2 years 53,870,750.44 14.75 16,867,695.41 4.63
2 to 3 years 2,277,462.13 0.62 948,519.54 0.26
Over 3 years 3,369,585.21 0.92 2,991,544.64 0.82
Total 365,293,699.87 100.00 364,265,142.57 100.00
(2) Prepayments due from the top five debtors
√Applicable □N/A
As of 30 June 2023, the total amount of the top five prepayments in closing balance is
RMB123,487,227.51, accounting for33.80% of the total amount of closing balance of prepayments.
Other descriptions:
□Applicable √N/A
6. Other receivables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Dividends receivable 40,304,700.46 0.00
Other receivables 65,140,046.50 52,535,740.14
Total 105,444,746.96 52,535,740.14
Other descriptions:
□Applicable √N/A
Dividends receivable
(1) Dividends receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the
Item Balance at the Beginning of the Period
Period
Kunlun Energy Company Limited 264,700.46 0.00
Tianjin Tongrentang Group Co., Ltd. 40,040,000.00 0.00
Total 40,304,700.46 0.00
(2) Significant dividends receivable aged over 1 year.
□Applicable √N/A
(3) Provision made for bad debts
√Applicable □N/A
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At the End of the Period, provision for bad debts on those in first stage:
Expected credit loss rate for Provision for Carrying
Category Book balance Reason
the next 12 months(%) bad debts amount
Provision for bad debts
40,304,700.46 0.00 0.00 40,304,700.46
on individual item
Expected to be
Dividends receivable 40,304,700.46 0.00 0.00 40,304,700.46
recovered
Total 40,304,700.46 0.00 0.00 40,304,700.46
Other receivables
□Applicable √N/A
Other receivables
(1) Disclosed by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Subtotal within 1 year 62,129,686.89
1 to 2 years 3,885,765.11
2 to 3 years 3,346,403.49
3 to 4 years 2,182,615.17
4 to 5 years 744,277.02
Over 5 years 32,254,415.62
Total 104,543,163.30
(2) Disclosure by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of Balance at the Beginning of
Item
the Period the Period
Security deposits, deposits and rental fees 10,995,397.90 12,668,692.36
Reserved fund and advances 36,198,615.71 25,494,468.62
Related party balances 1,552,455.94 1,097,855.07
External entities balances 10,936,496.20 13,226,352.58
Tax refund on exports 11,068,188.29 16,539,609.68
Treasury bonds and security deposits 17,968,386.04 17,968,386.04
Others 15,823,623.22 3,812,338.32
Total 104,543,163.30 90,807,702.67
(3) Information of provision for bad debts
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss
Provision for bad debt Expected Expected credit loss Total
for lifetime (no credit
credit loss for lifetime (credit
impairment occurred)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
within 12 impairment has
months occurred)
Beginning balance 0.00 9,793,858.02 28,478,104.51 38,271,962.53
Movement of beginning
balance during the period
--transfer to second stage 0.00 0.00 0.00 0.00
--transfer to third stage 0.00 -223,851.98 223,851.98 0.00
--Reverse to second stage 0.00 0.00 0.00 0.00
--Reverse to first stage 0.00 0.00 0.00 0.00
Provision for the year 0.00 1,300,635.82 0.00 1,300,635.82
Reversal in the year 0.00 0.00 26,400.00 26,400.00
Transfer in the year 0.00 0.00 0.00 0.00
Write-off in the year 0.00 0.00 223,851.98 223,851.98
Other movement 0.00 15,580.93 65,189.50 80,770.43
Closing balance 0.00 10,886,222.79 28,516,894.01 39,403,116.80
At the End of the Period, No provision for bad debts on those in first stage.
At the End of the Period, provision for bad debts on those in second stage:
Expected credit
Provision for bad
Category Book balance loss rate for the Carrying amount Reason
debts
lifetime(%)
Provision for bad debts on
0.00 0.00 0.00 0.00
individual item
Provision for bad debts on
76,026,269.29 14.32 10,886,222.79 65,140,046.50
portfolio basis
Export tax refund receivable 11,068,188.29 3.32 367,132.06 10,701,056.23
Security deposits, deposits and
10,995,397.90 26.03 2,862,178.09 8,133,219.81
rental receivable
Other receivables 53,962,683.10 14.19 7,656,912.64 46,305,770.46
Total 76,026,269.29 14.32 10,886,222.79 65,140,046.50
At the End of the Period, provision for bad debts on those in third stage:
Expected credit loss
Provision for bad Carrying
Category Book balance rate for the Reason
debts amount
lifetime(%)
Provision for bad debts on
28,516,894.01 100.00 28,516,894.01 0.00
individual item
Not expected to be
Other receivables 28,516,894.01 100.00 28,516,894.01 0.00
recoverable
Provision for bad debts on
0.00 0.00 0.00 0.00
portfolio basis
Total 28,516,894.01 100.00 28,516,894.01 0.00
As of 31 December 2022, information of provision for bad debts:
As of 31 December 2022, No Provision for bad debts on those in first stage.
As of 31 December 2022, Provision for bad debts on those in second stage:
Expected credit
Provision for bad
Category Book balance loss rate for the Carrying amount Reason
debts
lifetime(%)
Provision for bad debts on
0.00 0.00 0.00 0.00
individual item
Provision for bad debts on
62,329,598.16 15.71 9,793,858.02 52,535,740.14
portfolio basis
Export tax refund receivable 16,539,609.68 1.76 290,344.77 16,249,264.91
Security deposits, deposits
12,668,692.36 28.52 3,613,600.49 9,055,091.87
and rental receivable
Other receivables 33,121,296.12 17.78 5,889,912.76 27,231,383.36
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Expected credit
Provision for bad
Category Book balance loss rate for the Carrying amount Reason
debts
lifetime(%)
Total 62,329,598.16 15.71 9,793,858.02 52,535,740.14
As of 31 December 2022, Provision for bad debts on those in third stage:
Expected credit
Provision for bad Carrying
Category Book balance loss rate for the Reason
debts amount
lifetime(%)
Provision for bad debts on
28,478,104.51 100.00 28,478,104.51 0.00
individual item
Not expected to
Other receivables 28,478,104.51 100.00 28,478,104.51 0.00
be recoverable
Provision for bad debts on
0.00 0.00 0.00 0.00
portfolio basis
Total 28,478,104.51 100.00 28,478,104.51 0.00
Descriptions of the significant changes in the gross carrying amount of other receivables for which the
changes in loss allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk of
financial instruments have increased significantly:
□Applicable √N/A
(4) Actual written-off of other receivables in this period
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount written off
Other receivables actually written off 223,851.98
Significant other receivables that are written off:
□Applicable √N/A
Descriptions of write-off of other receivables:
□Applicable √N/A
(5) Other receivables due from the top five debtors
√Applicable □N/A
Unit: Yuan Currency: RMB
Other Proportion to Provision for
Name of entity Nature receivables Ageing total other bad debts
Closing balance receivables (%) Closing balance
Treasury bonds and
Hua Xia Securities Co., Ltd. 17,968,386.04 Over 5 years 17.19 17,968,386.04
security deposits
Tax refund on exports Export tax refund 11,068,188.29 Within 2 years 10.59 367,132.06
Guangzhou Yinhe Sunshine
Loan 5,000,000.00 Over 5 years 4.78 5,000,000.00
Biological Products Co., Ltd.
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Suzhou Sino Imp.& Exp.
Security deposits 2,150,000.00 Over 3 years 2.06 74,250.00
Co., Ltd.
Jiaozuo Yangsen Trading
Security deposits 1,174,630.34 Over 5 years 1.12 1,174,630.34
Co., Ltd.
Total / 37,361,204.67 35.74 24,584,398.44
(6) Receivables involving government subsidies
□Applicable √N/A
(7) Other receivables derecognised due to the transfer of financial assets
□Applicable √N/A
(8) Assets or liabilities formed by the continuing involvement of transferred other receivables：
□Applicable √N/A
Other descriptions
□Applicable √N/A
7. Inventories
(1) Inventories by category
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Provision for Provision for
Item
Book balance diminution Carrying amount Book balance diminution Carrying amount
in value in value
Raw materials 632,393,396.16 28,682,906.99 603,710,489.17 642,893,858.16 37,543,320.41 605,350,537.75
Packaging
134,682,255.54 11,249,787.36 123,432,468.18 137,488,629.87 11,191,692.58 126,296,937.29
materials
Goods in process
and Proprietary
798,166,154.01 86,722,717.73 711,443,436.28 649,362,917.78 65,482,989.52 583,879,928.26
semi-finished
goods
Low-value
103,244,084.59 260,524.03 102,983,560.56 80,473,347.95 495,743.41 79,977,604.54
consumables
Finished goods
1,305,985,264.09 23,279,507.09 1,282,705,757.00 1,138,363,946.23 22,354,857.60 1,116,009,088.63
and stock goods
Sub-contracting
1,952,145.59 0.00 1,952,145.59 2,318,531.50 0.00 2,318,531.50
materials
Consumptive
14,671,473.02 0.00 14,671,473.02 13,692,837.04 0.00 13,692,837.04
biological assets
Goods in transit 9,515,968.65 0.00 9,515,968.65 34,344,534.56 0.00 34,344,534.56
Total 3,000,610,741.65 150,195,443.20 2,850,415,298.45 2,698,938,603.09 137,068,603.52 2,561,869,999.57
(2) Provision for diminution in value of inventories and provision for diminution in value of contract
performance costs
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Increase during the Period Decrease during the Period Balance at the
Item Beginning Reversal or End of the
of the Period Provision Others Others Period
written-off
Raw materials 37,543,320.41 2,995,579.91 0.00 11,855,993.33 0.00 28,682,906.99
Packaging
11,191,692.58 2,027,096.21 0.00 1,969,001.43 0.00 11,249,787.36
materials
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Goods in
process and
Proprietary 65,482,989.52 23,859,293.66 0.00 2,619,565.45 0.00 86,722,717.73
semi-finished
goods
Low-value
495,743.41 1,158,623.99 0.00 1,393,843.37 0.00 260,524.03
consumables
Finished goods
22,354,857.60 10,015,530.95 0.00 9,090,881.46 0.00 23,279,507.09
and stock goods
Total 137,068,603.52 40,056,124.72 0.00 26,929,285.04 0.00 150,195,443.20
Provision for decline in value of inventories (Continued)
Reason for reversal or written-off of
Basis in determination of net recoverable provision for decline in value of
Item
amount/residual value and cost to be incurred inventories/ Provision for impairment of
contract performance cost
The estimated selling price less the estimated costs of
Raw materials Processing, sale of finished goods and discard
completion, selling expenses and related taxes
The estimated selling price less the estimated costs of
Packaging materials Processing, sale of finished goods and discard
completion, selling expenses and related taxes
Goods in process
The estimated selling price less the estimated costs of
and Proprietary Processing of finished goods and discard
completion, selling expenses and related taxes
semi-finished goods
Low-value
The estimated selling price less the related taxes Used or discard
consumables
Finished goods and The estimated selling price less the estimated selling
Sale and discard
stock goods expenses and related taxes
(3) Descriptions at the End of the Period of inventories including capitalised amount of borrowing costs
□Applicable √N/A
(4) Description of amortization amount of contract performance cost in the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
8. Non-current assets due within one year
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Balance at the Beginning of
Item
Period the Period
Long-term receivables due within one year 0.00 0.00
Time deposits due within 1 year 55,066,666.67 54,048,611.11
Total 55,066,666.67 54,048,611.11
Significant debt investments and other debt investments at the end of the period:
□Applicable √N/A
9. Other current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Beginning of the
Item Balance at the End of the Period
Period
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Input VAT pending deduction /Input tax
51,349,452.39 35,679,462.66
pending for verification
Prepaid income tax 14,773,784.81 17,665,709.39
Cash Management 98,970,691.50 92,815,738.44
Cost of returns receivable 12,043,428.52 12,043,428.52
Others 2,529,662.74 5,335,561.31
Total 179,667,019.96 163,539,900.32
10. Long-term equity investment
√Applicable □N/A
Unit: Yuan Currency: RMB
Movement during the Period
Closing
Balance at Investment Adjustment in Announced
Decrease Changes Provision Balance at the balance of
Investee the Beginning Additions in gain or loss other distribution of
in of other for Others End of the Period provision for
of the Period investment under equity comprehensive cash dividend
investment equity impairment impairment
method income or profit
I. Subsidiaries
Zhongshan
Renhe Health
6,337,823.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6,337,823.35 6,337,823.35
Products Co.,
Ltd.
Guangzhou
Hiyeah Industry 1,949,893.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,949,893.45 1,949,893.45
Co., Ltd.
Subtotal 8,287,716.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8,287,716.80 8,287,716.80
II. Associates
Livzon Medical
Electronic
Equipment 1,200,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,200,000.00 1,200,000.00
(Plant) Co.,
Ltd.
Guangdong
Blue Treasure
93,084,766.28 0.00 0.00 7,123,513.81 0.00 0.00 0.00 0.00 0.00 100,208,280.09 0.00
Pharmaceutical
Co. Ltd.
Shenzhen City
Youbao
1,496,595.40 0.00 0.00 160,208.11 0.00 0.00 0.00 0.00 0.00 1,656,803.51 0.00
Technology
Co., Ltd.
AbCyte
Therapeutics 13,767,260.06 0.00 0.00 -1,011,802.73 0.00 0.00 0.00 0.00 0.00 12,755,457.33 0.00
Inc.
L&L
Biopharma, Co. 13,903,676.49 0.00 0.00 -657,044.41 0.00 0.00 0.00 0.00 0.00 13,246,632.08 0.00
Ltd.
Zhuhai Sanmed
61,291,769.61 0.00 0.00 -9,964,795.62 0.00 0.00 0.00 0.00 0.00 51,326,973.99 0.00
Biotech Inc.
Aetio
Biotheraphy, 16,034,314.68 0.00 0.00 -452,987.59 0.00 0.00 0.00 0.00 0.00 15,581,327.09 0.00
Inc.
Jiangsu Atom
Bioscience and
92,803,409.42 0.00 0.00 -3,635,306.07 0.00 10,840.09 0.00 0.00 0.00 89,178,943.44 0.00
Pharmaceutical
Co., Ltd.
Tianjin
Tongrentang 726,580,281.08 0.00 0.00 48,579,279.42 0.00 0.00 40,040,000.00 0.00 0.00 735,119,560.50 0.00
Group Co., Ltd.
Infinite
Intelligence
18,857,727.08 0.00 0.00 -698,434.04 0.00 0.00 0.00 0.00 0.00 18,159,293.04 0.00
Pharmaceutical
Co. Ltd.
Shenzhen
Kangti
Biomedical 6,000,000.00 4,000,000.00 0.00 -37,820.11 0.00 0.00 0.00 0.00 9,962,179.89 0.00
Technology
Co., Ltd.
Jiaozuo Jinguan
Jiahua Electric 285,538,495.52 0.00 0.00 3,807,951.04 0.00 0.00 0.00 0.00 0.00 289,346,446.56 0.00
Power Co., Ltd.
Ningbo
Ningrong
27,179,209.51 0.00 0.00 -158,884.43 0.00 0.00 0.00 0.00 0.00 27,020,325.08 0.00
Biomedical
Co., Ltd.
Feellife Health
15,303,495.74 0.00 0.00 1,179,937.17 0.00 0.00 0.00 0.00 0.00 16,483,432.91 0.00
Inc.
Jiangsu Baining
28,732,381.11 0.00 0.00 837,520.76 0.00 0.00 0.00 0.00 0.00 29,569,901.87 0.00
Yingchuang
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Medical
Technology
Co., Ltd.
Shanghai Sheo
Pharmacerutical
19,309,212.61 0.00 0.00 -246,854.02 0.00 0.00 0.00 0.00 0.00 19,062,358.59 0.00
Technology
Co., Ltd.
Haisong
Precision Parts
0.00 1,500,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,500,000.00 0.00
(Taicang) Co.,
Ltd.(Note 1)
Subtotal 1,421,082,594.59 5,500,000.00 0.00 44,824,481.29 0.00 10,840.09 40,040,000.00 0.00 0.00 1,431,377,915.97 1,200,000.00
Total 1,429,370,311.39 5,500,000.00 0.00 44,824,481.29 0.00 10,840.09 40,040,000.00 0.00 0.00 1,439,665,632.77 9,487,716.80
Other descriptions:
Note 1: On 15 March 2021, Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公
司) (“Shanghai Frontier”), a subsidiary of the Company, signed an investment agreement with Haisong Precision Parts (Taicang)
Co., Ltd. (海嵩精密零部件(太仓)有限公司) (“Haisong Precision”). Shanghai Frontier proposes to contribute RMB3,230,000
and hold 35% equity of Haisong Precision (with the Phase-I contribution of RMB1,500,000). Pursuant to the shareholder
agreement and the articles of association, Shanghai Frontier will appoint one director of Haisong Precision. As Shanghai
Frontier can have significant effect on Haisong Precision, the investment in Haisong Precision is accounted as long-term equity
investment.
11. Other equity instrument investments
(1) Descriptions of other equity investment
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Beginning of the
Item Balance at the End of the Period
Period
Shanghai Yunfeng Xinchuang Equity Investment
67,932,735.87 67,935,704.36
Center
Shanghai JingYi Investment Center 72,891,151.99 73,616,359.91
Qianhai Equity Investment Fund 251,543,869.00 243,378,742.17
Apricot Forest, Inc 120,788,500.00 120,788,500.00
Chengdu JinRui Foundation Biotechnology Co.,
20,000,000.00 0.00
Ltd.
Zhuhai China Resources Bank Co., Ltd. 158,400,000.00 158,400,000.00
GLOBAL HEALTH SCIENCE 246,961,521.36 271,980,388.15
Nextech V Oncology S.C.S., SICAV-SIF 18,034,888.35 23,996,121.32
Yizun Biopharmaceutics (Shanghai) Co., Ltd. 30,513,209.27 30,513,209.27
ELICIO THERAPEUTICS, INC. 9,087,715.05 34,823,014.36
CARISMA THERAPEUTICS, INC. 45,520,870.86 34,821,295.50
Beijing Luzhu Biotechnology Co., Ltd. 83,485,178.24 53,654,738.60
Shanghai Keentai Biotechnology Co., Ltd. 12,000,000.00 12,000,000.00
Others 55,767,994.59 68,050,805.41
Total 1,192,927,634.58 1,193,958,879.05
(2) Descriptions of investments in non-trading equity instruments
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount
Reason for
transferred
Dividend transfer as fair
from other Reason for
income Cumulative Cumulative value through
Item comprehensive the
recognized for gains losses other
income to designation
the Period comprehensive
retained
income
earning
Shanghai Yunfeng
Xinchuang Equity 0.00 0.00 0.00 0.00 non-trading
Investment Center
Shanghai JingYi
0.00 0.00 0.00 0.00 non-trading
Investment Center
179 / 265
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Qianhai Equity
0.00 0.00 0.00 0.00 non-trading
Investment Fund
Apricot Forest, Inc 0.00 0.00 0.00 0.00 non-trading
Chengdu JinRui
Foundation
0.00 0.00 0.00 0.00 non-trading
Biotechnology Co.,
Ltd.
Zhuhai China
Resources Bank 0.00 0.00 0.00 0.00 non-trading
Co., Ltd.
GLOBAL
HEALTH 17,709,895.19 0.00 0.00 0.00 non-trading
SCIENCE
Nextech V
Oncology S.C.S., 0.00 0.00 0.00 0.00 non-trading
SICAV-SIF
Yizun
Biopharmaceutics
0.00 0.00 0.00 0.00 non-trading
(Shanghai) Co.,
Ltd.
ELICIO
THERAPEUTICS, 0.00 0.00 0.00 0.00 non-trading
INC.
CARISMA
THERAPEUTICS, 0.00 0.00 0.00 0.00 non-trading
INC.
Beijing Luzhu
Biotechnology Co., 0.00 0.00 0.00 0.00 non-trading
Ltd.
Shanghai Keentai
Biotechnology Co., 0.00 0.00 0.00 0.00 non-trading
Ltd.
Others 0.00 0.00 0.00 0.00 non-trading
Total 17,709,895.19 0.00 0.00 0.00
Other descriptions:
□Applicable √N/A
12. Investment properties
Measurement of investment properties
(1) Investment properties measured at cost
Unit: Yuan Currency: RMB
Item Housing and buildings Total
I. Book value:
1. Beginning balance 61,914,754.28 61,914,754.28
2.Increase 0.00 0.00
3.Decrease 0.00 0.00
4.Closing balance 61,914,754.28 61,914,754.28
II. Accumulated depreciation and amortisation
1.Beginning balance 55,723,278.85 55,723,278.85
2.Increase 0.00 0.00
(1) Amortisation for the year
3.Decrease 0.00 0.00
(1) Disposal
4. Closing balance 55,723,278.85 55,723,278.85
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III. Provision for impairment
1.Beginning balance 0.00 0.00
2.Increase 0.00 0.00
(1) Provision 0.00 0.00
3. Decrease 0.00 0.00
(1) Disposal 0.00 0.00
4.Closing balance 0.00 0.00
IV. Carrying amount
1.Carrying value at period end 6,191,475.43 6,191,475.43
2.Carrying value at beginning of the period 6,191,475.43 6,191,475.43
(2) Investment properties whose title certificate has not completed:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
13. Fixed assets
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Beginning
Item Balance at the End of the Period
of the Year
Fixed assets 5,203,199,498.59 5,265,200,110.91
Fixed assets for disposal 0.00 0.00
Total 5,203,199,498.59 5,265,200,110.91
Fixed assets
(1) Details of fixed assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Electronic
Housing and Machinery and
Item Motor vehicles equipment and Total
buildings equipment
others
I. Book value:
1.Beginning balance 4,305,054,019.02 5,637,544,484.73 106,291,576.88 856,552,473.06 10,905,442,553.69
2.Increase 14,409,214.37 212,826,051.65 6,316,978.34 41,725,652.00 275,277,896.36
(1) Purchase 1,178,647.55 45,700,594.29 5,063,095.64 17,254,796.59 69,197,134.07
(2) Transfer from
construction in 13,230,566.82 167,125,457.36 0.00 19,244,917.18 199,600,941.36
progress
(3) Changes in
0.00 0.00 805,832.74 5,193,524.57 5,999,357.31
business merger
(4) Others 0.00 0.00 448,049.96 32,413.66 480,463.62
3.Decrease 225,272.42 6,055,902.27 2,358,365.71 3,878,689.30 12,518,229.70
(1) Disposal or
225,272.42 6,055,902.27 2,358,365.71 3,878,689.30 12,518,229.70
scrap
(2) Others 0.00 0.00 0.00
4.Closing balance 4,319,237,960.97 5,844,314,634.11 110,250,189.51 894,399,435.76 11,168,202,220.35
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II. Accumulated
depreciation
1.Beginning balance 1,806,888,229.17 3,109,967,392.10 82,170,130.55 538,254,242.39 5,537,279,994.21
2.Increase 95,783,017.77 189,528,756.68 5,049,519.17 43,078,940.54 333,440,234.16
(1) Provision 95,783,017.77 189,528,756.68 3,998,932.75 39,103,823.83 328,414,531.03
(2) Changes in
0.00 0.00 602,536.46 3,942,703.05 4,545,239.51
business merger
(3)Other increase 0.00 0.00 448,049.96 32,413.66 480,463.62
3.Decrease 202,745.18 3,947,374.74 2,036,893.14 2,474,867.09 8,661,880.15
(1) Disposal or
202,745.18 3,947,374.74 2,036,893.14 2,474,867.09 8,661,880.15
scrap
(2) Others 0.00 0.00 0.00 0.00 0.00
4.Closing balance 1,902,468,501.76 3,295,548,774.04 85,182,756.58 578,858,315.84 5,862,058,348.22
III. Provision for
impairment
1.Beginning balance 26,474,491.83 57,549,501.09 0.00 18,938,455.65 102,962,448.57
2.Increase 0.00 0.00 0.00 0.00 0.00
(1) Provision 0.00 0.00 0.00 0.00 0.00
3.Decrease 0.00 17,897.06 0.00 177.97 18,075.03
(1) Disposal or
0.00 17,897.06 0.00 177.97 18,075.03
scrap
4.Closing balance 26,474,491.83 57,531,604.03 0.00 18,938,277.68 102,944,373.54
IV. Carrying
amount
1.Carrying value at
2,390,294,967.38 2,491,234,256.04 25,067,432.93 296,602,842.24 5,203,199,498.59
period end
2.Carrying value at
beginning of the 2,471,691,298.02 2,470,027,591.54 24,121,446.33 299,359,775.02 5,265,200,110.91
period
(2) Fixed assets with temporary idle
√Applicable □N/A
Unit: Yuan Currency: RMB
Accumulated Provision for
Item Book value Carrying amount Note
depreciation impairment
Housing and buildings 23,926,279.99 15,096,166.69 5,155,770.80 3,674,342.50
Machinery and
157,053,168.18 107,108,974.67 35,957,973.60 13,986,219.91
equipment
Electronic equipment
2,529,359.60 2,064,729.22 167,401.17 297,229.21
and others
Total 183,508,807.77 124,269,870.58 41,281,145.57 17,957,791.62
(3) Fixed assets held under finance leases
□Applicable √N/A
(4) Fixed assets leased out under operating leases
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying Amount
Housing and buildings 1,388,823.73
(5) Fixed assets without property certificate
√Applicable □N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Unit: Yuan Currency: RMB
Item Carrying Amount Reason for pending for certificate of ownership
Housing and buildings 167,321,294.13 Application in progress
Other descriptions
□Applicable √N/A
Disposal of fixed assets
□Applicable √N/A
14. Construction in progress
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Construction in progress 941,543,760.31 810,835,273.97
Construction materials 464,794.99 464,794.99
Total 942,008,555.30 811,300,068.96
Construction in progress
(1) Descriptions of construction in progress
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Haibin Pharma Pingshang
169,982,198.67 11,068,266.54 158,913,932.13 133,771,969.05 11,068,266.54 122,703,702.51
New Factory
Guangda New Factory
404,619,421.41 0.00 404,619,421.41 360,963,893.27 0.00 360,963,893.27
Project
Fuxing Company Phase I &
30,491,744.08 0.00 30,491,744.08 38,842,449.73 0.00 38,842,449.73
II Projects and others
Project of Shijiao New
23,806,304.97 0.00 23,806,304.97 12,409,895.73 0.00 12,409,895.73
Factory
Transformation Project of
Pharmaceutical Factory 74,126,138.66 0.00 74,126,138.66 70,972,186.23 0.00 70,972,186.23
Workshop
Construction Project for
Microsphere Workshop
(including Gose) of Livzon 38,727,287.07 0.00 38,727,287.07 39,976,590.91 0.00 39,976,590.91
Group Livzon
Pharmaceutical Factory
P06 Construction Project of
Livzon Group Livzon 0.00 0.00 0.00 180,053.79 0.00 180,053.79
Pharmaceutical Factory
Project of lyophilized powder
0.00 0.00 0.00 1,157,559.47 0.00 1,157,559.47
injection workshop
P04/P05 Construction Project
of Livzon Group Livzon 1,586,060.52 0.00 1,586,060.52 0.00 0.00 0.00
Pharmaceutical Factory
Technology transformation
project for Microsphere 15,364,843.69 0.00 15,364,843.69 1,560,960.52 0.00 1,560,960.52
Phase II of Shanghai Livzon
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Jiaozuo new factory
36,513,524.20 0.00 36,513,524.20 34,677,843.69 0.00 34,677,843.69
relocation project
Others 157,563,844.04 169,340.46 157,394,503.58 127,559,478.58 169,340.46 127,390,138.12
Total 952,781,367.31 11,237,607.00 941,543,760.31 822,072,880.97 11,237,607.00 810,835,273.97
(2) Changes in significant construction in progress
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance Proportion of
Balance at the
at the Transfer to Other cumulative
Project item Budget Increase End of the
Beginning fixed assets decrease input to
Period
of the Period budget %
Haibin Pharma Pingshang New
1,436,107,400.00 133,771,969.05 93,985,923.16 55,735,456.28 2,040,237.26 169,982,198.67 75.24
Factory
Guangda New Factory Project 536,882,000.00 360,963,893.27 43,655,528.14 0.00 0.00 404,619,421.41 80.96
Fuxing Company Phase I & II
378,090,800.00 38,842,449.73 23,745,621.59 32,061,560.52 34,766.72 30,491,744.08 95.38
Projects and others
Project of Shijiao New Factory 377,005,000.00 12,409,895.73 11,396,409.24 0.00 0.00 23,806,304.97 92.94
Transformation Project of
306,558,388.48 70,972,186.23 47,400,607.13 44,246,654.70 0.00 74,126,138.66 76.63
Pharmaceutical Factory Workshop
Construction Project for
Microsphere Workshop
262,445,000.00 39,976,590.91 893,805.33 2,143,109.17 0.00 38,727,287.07 89.71
(including Gose) of Livzon Group
Livzon Pharmaceutical Factory
P06 Construction Project of Livzon
Group Livzon Pharmaceutical 117,710,000.00 180,053.79 331,155.40 511,209.19 0.00 0.00 95.3
Factory
Project of lyophilized powder
143,500,000.00 1,157,559.47 426,344.85 1,583,904.32 0.00 0.00 95.4
injection workshop
P04/P05 Construction Project of
Livzon Group Livzon 126,880,000.00 1,560,960.52 25,100.00 0.00 0.00 1,586,060.52 1.25
Pharmaceutical Factory
Technology transformation project
for Microsphere Phase II of 40,500,000.00 34,677,843.69 31,000.00 19,344,000.00 0.00 15,364,843.69 85.7
Shanghai Livzon
Jiaozuo new factory relocation
159,981,900.00 0.00 36,513,524.20 0.00 0.00 36,513,524.20 22.82
project
Others - 127,559,478.58 81,175,675.65 43,975,047.18 7,196,263.01 157,563,844.04 -
Total 3,885,660,488.48 822,072,880.97 339,580,694.69 199,600,941.36 9,271,266.99 952,781,367.31 /
（Continued）
Including: interest
Cumulative amount Interest capitalisation Source of
Project item Progress capitalised in the
of interest capitalised rate for the year (%) fund
year
Self-funding
Completion of
Haibin Pharma Pingshang New Factory 0.00 0.00 0.00 and funds
some projects
raised
Under
Guangda New Factory Project 0.00 0.00 0.00 Self-funding
construction
Fuxing Company Phase I & II Projects and Completion of
0.00 0.00 0.00 Self-funding
others some projects
Self-funding
Completion of
Project of Shijiao New Factory 0.00 0.00 0.00 and funds
some projects
raised
Transformation Project of Pharmaceutical Completion of
0.00 0.00 0.00 Self-funding
Factory Workshop some projects
Construction Project for Microsphere Self-funding
Completion of
Workshop (including Gose) of Livzon Group 0.00 0.00 0.00 and funds
some projects
Livzon Pharmaceutical Factory raised
P06 Construction Project of Livzon Group
Completed 0.00 0.00 0.00 Self-funding
Livzon Pharmaceutical Factory
Self-funding
Project of lyophilized powder injection
Completed 0.00 0.00 0.00 and funds
workshop
raised
P04/P05 Construction Project of Livzon Group Under
0.00 0.00 0.00 Self-funding
Livzon Pharmaceutical Factory construction
Technology transformation project for Completion of
0.00 0.00 0.00 Self-funding
Microsphere Phase II of Shanghai Livzon some projects
Under
Jiaozuo new factory relocation project 0.00 0.00 0.00 Self-funding
construction
Others - 0.00 0.00 0.00 Self-funding
Total 0.00 0.00 0.00 -
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Other decrease is mainly transferred to long-term deferred expenses.
(3). Provision for impairment of construction in progress in the current period
□Applicable √N/A
Other descriptions:
□Applicable √N/A
15. Right-of-use assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Housing and buildings Total
I. Book value:
1.Beginning balance 78,335,855.53 78,335,855.53
2.Increase 14,230,427.76 14,230,427.76
(1) Leasing 14,230,427.76 14,230,427.76
3.Decrease 3,505,411.89 3,505,411.89
4. Closing balance 89,060,871.40 89,060,871.40
II. Accumulated depreciation
1.Beginning balance 36,492,721.56 36,492,721.56
2.Increase 15,820,079.48 15,820,079.48
(1) Provision 15,820,079.48 15,820,079.48
3.Decrease 3,505,411.89 3,505,411.89
4.Closing balance 48,807,389.15 48,807,389.15
III. Provision for impairment
1.Beginning balance 0.00 0.00
2.Increase 0.00 0.00
3.Decrease 0.00 0.00
4.Closing balance 0.00 0.00
IV. Carrying amount
1.Carrying value at period end 40,253,482.25 40,253,482.25
2.Carrying value at beginning of the period 41,843,133.97 41,843,133.97
Other descriptions:
As of 30 June 2023, the Company recognised lease expenses related to short-term leases and the leases of
low value assets of RMB314.73 million.
16. Intangible assets
(1) Details of intangible assets
√Applicable □N/A
Unit: Yuan Currency: RMB
185 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Patent and
Trademark
Item Land use rights technical know- Software Others Total
rights
how
I. Book value
1.Beginning balance 442,251,561.19 1,015,955,570.54 93,252,884.14 62,769,716.98 10,985,294.53 1,625,215,027.38
2.Increase 0.00 179,140,231.36 228,532.13 0.00 0.00 179,368,763.49
(1) Purchase 0.00 100,000.00 228,532.13 0.00 0.00 328,532.13
(2) Internal R&D 0.00 179,040,231.36 0.00 0.00 0.00 179,040,231.36
3.Decrease 0.00 5,524,303.12 1,933,014.92 0.00 0.00 7,457,318.04
4.Closing balance 442,251,561.19 1,189,571,498.78 91,548,401.35 62,769,716.98 10,985,294.53 1,797,126,472.83
II. Accumulated
amortisation
1.Beginning balance 132,119,481.74 542,409,896.29 63,402,361.15 62,765,668.27 6,682,720.82 807,380,128.27
2.Increase 4,709,915.83 225,024,874.61 4,092,149.76 235.86 549,264.73 234,376,440.79
Provision 4,709,915.83 225,024,874.61 4,092,149.76 235.86 549,264.73 234,376,440.79
3.Decrease 0.00 5,524,303.12 1,933,014.92 0.00 0.00 7,457,318.04
4.Closing balance 136,829,397.57 761,910,467.78 65,561,495.99 62,765,904.13 7,231,985.55 1,034,299,251.02
III. Provision for
impairment
1.Beginning balance 981,826.94 14,737,946.42 0.00 0.00 0.00 15,719,773.36
2.Increase 0.00 0.00 0.00 0.00 0.00 0.00
Provision 0.00 0.00 0.00 0.00 0.00 0.00
3.Decrease 0.00 0.00 0.00 0.00 0.00 0.00
4.Closing balance 981,826.94 14,737,946.42 0.00 0.00 0.00 15,719,773.36
IV. Carrying amount
1.Carrying value at
304,440,336.68 412,923,084.58 25,986,905.36 3,812.85 3,753,308.98 747,107,448.45
period end
2.Carrying value at
309,150,252.51 458,807,727.83 29,850,522.99 4,048.71 4,302,573.71 802,115,125.75
beginning of the period
The proportion of intangible assets created due to the internal R&D in the balance of intangible assets at the
End of the Period is 48.26%
(2) Intangible assets pending for certificates of ownership
□Applicable √N/A
Other descriptions
√Applicable □N/A
The land use rights represent the state-owned land use rights obtained by the Company in accordance with
PRC laws in China, and the term of grant will be 50 years commencing from the date of obtaining the land
use rights
17. Development Costs
√Applicable □N/A
Unit: Yuan Currency: RMB
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Increase for the Period Decrease for the Period
Balance at the Balance at the
Internal Recognised in
Item Beginning of Other Recognized as End of the
development profit or loss in
the Period increase intangible assets Period
costs the year
Chemical
136,857,815.87 178,549,474.93 0.00 24,807,895.94 0.00 290,599,394.86
pharmaceuticals
Biologics 238,227,636.57 0.00 0.00 145,802,628.07 0.00 92,425,008.50
APIs and others 53,199,431.73 571,180.24 0.00 8,429,707.35 0.00 45,340,904.62
Total 428,284,884.17 179,120,655.17 0.00 179,040,231.36 0.00 428,365,307.98
Other descriptions:
Time for commencement of Progress of research and development
Item Specific basis of capitalisation
capitalisation at year end
Chemical pharmaceuticals Clinical trial Obtain approval for clinical trial Clinical stage
Biologics Clinical trial Obtain approval for clinical trial Clinical stage
APIs and others Pilot stage Pilot related information Post-pilot stage
18. Goodwill
(1) Book value of goodwill
√Applicable □N/A
Unit: Yuan Currency: RMB
Increase for the Period Decrease for the Period
Balance at the Balance at
Name of investee or matter from Formation by
Beginning of the End of
which goodwill arose business Others Disposal Others
the Period the Period
combination
Shanghai Livzon Pharmaceutical
2,045,990.12 0.00 0.00 0.00 0.00 2,045,990.12
Manufacturing Co., Ltd.
Zhuhai FTZ Livzon Hecheng
Pharmaceutical Manufacturing Co., 3,492,752.58 0.00 0.00 0.00 0.00 3,492,752.58
Ltd.
Sichuan Guangda Pharmaceutical
13,863,330.24 0.00 0.00 0.00 0.00 13,863,330.24
Manufacturing Co., Ltd.
Livzon Group Xinbeijiang
7,271,307.03 0.00 0.00 0.00 0.00 7,271,307.03
Pharmaceutical Manufacturing Inc.
Livzon Group Fuzhou Fuxing
46,926,155.25 0.00 0.00 0.00 0.00 46,926,155.25
Pharmaceutical Co., Ltd.
Livzon Group Livzon Pharmaceutical
47,912,269.66 0.00 0.00 0.00 0.00 47,912,269.66
Factory
Livzon Group 395,306,126.41 0.00 0.00 0.00 0.00 395,306,126.41
Shenzhen Haibin Pharmaceutical Co.,
91,878,068.72 0.00 0.00 0.00 0.00 91,878,068.72
Ltd.
Joincare Daily-Use & Health Care
1,610,047.91 0.00 0.00 0.00 0.00 1,610,047.91
Co., Ltd.
Shenzhen Taitai Pharmaceutical Co.,
635,417.23 0.00 0.00 0.00 0.00 635,417.23
Ltd.
Health Pharmaceuticals (China)
23,516,552.65 0.00 0.00 0.00 0.00 23,516,552.65
Limited
Shenzhen Hiyeah Industry Co., Ltd 6,000,000.00 0.00 0.00 0.00 0.00 6,000,000.00
Jiaozuo Joincare Bio Technological
92,035.87 0.00 0.00 0.00 0.00 92,035.87
Co., Ltd.
Shanghai Zhongtuo Pharmaceutical
0.00 21,870,805.09 0.00 0.00 0.00 21,870,805.09
Technology Co., Ltd.
Total 640,550,053.67 21,870,805.09 0.00 0.00 0.00 662,420,858.76
(2) Provision for impairment of goodwill
√Applicable □N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Unit: Yuan Currency: RMB
Balance at the Decrease for the Balance at the
Investee or matters formed the Increase for the Period
Beginning of Period End of the
goodwill
the Period Provision Others Disposal Others Period
Livzon Group Xinbeijiang
Pharmaceutical Manufacturing 7,271,307.03 0.00 0.00 0.00 0.00 7,271,307.03
Inc.
Livzon Group Fuzhou Fuxing
11,200,000.00 0.00 0.00 0.00 0.00 11,200,000.00
Pharmaceutical Co., Ltd.
Shenzhen Hiyeah Industry Co.,
6,000,000.00 0.00 0.00 0.00 0.00 6,000,000.00
Ltd
Joincare Daily-Use & Health
1,610,047.91 0.00 0.00 0.00 0.00 1,610,047.91
Care Co., Ltd.
Total 26,081,354.94 0.00 0.00 0.00 0.00 26,081,354.94
(3) Relevant information regarding the asset portfolio and set of asset portfolios to which the goodwill
belongs
√Applicable □N/A
Goodwill of the Company arose from its business combination involving enterprises not under common
control.
(4) Descriptions of the process of goodwill impairment testing, key parameters (such as the growth rate
of the forecast period, the growth rate of the stable period, the profit rate, the discount rate and the
forecast period, etc. when the present value of future cash flows are expected, if applicable) and the
recognition method of the impairment losses on goodwill
√Applicable □N/A
On the balance sheet date, the Company conducts an impairment test on goodwill. When estimating the
recoverable amount of input costs, it uses an assets group related to goodwill to estimate the present
value of future cash flows.
The estimated future cash flow of asset groups is calculated according to the five-year financial budget
plan made by the management, the cash flows in the years beyond the five-year budget plan remain
stable.
Key assumptions of discounted future cash flow for goodwill impairment test are as follows:
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill
of Livzon Group, key assumptions are a gross margin of 63.27%-63.46% and a business revenue growth
rate of 0-9.08% as well as a cash flow discount rate of 12.21%. The management took into account
historical conditions and predictions for future market development in making the above assumptions.
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill
of Shenzhen Haibin Pharmaceutical Co., Ltd. (深圳市海滨制药有限公司), key assumptions are a gross
margin of 38.91%-40.11% and a business revenue growth rate of -9.19~2.79% as well as a cash flow
discount rate of 11.78%. The management took into account historical conditions and predictions for
future market development in making the above assumptions.
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill
of Livzon Group Livzon Pharmaceutical Factory(丽珠集团丽珠制药厂), key assumptions are a gross
margin of 82.19%-83.33% and a business revenue growth rate of 0~7.83% as well as a cash flow
discount rate of 14.72%. The management took into account historical conditions and predictions for
future market development in making the above assumptions.
For the calculation of estimated present value of future cash flow of the asset groups related to goodwill
of Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd. (丽珠集团福州福兴医药有限公司), key
assumptions are a gross margin of 63.43%-64.44% and a business revenue growth rate of 0~11.80% as
well as a cash flow discount rate of 15.04%. The management took into account historical conditions
and predictions for future market development in making the above assumptions.
As tested, the management of the Company expects that no impairment provision is needed during the
period.
(5) The impact of goodwill impairment test
□Applicable √N/A
Other descriptions:
□Applicable √N/A
19. Long-term deferred expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the
Other Balance at the End
Item Beginning of the Increase Amortisation
decrease of the Period
Period
Renovation costs
32,404,898.26 1,882,339.34 3,287,024.57 0.00 31,000,213.03
of offices
Renovation costs
177,270,511.39 15,024,467.04 17,436,584.11 0.00 174,858,394.32
of plants
Others 68,192,307.30 40,341,777.00 31,388,065.74 0.00 77,146,018.56
Total 277,867,716.95 57,248,583.38 52,111,674.42 0.00 283,004,625.91
20. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offsetting
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Deductible Deductible timing
Deferred tax assets Deferred tax assets
timing differences differences
Provision for impairment of
337,089,020.61 51,580,954.99 336,502,793.26 51,790,732.85
assets
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Accrued expenses 902,905,879.26 135,624,380.46 965,912,234.46 145,014,131.32
Deductible tax loss 418,979,415.49 64,476,849.75 399,128,528.63 61,021,514.54
Deferred income 370,621,002.86 55,608,150.43 329,970,021.95 49,511,503.29
Unrealised gains from intra-
501,321,768.50 75,328,292.69 694,726,037.62 104,182,311.29
company transactions
Changes in fair value of
other equity instrument 179,876,717.01 44,924,244.73 146,540,719.40 36,635,179.85
investments
Deductible difference
arising from share incentive 150,186,553.14 22,602,225.48 107,474,309.53 16,149,104.44
expenses
Changes in fair value of
financial assets held for 28,168,669.24 4,660,606.50 7,298,819.37 1,234,418.76
trading
Other deductible temporary
455,485,646.12 68,322,846.91 455,485,646.11 68,322,846.92
difference
Total 3,344,634,672.23 523,128,551.94 3,443,039,110.33 533,861,743.26
(2) Deferred tax liabilities before offsetting
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Taxable timing Deferred tax Taxable timing Deferred tax
difference liabilities difference liabilities
Changes in fair value of
financial assets held for 14,753,682.98 2,213,052.45 20,269,315.67 3,216,065.39
trading
Accelerated depreciation
1,127,824,349.83 170,134,703.63 1,094,571,545.41 167,757,444.03
of fixed assets
Changes in fair value of
other equity instrument 274,168,629.71 47,069,458.91 242,925,303.81 39,399,916.06
investments
Unrealised gains from
intra-company 105,940,000.00 20,791,000.00 105,940,000.00 20,791,000.00
transactions
Total 1,522,686,662.52 240,208,214.99 1,463,706,164.89 231,164,425.48
(3) Deferred income tax assets or liabilities listed as net amount after offset
□Applicable √N/A
(4) Details of unrecognized deferred tax assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Deductible temporary difference 301,489,517.89 239,109,485.46
Deductible tax losses 3,241,798,031.09 2,804,958,759.64
Total 3,543,287,548.98 3,044,068,245.10
(5) Expiry of deductible tax losses in subsequent period
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Balance at the Beginning of
Year Note
Period the Period
2023 181,799,154.76 182,300,762.40 /
2024 385,138,859.92 385,139,111.62 /
2025 262,456,724.50 253,044,280.36 /
2026 398,033,727.51 390,203,263.39 /
2027 1,452,004,008.76 1,485,158,186.92 /
2028 442,037,468.37 0.00 /
Indefinite 120,328,087.27 109,113,154.95 /
Total 3,241,798,031.09 2,804,958,759.64
Other descriptions:
□Applicable √N/A
21. Other non-current assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Provision
Item Provision for
Book Balance Carrying amount Book Balance for Carrying amount
impairment
impairment
Term deposit
1,037,535,481.51 0.00 1,037,535,481.51 812,562,286.58 0.00 812,562,286.58
and interests
VAT carry
3,338,552.19 0.00 3,338,552.19 3,338,552.19 0.00 3,338,552.19
forward
Prepayment for
acquisition of
295,988,669.79 0.00 295,988,669.79 340,456,344.22 0.00 340,456,344.22
project and
equipment
Prepayment for
acquisition of
1,600,000.00 0.00 1,600,000.00 415,000.00 0.00 415,000.00
technical know-
how
Total 1,338,462,703.49 0.00 1,338,462,703.49 1,156,772,182.99 0.00 1,156,772,182.99
22. Short-term loans
(1) Short-term loans by category
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Unsecured loans 2,116,000,000.00 2,089,585,755.20
Guaranteed loans 10,000,000.00 36,464,859.86
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Total 2,126,000,000.00 2,126,050,615.06
(2) Overdue short-term loans
□Applicable √N/A
Other descriptions:
□Applicable √N/A
23. Financial liabilities held for trading
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Balance at
Item Beginning of the Increase Decrease the End of
Period the Period
Financial liabilities held for trading 755,634.43 20,888,614.43 0.00 21,644,248.86
Including:
Derivative financial liabilities 755,634.43 20,888,614.43 0.00 21,644,248.86
Total 755,634.43 20,888,614.43 0.00 21,644,248.86
Other descriptions:
Derivative financial liabilities represent foreign currency forward contracts. The loss from unexpired
onerous contracts measured at fair value on balance sheet date was recognised as financial liabilities
held for trading.
24. Notes payable
√Applicable □N/A
Unit: Yuan Currency: RMB
Type Balance at the End of the Period Balance at the Beginning of the Period
Bank acceptance bills 1,729,003,530.95 1,635,906,989.22
Total 1,729,003,530.95 1,635,906,989.22
The total of bills payable due but not yet paid during the period is RMB 0.00.
25. Accounts payable
(1) Presentations of accounts payable
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Within 1year 766,124,196.07 815,158,453.21
Over 1 year 58,215,993.26 128,747,127.70
Total 824,340,189.33 943,905,580.91
(2) Significant accounts payable aged aging over one year
□Applicable √N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Other descriptions:
□Applicable √N/A
26. Contract liabilities
(1) Descriptions of contract liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Within 1 year 64,934,759.90 260,935,024.18
Over 1 year 27,613,072.22 32,042,706.56
Total 92,547,832.12 292,977,730.74
(2) Significant changes in the carrying amount during the Reporting Period and reasons therefor
□Applicable √N/A
Other descriptions:
√Applicable □N/A
As at the End of the Period, there was no significant contract liabilities with ageing for more than 1 year
at the end of the period. The amount of contract liabilities at beginning of the period recognised as
revenue during the period is RMB189,613,046.02.
27. Employee benefits payables
(1) Descriptions of employee benefits payables
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the
Balance at the End
Item Beginning of the Increase Decrease
of the Period
Period
I. Short-term employee benefits 571,143,205.10 1,064,732,405.44 1,207,934,749.24 427,940,861.30
II. Post-employment benefits -
584,624.36 78,848,885.81 79,159,820.55 273,689.62
Defined contribution plans
III. Termination benefits 1,282,742.00 3,606,117.44 3,606,117.44 1,282,742.00
Total 573,010,571.46 1,147,187,408.69 1,290,700,687.23 429,497,292.92
(2) Descriptions of Short-term employee benefits
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Balance at the
Increase for the Decrease for the
Item Beginning of the End of the
Period Period
Period Period
Ⅰ Salaries, bonus and allowances
375,067,929.19 958,354,048.92 1,100,233,701.81 233,188,276.30
and subsidies
Ⅱ Staff welfare 5,794,481.17 35,772,678.18 36,387,299.70 5,179,859.65
Ⅲ Social insurances 1,244,430.44 35,893,920.68 36,039,229.46 1,099,121.66
Including: Medical insurance 1,153,030.82 32,970,467.46 33,097,333.80 1,026,164.48
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Work injury insurance 51,322.84 1,975,068.85 1,986,360.07 40,031.62
Maternity insurance 40,076.78 948,384.37 955,535.59 32,925.56
Ⅳ Housing fund 2,223,574.48 31,548,429.02 32,145,023.54 1,626,979.96
Ⅴ Union funds and staff
418,905.96 3,163,328.64 3,129,494.73 452,739.87
education
Ⅵ Stock Ownership Plan Special
186,393,883.86 0.00 0.00 186,393,883.86
Fund
Total 571,143,205.10 1,064,732,405.44 1,207,934,749.24 427,940,861.30
(3) Defined contribution plans
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the
Balance at the End
Item Beginning of the Increase Decrease
of the Period
Period
Post-employment benefits
Including: 1. Basic pension
545,595.12 76,509,184.46 76,806,285.48 248,494.10
insurance
2. Unemployment insurance 39,029.24 2,339,701.35 2,353,535.07 25,195.52
Total 584,624.36 78,848,885.81 79,159,820.55 273,689.62
Other descriptions:
√Applicable □N/A
The Company participates in pension insurance and unemployment insurance plans established by the
government in accordance with relevant requirements. According to the plans, the Company makes
contributions to these plans in accordance with relevant requirements of the local government. Save for
the above contributions, the Company no longer undertakes further payment obligation. The
corresponding cost is charged to the profit or loss for the current period or the cost of relevant assets
when it occurs.
28. Taxes payable
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Value added tax 102,092,047.04 166,151,353.61
Urban maintenance and construction tax 9,994,708.09 14,374,197.97
Enterprise income tax 150,824,573.52 124,039,899.44
Property tax 10,241,088.83 7,992,927.81
Land use tax 2,995,400.14 2,847,286.45
Individual income tax 2,993,114.20 7,524,584.67
Stamp duty 3,140,814.03 2,904,260.39
Education surcharges 6,775,591.04 9,613,697.69
Others 2,202,851.07 2,254,065.70
Total 291,260,187.96 337,702,273.73
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
29. Other payables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Dividends payable 439,505,017.15 12,252,074.84
Other payables 3,630,499,380.28 3,668,082,286.04
Total 4,070,004,397.43 3,680,334,360.88
Dividends payable
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Balance at the Beginning of the
Item
Period Period
Common shares dividend 412,156,930.98 20,174.46
Dividends payable--Qingyuan Xinbeijiang (Group)
1,200,710.00 1,200,710.00
Company
Dividends payable--Other legal persons and individual
14,355,461.84 6,682,964.50
shares of subsidiaries
Dividends payable--Staff shares of subsidiaries 11,791,914.33 4,348,225.88
Total 439,505,017.15 12,252,074.84
Other payables
(1) Other payables by nature
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Office expenses 72,936,759.45 69,513,003.38
Security deposit 72,154,822.13 89,750,329.22
Promotion fees 1,948,108,687.80 1,722,993,407.82
Technology transfer fees 10,000,000.00 10,000,000.00
Accrued expenses 1,442,602,987.10 1,714,076,189.32
others 84,696,123.80 61,749,356.30
Total 3,630,499,380.28 3,668,082,286.04
The obligations of repurchasing restricted shares of the directors, the senior management and their
spouses amounted RMB0.00 at the End of the Period.
(2) Significant other payables aged over 1 year
□Applicable √N/A
Other descriptions:
√Applicable □N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Of which, the breakdown of accrued expenses was as follows:
31 December Reason for outstanding
Item 30 June 2023
2022 at the End of the Period
Utility bill 46,855,809.21 28,378,759.70 Unpaid
Research expenses 30,285,873.37 61,153,064.06 Unpaid
Business development and promotion expenses 1,273,381,492.64 1,517,084,251.92 Unpaid
Audit and information disclosure expenses 5,872,694.75 4,775,560.70 Unpaid
Others 86,207,117.13 102,684,552.94 Unpaid
Total 1,442,602,987.10 1,714,076,189.32
30. Non-current liabilities due within one year
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Lease liabilities due within one year 23,951,826.07 19,415,779.34
Long-term loans and interest due
38,846,673.61 43,661,481.64
within one year
Total 62,798,499.68 63,077,260.98
31. Other current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Output VAT pending for transfer 6,301,133.87 17,734,822.42
Payable refunds 83,440,368.95 83,440,368.95
Others 0.00 101,522.98
Total 89,741,502.82 101,276,714.35
Change of short-term bonds payable
□Applicable √N/A
Other descriptions:
□Applicable √N/A
32. Long-term loans
(1) Classification of long-term loans
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Unsecured loans 2,025,232,389.91 1,475,974,398.32
Guaranteed loans 1,976,877,722.64 1,798,531,126.20
Less: Long-term loans due within one year 38,846,673.61 43,661,481.64
Total 3,963,263,438.94 3,230,844,042.88
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Other descriptions, including interest rate range:
√Applicable □N/A
The interest rate range of credit loan is 2.25%-3.45%, and the interest rate range of guaranteed loan is
2.35%-3.60%.
33. Lease liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Lease payments payable 41,630,120.76 42,898,265.42
Lease liabilities due within one year -23,951,826.07 -19,415,779.35
Total 17,678,294.69 23,482,486.07
Other descriptions:
Interest expenses accrued on lease liabilities during the 6-month period ended 30 June 2023 was
RMB1,469,700, which was recorded in financial expenses-interest expense.
34. Deferred income
Deferred income
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the
Balance at the End
Item Beginning of the Increase Decrease Reason of formation
of the Period
Period
Government grants 384,537,267.55 71,872,232.48 30,035,418.66 426,374,081.37 /
Total 384,537,267.55 71,872,232.48 30,035,418.66 426,374,081.37 /
Projects involving government grants:
√Applicable □N/A
Unit: Yuan Currency: RMB
Charged to
Related to
Non-
Beginning Additions in Transfer to Other assets/
Projects with grants operating Closing balance
balance the period other income movement Related to
income for
income
the period
2020 Shanghai Professional
Technology Platform Capacity
Enhancement Project (2020 年 Related to
1,000,000.00 0 0 1,000,000.00 0 0
assets
度上海市专业技术平台能力
提升项目立项)
Research on Common Co-
construction Technology of
Pharmaceutical Inhalation
Preparations (开发区财政局拨 Related to
4,800,000.00 0 0 0 0 4,800,000.00
assets
款创业领军人才项目: 药品
吸入制剂共性共建技术的研
究)
Key technology research and
Related to
development of budesonide 2,158,333.29 0 0 175,000.02 0 1,983,333.27
assets
nebulized inhalation solution
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(布地奈德雾化吸入溶液关键
技术研发)
High-growth small and micro
Related to
innovation enterprises (高成长 400,000.00 0 0 0 0 400,000.00
assets
小微科创企业)
Project Subsidy of Marine
Related to
mollusk kinetic protein (海洋 4,278,000.00 0 0 442,200.00 0 3,835,800.00
assets
软体动物动能蛋白项目补助)
Laboratory project of
respiratory system inhalation
preparation engineering Related to
1,885,450.00 0 0 808,050.00 0 1,077,400.00
assets
laboratory project (呼吸系统
吸入制剂工程实验室项目)
Research and development of
respiratory system drug and
clinical research technology
service platform project talent Related to
1,550,000.00 0 0 50,000.00 0 1,500,000.00
funding (呼吸系统药物研发和 assets
临床研究技术服务平台项目
人才经费)
R&D of active substances with
bone and joint repair and health
care functions(具有骨关节修 Related to
837,943.68 0 0 59,853.12 0 778,090.56
assets
复与保健功能的活性物质研
发)
Science and technology help
the economy key special Related to
500,000.00 0 0 500,000.00 0 0
projects (科技助力经济重点 assets
专项)
Leulu total sterone project (漏 Related to
2,500,000.00 0 0 0 0 2,500,000.00
芦总甾酮项目) assets
Construction of an integrated
production line for fully
automatic blister-type dry
powder inhalant micro-filling Related to
685,666.62 0 0 121,000.02 0 564,666.60
and winding (全自动泡罩型干 assets
粉吸入剂微量灌封与卷绕一
体化生产线建设)
City Service Development Related to
800,000.00 0 0 0 0 800,000.00
Special (市服务发展专项) assets
Government funding for small
Related to
molecule peptide project (政拨 239,999.76 0 0 40,000.02 0 199,999.74
assets
款用于小分子肽项目)
Innovation coupon (Jingjin
Related to
filter press equipment) (创新券 153,332.75 0 0 0 0 153,332.75
assets
(景津压滤设备) )
Construction of a recycling
production base for
carbapenem products (碳青霉 Related to
3,625,000.00 0 0 0 0 3,625,000.00
assets
烯类系列产品循环化生产基
地建设)
Glucocorticoid inhalation
Related to
suspension project (糖皮质混 7,200,000.00 0 0 0 0 7,200,000.00
assets
悬液项目)
Return of land holding tax (土 Related to
3,460,631.62 0 0 703,111.26 0 2,757,520.36
地使用税返还) assets
Xinxiang High-tech Project
Related to
Fund Support (新乡高新技术 1,804,713.72 0 0 28,198.68 0 1,776,515.04
assets
项目资金扶持)
New inhalation drug
formulation creation project Related to
20,908,374.88 0 0 920,106.30 0 19,988,268.58
assets
(新型吸入给药制剂创制项目)
Large-scale development
subsidy for new inhalation Related to
1,680,000.00 0 0 0 0 1,680,000.00
preparations (新型吸入制剂规 assets
模化发展补助)
Subsidies for the development
of pharmaceutical APIs Related to
39,522,162.26 0 0 0 0 39,522,162.26
industry (医药原料药行业发 assets
展支持资金补助)
Zhimu total sapogenin project Related to
8,900,000.00 0 0 0 0 8,900,000.00
(知母总皂甙元项目) assets
Related to
Patent funding (专利资助) 200,000.00 0 0 0 0 200,000.00
assets
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Shenzhen Sponge City
Construction Fund Award*
Shenzhen Water Affairs Related to
760,947.20 0 0 22,380.78 0 738,566.42
assets
Bureau (深圳市海绵城市建设
资金奖励* 深圳市水务局)
Atmospheric environmental
Related to
quality improvement subsidy 157,915.02 0 0 10,766.94 0 147,148.08
assets
(大气环境质量提升补贴资金)
Technology giant (科技小巨 Related to
1,200,000.00 0 0 1,200,000.00 0 0
人) assets
First application for corporate
postdoctoral project research Related to
120,000.00 0 0 0 0 120,000.00
funding (首次申请企业博士后 assets
项目研究资助)
R&D and industrialization of
innovative Ilaprazole series (艾 Related to
11,168,166.21 0 0 2,455,000.02 0 8,713,166.19
普拉唑系列创新药物研发及 assets
产业化)
Strategic emerging industries
in 2014 (sustained release Related to
16,700,000.00 0 0 0 0 16,700,000.00
microspheres) (2014 年战略性 assets
新兴产业 (缓释微球)
Fund for industrialization of
prolonged-action microsphere Related to
12,550,000.00 0 0 0 0 12,550,000.00
preparation (长效微球制剂的 assets
产业化款项)
Construction project for
industrialization of prolonged-
action microsphere preparation Related to
18,314,195.60 0 0 1,202,654.94 0 17,111,540.66
assets
(phase I) (长效微球制剂产业
化建设项目 (一期工程)
Project subsidy from the
Ministry of Industry and Related to
2,400,000.00 0 0 0 0 2,400,000.00
Information Technology (工业 assets
和信息化部项目补助款)
Project subsidy from the
Ministry of Industry and Related to
1,135,750.00 0 0 115,500.00 0 1,020,250.00
Information Technology (工业 assets
和信息化部项目补助款)
Construction of Drug
Conformity Evaluation
Research Center Platform (药 Related to
880,000.18 0 0 79,999.98 0 800,000.20
assets
物一致性评价研究中心平台
建设)
R&D and Commercialisation
of Mouse Nerve Growth Factor Related to
29,485,857.65 0 0 5,280,044.64 183,600.00 24,022,213.01
for Injection (注射用鼠神经生 assets
长因子研发及产业化)
Demonstration project on the
application of solar Related to
1,353,499.35 0 0 551,000.04 0 802,499.31
photovoltaic architecture (太阳 assets
能光电建筑应用示范项目)
Subsidy for the Tender of
Technology Upgrade Project
for PVC Soft Bag Supported Related to
by Provincial Finance 2,299,785.26 0 0 190,182.90 0 2,109,602.36
assets
Departments (省财政支持技改
招标项目补助金 PVC 软袋)
Technical transformation
project of Shenqi Fuzheng Related to
11,852,941.22 0 0 1,911,764.70 0 9,941,176.52
Injection with flexible bag (软 assets
袋参芪扶正注射液技改项目)
Provision for technology
transformation funds and Related to
4,329,992.36 0 0 564,781.68 0 3,765,210.68
subsequent grants (技术改造 assets
资金拨款及事后补奖)
Provision for technology
transformation funds and Related to
5,576,302.33 0 0 891,684.24 0 4,684,618.09
subsequent grants (技术改造 assets
资金拨款及事后补奖)
Energy Saving and Emission
Reduction Program Related to
332,000.00 0 0 24,000.00 0 308,000.00
Distribution Transformer assets
Energy Efficiency
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Improvement (节能减排项目
配电变压器能效提升)
R&D and industrialization
team of chemical drug liquid Related to
1,710,833.60 240,000.00 0 28,999.92 0 1,921,833.68
preparation (化药液体制剂研 assets
发与产业化团队)
Innovation capacity building of
technology center (antibody Related to
4,288,140.60 0 0 222,877.68 0 4,065,262.92
laboratory) (技术中心创新能 assets
力建设 (抗体药物实验室)
Innovation capacity building of
technology center (antibody Related to
159,691.94 0 0 37,665.18 0 122,026.76
laboratory) (技术中心创新能 income
力建设 (抗体药物实验室)
Achievement transfer of blood
screening (BCI) nucleic acid
detection testing (血液筛查 Related to
3,329,659.71 0 0 0 0 3,329,659.71
assets
(BCI) 核酸检测试剂成果转
化)
Technological upgrading and
transformation projects of
workshop for acarbose APIs
for α-glucosidase inhibitor (α- Related to
357,142.96 0 0 53,571.42 0 303,571.54
葡萄糖苷酶抑制剂类原料药 assets
阿卡波糖生产车间工艺升级
技术改造项目)
Scientific technology award
and subsidy for technological Related to
2,200,000.00 0 0 0 0 2,200,000.00
innovative project (科学技术 income
奖及科技创新项目资助)
Zhuhai industrial enterprise
“cloud and platform” service
coupons supporting funds (珠 Related to
63,891.00 0 0 12,770.42 0 51,120.58
income
海市工业企业 “云上平台”服
务券支持资金)
Commissioner workstation (特 Related to
25,000.00 0 0 25,000.00 0 0
派员工作站) assets
Industrial revitalisation
Related to
supporting funds (产业振兴扶 1,287,500.01 0 0 579,000.00 0 708,500.01
assets
持资金)
Government grant for
Related to
industrial transformation (工业 108,333.83 0 0 83,333.44 0 25,000.39
assets
转型政府扶持资金)
New industrialization
Related to
development grant (新型工业 5,035,866.34 0 0 191,666.54 0 4,844,199.80
assets
化发展奖金)
Policy fund for leading
industrial enterprises loan Related to
166,666.53 0 0 100,000.02 0 66,666.51
Interests (工业龙头企业贷款 assets
贴息政策资金)
Supporting funds for five
advantageous industrial Related to
200,000.24 0 0 49,999.98 0 150,000.26
clusters and one high-tech assets
industry (五优一新扶持资金)
Capital project for innovation
and entrepreneurship team Related to
11,750,000.00 0 0 0 0 11,750,000.00
funding program (创新创业团 assets
队资助计划资金项目)
2020 Zhuhai City Innovation
and Entrepreneurship Team Related to
5,000,000.00 0 0 0 0 5,000,000.00
(Nanocrystalline) (2020 年度 assets
珠海市创新创业团队(纳米晶)
Application of artificial
intelligence in triptorelin long-
acting microsphere preparation Related to
0 0 0 -80,000.00 0 80,000.00
income
(人工智能在曲普瑞林长效微
球制剂中的应用)
Key projects of industrial core
and key technologies of Zhuhai
(Dantrolene) (珠海市产业核心 Related to
3,000,000.00 0 0 3,000,000.00 0 0
assets
和关键技术攻关方向项目
(丹曲林钠)
Data-driven industrial chain Related to
2,920,000.00 0 0 365,000.00 0 2,555,000.00
collaboration platform assets
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demonstration project (数据驱
动的产业链协同平台示范项
目)
Fund for key projects of
industrial core and key
technologies of Zhuhai (2nd Related to
batch) (珠海市产业核心和关 2,000,000.00 0 0 0 0 2,000,000.00
assets
键技术攻关方向项目资金
(第二批) )
Innovative drug of Ilaprazole
Related to
sodium for injection (创新药注 2,280,000.00 0 0 120,000.00 0 2,160,000.00
assets
射用艾普拉唑钠针剂)
Technological transformation
projects of new Cefuroxime Related to
1,533,100.00 0 0 0 0 1,533,100.00
(新型头孢粉针剂技术改造项 assets
目)
Advanced Pharmaceutical
Manufacturing Internet Related to
585,000.00 0 0 45,000.00 0 540,000.00
Benchmarking Project (先进药 assets
品制造互联网标杆项目)
Cleaner Production Audit Related to
170,000.12 0 0 4,999.98 0 165,000.14
Project (清洁生产审核项目) assets
Related to
Green factory (绿色工厂) 1,001,666.75 0 0 64,999.98 0 936,666.77
assets
HCG Project Construction Related to
2,992,185.88 0 0 197,824.98 0 2,794,360.90
(HCG 项目建设) assets
Sewage treatment system
Related to
upgrade project (污水处理系 56,209.88 0 0 4,015.02 0 52,194.86
assets
统升级改造项目)
R&D and industrialization of
Recombinant Human
Chorionic Gonadotropin for Related to
987,500.00 0 0 75,000.00 0 912,500.00
assets
Injection (注射用重组人绒促
性素研发及产业化)
Development and
Industrialization of
Cyclosporin Self-emulsifying
Soft Capsules with High Related to
786,000.00 0 0 28,000.00 80,000.00 678,000.00
Technology Barriers (高技术 assets
屏障的环孢素自乳化软胶囊
制剂的开发及产业化研究)
Project on the building of scale
production capability on
Recombinant SARS-CoV-2
Fusion Protein Vaccine (V- Related to
0 22,921,500.00 0 238,765.63 0 22,682,734.37
01)(重组新型冠状病毒融合蛋 assets
白疫苗（V-01）规模化生产
能力建设项目)
Special Fund for Foreign
Economic and Trade Related to
0 32,232.48 0 0 0 32,232.48
Development (外经贸发展专 assets
项资金)
Guangdong Provincial Key
Laboratory of Characteristic
Drug R&D Enterprises (广东 Related to
941,666.69 300,000.00 0 54,999.98 0 1,186,666.71
assets
省特色药物研发企业重点实
验室)
Subsidies for online monitoring
equipment and installations of Related to
60,000.00 0 0 11,250.00 0 48,750.00
coal fired boilers (燃煤锅炉在 assets
线监控设备装置补助资金)
Funds for joint R&D and
industrialization of integrated
platform for molecular Related to
diagnostics (集成一体化分子 53,916.31 0 0 0 0 53,916.31
assets
诊断平台的合作研发及产业
化) 资金)
Project supporting fund for the
first batch of special funds for
scientific and technological Related to
innovation in 2019 (2019 年度 600,000.00 0 0 0 0 600,000.00
assets
第一批科技创新专项资金立
项配套资助)
Provincial industrial innovation Related to
79,229.73 0 0 0 0 79,229.73
(provincial enterprise assets
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
technology center) project in
2019 (2019 年度省产业创新
(省级企业技术中心) 项目)
Pre-appropriation of special
grants for industrialization of
diagnostic reagents for Related to
COVID-19 (新型冠状病毒检 4,089,721.57 0 0 0 0 4,089,721.57
assets
测试剂产业化项目补助金预
拨)
Xiangzhou District equipment
purchase subsidy supporting
funds (Special funds for
epidemic prevention and Related to
9,150.21 0 0 0 0 9,150.21
control) (香洲区采购设备补 assets
贴扶持资金 (疫情防控专项
资金)
Zhuhai innovation and
enterprising team and high-
level talent enterprising project Related to
Phase I funds (珠海市创新创 12,000,000.00 0 0 0 0 12,000,000.00
assets
业团队和高层次人才创业项
目首期资金)
Overall relocation and
Related to
deployment expansion project 50,000,000.00 30,000,000.00 0 0 0 80,000,000.00
assets
(整体搬迁调迁扩建项目)
Environmental protection
Related to
bureau RTO project special 159,999.92 0 0 10,000.02 0 149,999.90
assets
funds (环保局 RTO 项目资金)
Structure-efficiency
optimization of marine
microorganisms and evaluation Related to
of antitumor activity (海洋微 99,209.17 0 0 99,209.17 0 0
income
生物构效优化与抗肿瘤活性
评价)
R&D and demonstration of key
technologies for the
development and utilization of
swim bladder (golden oyster) Related to
marine traditional Chinese 750,000.00 250,000.00 0 0 0 1,000,000.00
income
medicine resources (鱼鳔(黄金
鮸) 海洋中药资源开发与利
用关键技术研发与示范)
2022 Special funds for the
reconstruction of the industrial
base and the high-quality
development of the Related to
manufacturing industry from 27,965,416.69 9,828,500.00 0 4,609,789.46 0 33,184,127.23
assets
the central finance (2022 年中
央财政产业基础再造和制造
业高质量发展专项资金示范)
National Science and
Technology Major Special
Project Subsidy Fund LZM009 Related to
2,382,806.91 0 0 190,799.56 0 2,192,007.35
assets
(国家科技重大专项项目后补
助资金 LZM009)
Funds for scientific and
technological cooperation in Related to
0 300,000.00 0 0 0 300,000.00
Guangdong-Hong Kong- assets
Macau (粤港澳科技合作资金)
Phase-II support fund for
innovation and
entrepreneurship teams in Related to
Zhuhai in 2019 (2019 年珠海 0 8,000,000.00 0 0 0 8,000,000.00
assets
市创新创业团队第二期资助
资金)
Xiangzhou District actively
responds to the impact of the
epidemic and maintains
stability, innovation drives Related to
1,644,800.00 0 0 0 0 1,644,800.00
technology industry project (香 assets
洲区积极应对和疫情影响保
稳创新驱动科技工业分项)
Total 384,537,267.55 71,872,232.48 0 29,771,818.66 263,600.00 426,374,081.37
Other descriptions:
202 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
□Applicable √N/A
35. Other non-current liabilities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
The overall relocation and expansion project
of Sichuan Guangda Pharmaceutical 90,000,000.00 84,000,000.00
Manufacturing
Total 90,000,000.00 84,000,000.00
36. Share capital
√Applicable □N/A
Unit: Yuan Currency: RMB
Changes for the Period (+ -)
Balance at the Conversion Balance at the
Beginning of Issuance of Stock from End of the
the Period Others Subtotal Period
new shares dividend capital
reserve
I. Tradable
shares subject
to selling
restrictions
1. Domestic
legal person 0 0 0 0 0 0 0
shares
2. Domestic
natural person 0 0 0 0 0 0 0
shares
3. Overseas
legal person 0 0 0 0 0 0 0
shares
Tradable
shares subject
to selling 0 0 0 0 0 0 0
restrictions in
aggregate
II. Tradable
shares
1. Ordinary
shares
1,929,189,374 0 0 0 0 0 1,929,189,374
denominated in
RMB
2.Domestically
listed foreign 0 0 0 0 0 0 0
shares
Tradable
shares in 1,929,189,374 0 0 0 0 0 1,929,189,374
aggregate
Total number
1,929,189,374 0 0 0 0 0 1,929,189,374
of shares
37. Capital reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the
Balance at the End of
Item Beginning of the Increase Decrease
the Period
Period
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Capital premium (Share
2,221,682,284.77 0.00 64,111,240.69 2,157,571,044.08
premium)
Other capital reserve 122,010,931.22 34,634,929.57 0.00 156,645,860.79
Total 2,343,693,215.99 34,634,929.57 64,111,240.69 2,314,216,904.87
Other descriptions, including changes for the current period and reasons therefor:
The decrease in capital premium was due to: 1. After the stock options are exercised, the difference between
the tax deductible expenses according to tax regulations and the accrued expenses increases the income tax
payable by RMB234,356.35, which decreased the share premium accordingly. 2. The Company’s subsidiary,
Livzon Group, repurchased shares, and the capital premium is reduced by RMB63,876,884.34
correspondingly.
The increase in other capital reserve was due to: 1. The Company and its subsidiary, Livzon Group, accrued
share incentive expenses RMB28,752,796.67. 2. The Company’s subsidiary, Livzon Group, made non-
proportional capital contribution to an investee under equity accounting method that led to change in
shareholding ratio and other equity, the capital reserve is increased by RMB1,706,551.56. 3. The repurchase
by the Company’s subsidiary, Livzon Group, caused the changes in the shareholding held by the Company
and led to the change in other equity, the capital reserve is decreased by RMB4,175,581.34.
38. Treasury shares
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the
Balance at the End
Item Beginning of the Increase Decrease
of the Period
Period
Repurchase of shares due to Share
Ownership Scheme and Share Options 222,644,454.50 0.00 0.00 222,644,454.50
Incentive Scheme
Repurchase of shares to be cancelled 124,532,106.79 369,959,019.79 0.00 494,491,126.58
Total 347,176,561.29 369,959,019.79 0.00 717,135,581.08
Other descriptions, including changes for the current period and reasons therefor:
The increase in Treasury shares during the current period represents the total amount of funds used by the
Company to repurchase 29,705,344 shares of the Company cumulatively through centralized bidding
transactions.
39. Other comprehensive income
√Applicable □N/A
Unit: Yuan Currency: RMB
For the Period
Less:
Balance at the transferred to Amount Amount Balance at the
Item Beginning of Amount before profit or loss in Less: Income attributable to attributable to End of the
The Period tax current year or tax expenses parent company minority interests Period
retained after tax after tax
earnings
I. Other comprehensive
income not reclassified
16,979,631.87 -17,160,840.71 4,408,075.32 6,154,772.69 -11,322,857.19 -16,400,831.54 5,656,774.68
into profit or loss
subsequently
Other comprehensive
income not reclassified to
8,775,200.25 0.00 0.00 0.00 0.00 0.00 8,775,200.25
profit or loss under equity
method
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Changes in fair value of
other equity instrument 8,204,431.61 -17,160,840.71 4,408,075.32 6,154,772.69 -11,322,857.19 -16,400,831.54 -3,118,425.57
investments
II. Other comprehensive
income that will be
-12,275,158.33 57,803,822.48 0.00 0.00 42,504,682.17 15,299,140.31 30,229,523.84
reclassified into profit or
loss subsequently
Including:Other
comprehensive income
that will be transferred to 274,411.50 0.00 0.00 0.00 0.00 0.00 274,411.50
profit or loss under equity
method
Translation difference of
foreign currency financial -12,549,569.84 57,803,822.48 0.00 0.00 42,504,682.17 15,299,140.31 29,955,112.33
statements
Total of other
4,704,473.53 40,642,981.77 4,408,075.32 6,154,772.69 31,181,824.98 -1,101,691.23 35,886,298.52
comprehensive income
40. Surplus reserve
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Balance at the
Item Increase Decrease
Beginning of the Period End of thePeriod
Statutory surplus
693,451,984.13 0.00 0.00 693,451,984.13
reserve
Discretionary surplus
40,210,642.44 0.00 0.00 40,210,642.44
reserve
Reserve funds 1,103,954.93 0.00 0.00 1,103,954.93
Total 734,766,581.50 0.00 0.00 734,766,581.50
41. Undistributed profits
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Retained earnings in previous period before
8,456,643,326.82 7,223,644,166.22
adjustments
Adjustments to opening balance of retained earnings
0.00 0.00
(increase +, decrease -)
Opening balance of retained earnings after adjustments 8,456,643,326.82 7,223,644,166.22
Add: Net profit attributable to parent company for the
815,434,734.90 1,502,595,840.48
current year
Gains from disposal of other equity instruments
1,973,645.20 101,906,354.19
investment
Less: Appropriation of statutory surplus reserve 0.00 93,945,402.42
Appropriation of discretionary surplus reserve 0.00 0.00
Appropriation for dividends to ordinary shares 336,792,056.76 277,557,631.65
Dividend converted to share capital of ordinary shares 0.00 0.00
Closing balance of undistributed profits 8,937,259,650.16 8,456,643,326.82
42. Operating income and operating cost
(1) The information of operating income and operating cost
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
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Income Cost Income Cost
Primary operations 8,652,793,987.61 3,225,507,979.30 8,492,047,759.72 3,002,949,330.38
Other operations 66,947,611.62 47,912,247.73 72,897,525.83 51,443,372.82
Total 8,719,741,599.23 3,273,420,227.03 8,564,945,285.55 3,054,392,703.20
Other descriptions:
(2) Breakdown information of principal activities income
①Segregation by products
For the Period For the Previous Period
Item
Income Cost Income Cost
Chemical pharmaceuticals 4,477,996,443.20 922,208,230.73 4,692,194,805.98 916,659,504.15
Chemical APIs and
2,682,754,623.59 1,757,162,775.91 2,771,577,889.05 1,743,742,075.65
Intermediates
Traditional Chinese medicine 985,591,533.02 315,931,826.92 514,402,423.73 146,937,126.69
Biologics 113,409,489.23 59,602,491.18 107,058,620.30 8,426,569.04
Health care products 87,265,994.18 32,129,014.01 54,741,880.51 20,894,995.01
Diagnostic reagents and
297,994,623.29 133,676,710.13 346,042,443.87 164,056,563.15
equipment
Others 6,493,224.41 4,376,527.62 0.00 0.00
Subtotal of pharmaceutical
8,651,505,930.92 3,225,087,576.49 8,486,018,063.45 3,000,716,833.69
industry
Service industry 1,288,056.69 420,402.81 6,029,696.27 2,232,496.69
Total 8,652,793,987.61 3,225,507,979.30 8,492,047,759.72 3,002,949,330.38
②Segregation by operating location
For the Period For the Previous Period
Item
Income Cost Income Cost
Domestic 7,274,024,825.06 2,345,678,968.90 6,974,358,565.54 2,065,054,349.09
Overseas 1,378,769,162.55 879,829,010.40 1,517,689,194.18 937,894,981.29
Total 8,652,793,987.61 3,225,507,979.30 8,492,047,759.72 3,002,949,330.38
③Segregation by timing of revenue recognition
For the Period For the Previous Period
Item
Income Cost Income Cost
Commodities (recognised
8,652,793,987.61 3,225,507,979.30 8,492,047,759.72 3,002,949,330.38
at a point of time)
Total 8,652,793,987.61 3,225,507,979.30 8,492,047,759.72 3,002,949,330.38
④Information of top five customers of business revenue
Total operating income of the top five Proportion to primary operating income in the
Period
customers period (%)
January to June 2023 804,489,272.38 9.30
January to June 2022 784,737,990.71 9.24
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
⑤ Segregation by other operations
For the Period For the Previous Period
Item
Income Cost Income Cost
Sales of raw materials 16,840,657.33 11,419,476.82 32,752,345.84 20,358,443.93
Processing fees 931,674.96 787,254.35 1,336,854.96 546,940.37
Rental fees 6,337,567.62 951,349.22 5,928,780.42 930,025.57
Power fees 5,264,050.06 4,942,696.45 6,434,386.87 6,293,501.06
Others 37,573,661.65 29,811,470.89 26,445,157.74 23,314,461.89
Total 66,947,611.62 47,912,247.73 72,897,525.83 51,443,372.82
43. Taxes and surcharges
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Urban construction tax 43,298,169.40 40,929,152.73
Education surcharge 32,598,533.87 30,058,369.58
Property tax 13,997,948.34 11,993,989.59
Land use tax 5,285,696.16 5,195,628.85
Stamp duty and others 7,526,086.18 6,145,497.56
Total 102,706,433.95 94,322,638.31
Other descriptions:
The bases of calculations for major taxes and surcharges are set out in Note IV. Taxation.
44. Selling expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Marketing and promotional expenses 2,076,537,470.48 2,183,934,600.06
Staff salaries 251,267,240.73 260,162,330.69
Entertainment and travel expenses 28,223,785.21 20,988,461.23
Conference fees 10,768,435.82 8,609,021.92
Others 32,266,297.96 38,675,378.55
Total 2,399,063,230.20 2,512,369,792.45
45. Administrative expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Staff salaries 183,700,164.99 276,280,216.68
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Depreciation and amortization 59,970,975.61 52,062,021.03
Loss on suspension of operations 0.00 83,168,875.94
Shares incentive expenses 49,817,409.23 10,488,471.09
Advisory, consultancy and information disclosure fees 13,669,675.15 12,483,135.10
Quality project expenses 22,174,736.40 11,250,121.78
Office, entertainment and travelling expenses 26,242,650.31 22,601,820.05
Repair of utilities, transportation and miscellaneous expenses 18,490,663.47 16,250,836.91
Recruitment and staff training expenses 3,245,797.53 2,548,844.21
Others 57,555,822.63 42,693,969.14
Total 434,867,895.32 529,828,311.93
46. R&D expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Material fees 108,389,222.80 146,857,218.55
Staff salaries 217,004,623.19 207,091,826.90
Shares incentive expenses 1,139,264.69 9,799,989.00
Testing fee 121,552,481.88 205,299,479.02
Depreciation and amortization 267,976,579.13 67,800,559.34
Others 49,104,388.07 70,584,005.63
Total 765,166,559.76 707,433,078.44
47. Finance expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Interest expenses 70,061,146.58 60,979,386.68
Interest income -135,947,800.19 -117,501,999.50
Exchange (gains)/losses -60,395,256.87 -77,672,355.34
Bank charges and others 3,694,323.10 3,793,920.49
Total -122,587,587.38 -130,401,047.67
48. Other income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period Related to assets/ Related to income
Government grants 29,702,173.89 33,869,358.52 Related to assets
Government grants 93,642,570.39 60,315,844.07 Related to income
Handling fees for tax withholding 2,579,796.37 3,025,074.11
Tax refund on super-deduction 719.61 31,977.33
Total 125,925,260.26 97,242,254.03
Other descriptions:
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
For specific information on government grants, please refer to Note V. 61. Government grants for details.
49. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Investment income from financial assets held for trading during
356,166.62 306,527.56
the holding period
Investment income from disposal of financial assets held for
-6,036,503.65 -3,456,991.56
trading
Dividend income from other equity instrument investments 17,709,895.19 8,713,730.74
Long-term equity investments income under equity method 44,824,481.29 41,208,487.80
Investment income from disposal of long-term equity
0.00 4,242,404.46
investments
Total 56,854,039.45 51,014,159.00
50. Gains from changes in fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Sources of gains from changes in fair value For the Period For the Previous Period
Financial assets held for trading -18,426,273.95 -89,596,630.72
Including: Debt instruments investment 9,573.79 13,515.95
Equity instruments investment -13,003,336.17 -80,056,904.18
Derivative financial assets -5,432,511.57 -9,553,242.49
Financial liabilities held for trading -20,888,614.43 -5,882,906.43
Including: Derivative financial liabilities -20,888,614.43 -5,882,906.43
Total -39,314,888.38 -95,479,537.15
51. Credit impairment loss
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Bad debts of accounts receivable -20,935,155.87 -933,002.92
Bad debts of other receivables -1,274,235.82 -1,872,437.91
Total -22,209,391.69 -2,805,440.83
52. Asset impairment losses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
I. Losses on bad debts 0.00 0.00
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
II. Losses on decline in value of inventories and on
-30,171,594.37 -27,834,495.93
impairment of contract performance costs
III. Losses on impairment of long-term equity
0.00 0.00
investments
IV. Losses on impairment of property 0.00 0.00
V. Losses on impairment of fixed assets 0.00 0.00
VI. Losses on impairment of project materials 0.00 0.00
VII. Losses on impairment of construction in progress 0.00 0.00
VIII. Losses on impairment of bearer biological assets 0.00 0.00
IX. Losses on impairment on oil and gas assets 0.00 0.00
X. Losses on impairment of intangible assets 0.00 0.00
XI. Losses on impairment of goodwill 0.00 0.00
XII. Others 0.00 0.00
Total -30,171,594.37 -27,834,495.93
53. Gains on disposal of assets
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Gain from disposal of fixed assets (“-” for Loss) -342,359.46 -510,518.91
Gain from disposal of intangible assets (“-” for Loss) 0.00 0.00
Total -342,359.46 -510,518.91
54. Non-operating income
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount included in non-
Item For the Period For the Previous Period
recurring gains and losses
Gain from retirement of non-current
463,655.86 774,200.18 463,655.86
assets
Including: Gain from disposal of fixed
463,655.86 774,200.18 463,655.86
assets
Income from scraps 475,611.19 1,368,658.80 475,611.19
Waiver of payables 185,479.70 651,801.74 185,479.70
Compensation income 305,178.31 122,240.53 305,178.31
Others 327,525.12 1,554,013.63 327,525.12
Total 1,757,450.18 4,470,914.88 1,757,450.18
Government grants included in current profit or loss
□Applicable √N/A
55. Non-operating expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
For the Previous Amount included in non-
Item For the Period
Period recurring gains and losses
Loss on retirement of non-current assets 1,210,440.54 2,249,701.49 1,210,440.54
Including: Loss from disposal of fixed
1,210,440.54 2,249,701.49 1,210,440.54
assets
Donation expenses 3,107,267.57 3,675,341.69 3,107,267.57
Others 3,052,320.30 816,563.67 3,052,320.30
Total 7,370,028.41 6,741,606.85 7,370,028.41
56. Income tax expenses
(1) Table of income tax expenses
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Current income tax 304,266,559.25 357,374,828.74
Deferred income tax 20,396,502.85 -86,199,499.19
Total 324,663,062.10 271,175,329.55
(2) Reconciliation between income tax expenses and accounting profits
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period
Profit before tax 1,952,233,327.93
Income tax expenses calculated at statutory (or applicable) tax rates 488,058,331.98
Impact from tax preferential rate in certain subsidiaries -539,309.30
Effect of tax reduction and exemption -257,591,017.66
Effect of non-deductible costs, expenses and losses 3,144,882.49
Effect of deductible tax losses for which no deferred tax assets were recognised in prior periods -75,126.10
Effect of deductible tax losses or deductible temporary differences for which no deferred tax asset
100,280,827.03
was recognised in the current period
Others -8,615,526.34
Income tax expenses 324,663,062.10
Other descriptions:
□Applicable √N/A
57. Notes to cash flows statement
(1) Other cash received relating to operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Government grants 166,304,476.76 135,472,208.17
Interest income 132,299,641.10 99,798,243.58
Security deposits 1,333,286.78 18,200,506.40
Current accounts and others 89,242,513.12 66,595,926.72
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Total 389,179,917.76 320,066,884.87
(2) Other cash paid relating to operating activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Business promotion expenses 2,238,980,138.14 2,410,016,519.70
Research and development expenses 278,035,606.39 314,240,104.94
Bank charges 3,454,431.81 3,538,284.90
Letter of credit and bank acceptance bill
628,328.60 1,164,843.92
deposit, etc.
current accounts and others 271,627,636.18 10,960,309.52
Other expenses paid 29,937,482.42 279,038,419.08
Total 2,822,663,623.54 3,018,958,482.06
(3) Other cash received relating to investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Tiantong Securities bankruptcy distribution 0.00 158,470.77
Security deposits 135,238.13 6,825,715.78
Compensation for demolition 6,000,000.00 6,000,000.00
Time deposits 291,590,000.00 0.00
Total 297,725,238.13 12,984,186.55
(4) Other cash paid relating to investing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Security deposits 633,989.87 5,303,620.21
Foreign exchange forward contract losses 14,627,360.90 10,091,161.61
Time deposits 200,000,000.00 0.00
Others 0.00 150.00
Total 215,261,350.77 15,394,931.82
(5) Other cash received relating to financing activities
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Bill discounting 20,000,000.00 0.00
Collection and advance payment of individual
0.00 3,124,846.38
income tax
Total 20,000,000.00 3,124,846.38
(6) Other cash paid relating to financing activities
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Repurchase of shares 512,626,059.45 520,433,907.64
Discount bill redemption 120,415,088.50 0.00
Rent 15,457,825.06 16,902,285.66
Collection and advance payment of individual
14,362.22 1,237,210.80
income tax
Others 743,288.72 0.00
Total 649,256,623.95 538,573,404.10
58. Supplemental to cash flow statement
(1) Supplemental to cash flow statement
√Applicable □N/A
Unit: Yuan Currency: RMB
Supplemental information For the Period For the Previous Period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit 1,627,570,265.83 1,545,180,207.58
Add: Assets impairment loss 30,171,594.37 27,834,495.93
Credit impairment loss 22,209,391.69 2,805,440.83
Depreciation of fixed assets, depletion of oil and gas
328,414,531.00 297,357,229.58
assets, depreciation of productive biological assets
Amortization of right-of-use assets 15,820,079.48 16,158,894.05
Amortization of intangible assets 234,376,440.79 29,104,955.65
Long-term prepaid expenses amortization 52,111,674.42 24,818,590.37
Losses on disposal of fixed assets, intangible assets
342,359.46 510,518.91
and other long-term assets (Gain as in “-”)
Loss on retirement of fixed assets (Gain as in “-”) 746,784.68 1,475,501.31
Losses on changes in fair value (Gain as in “-”) 39,314,888.38 95,479,537.15
Financial expenses (Gain as in “-”) 29,379,861.81 4,262,214.38
Investment losses (Gain as in “-”) -56,854,039.45 -51,014,159.00
Decrease in deferred tax assets (Increase as in “-”) 19,022,256.19 -84,323,187.15
Increase in deferred tax liabilities (Decrease as in “-”) 1,374,246.66 -1,876,312.04
Decrease in inventories (Increase as in “-”) -318,716,893.25 -201,059,238.14
Decrease in operating receivables (Increase as in “-”) 814,112,912.19 559,085,768.30
Increase in operating payables (Decrease as in “-”) -1,633,858,286.87 -393,594,247.88
Others 51,669,618.16 30,747,014.96
Net cash flows from operating activities 1,257,207,685.54 1,902,953,224.79
2. Significant investment or finance activities not involving cash:
Conversion of debt into capital 0.00 0.00
Convertible bonds mature within one year 0.00 0.00
Newly added use right assets in the current period 14,230,427.76 0.00
3. Net increase/(decrease) in cash and cash equivalents:
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Cash and bank balance as at end of period 14,104,668,401.83 12,615,780,742.32
Less: cash and bank balance at beginning of period 14,178,465,686.40 11,697,518,141.18
Add: cash equivalents at end of period 0.00 0.00
Less: cash equivalents at beginning of period 0.00 0.00
Net increase in cash and cash equivalents -73,797,284.57 918,262,601.14
(2) Net cash paid for acquisition of subsidiaries during the period
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount
Cash or cash equivalents paid during the Period for business combinations in
the Period
Including: Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. 22,500,000.00
Less: Cash and cash equivalents held by subsidiaries on the acquisition date
Including: Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd. 38,048.41
Add: Cash or cash equivalents paid during the Period for business
combinations in previous periods
Including: Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd.
Net cash paid on the acquisition of subsidiaries 22,461,951.59
(3). Net cash received from disposal of subsidiaries during the period
□Applicable √N/A
(4). Details of cash and cash equivalents
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of Balance at the Beginning
Item
the Period of the Period
I. Cash 14,104,668,401.83 14,178,465,686.40
Including: Cash on hand 410,711.67 231,883.95
Cash at bank readily available for payment 14,088,001,753.69 14,164,236,988.28
Other monetary fund readily available for payment 16,255,936.47 13,996,814.17
II. Cash equivalents 0.00 0.00
Including: bonds investment mature within 3 months 0.00 0.00
III. Cash and cash equivalents as at closing balance 14,104,668,401.83 14,178,465,686.40
Other descriptions:
√Applicable □N/A
Cash and cash equivalents do not include any cash and cash equivalents that are restricted in use.
59. Ownership or using rights of assets subject to restriction
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Carrying value at period end Reason of restriction
Other monetary funds 3,713,052.25 Security deposits of letters of credit, bank acceptance bills
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
and forward settlement
Notes receivable 530,641,682.69 Bills pool business, pledge notes receivable
Total 534,354,734.94 /
60. Items in foreign currencies
(1). Items in foreign currencies
√Applicable □N/A
Unit: Yuan
Balance in foreign Equivalent RMB balance
Item Conversion rate
currency at year end at year end
Cash and bank balances
Including: HKD 1,155,062,479.39 0.92198 1,064,944,504.75
EUR 94,230.96 7.8771 742,266.70
USD 238,326,165.22 7.2258 1,722,097,204.65
MOP 6,391,169.00 0.8997 5,750,134.75
JPY 301,142,397.00 0.050094 15,085,427.24
GBP 1,690.10 9.1432 15,452.92
Accounts receivable
Including: USD 75,882,763.03 7.2258 548,313,669.11
MOP 166,738.45 0.8997 150,014.58
Dividend receivable
Including: HKD 287,100.00 0.92198 264,700.46
Other receivables
Including: HKD 2,268,906.00 0.92198 2,091,885.96
MOP 179,548.00 0.8997 161,539.34
Other current assets
Including: USD 13,696,849.00 7.2258 98,970,691.50
Short-term loans
Including: USD 13,696,849.00 7.2258 98,970,691.50
Accounts payable
Including: USD 126,001.27 7.2258 910,459.98
EUR 5,665.41 7.8771 44,627.00
JPY 195,820,821.22 0.050094 9,809,448.22
Dividends payable
Including: HKD 255,415,684.50 0.92198 235,488,152.80
Other payables
Including: HKD 2,700,522.79 0.92198 2,489,828.00
USD 3,760,505.65 7.2258 27,172,661.73
(2). Descriptions of overseas operating entities, including disclosure of the main overseas business
locations, functional currency and the basis for selection of important overseas operating entities, and
the reasons for changes in functional currency (if any)
□Applicable √N/A
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61. Government grants
(1) Basic information of government grants
√Applicable □N/A
Unit: Yuan Currency: RMB
Amount included in profit or
Category Amount Line item
loss for the current period
Related to assets 29,702,173.89 Other income 29,702,173.89
Related to income 93,642,570.39 Other income 93,642,570.39
(2) Return of government grants
□Applicable √N/A
Other descriptions
(1). Government grants recorded as deferred income and measured at gross amount method subsequently
Item Related to
Beginning Additions in Charged to Transfer to Other Closing presented in assets/
Projects with grants Category
balance the period Non-operating other income movement balance income Related to
statement income
2020 Shanghai
Professional
Technology Platform
Capacity Enhancement Financial Other Related to
1,000,000.00 0 0 1,000,000.00 0 0
Project (2020 年度上海 allocation income assets
市专业技术平台能力
提升项目立项)
Research on Common
Co-construction
Technology of
Pharmaceutical
Inhalation Preparations Financial Other Related to
4,800,000.00 0 0 0 0 4,800,000.00
(开发区财政局拨款创 allocation income assets
业领军人才项目: 药品
吸入制剂共性共建技
术的研究)
Key technology
research and
development of
budesonide nebulized Financial Other Related to
2,158,333.29 0 0 175,000.02 0 1,983,333.27
inhalation solution (布 allocation income assets
地奈德雾化吸入溶液
关键技术研发)
High-growth small and
micro innovation Financial Other Related to
400,000.00 0 0 0 0 400,000.00
enterprises (高成长小微 allocation income assets
科创企业)
Project Subsidy of
Marine mollusk kinetic Financial Other Related to
4,278,000.00 0 0 442,200.00 0 3,835,800.00
protein (海洋软体动物 allocation income assets
动能蛋白项目补助)
Laboratory project of
respiratory system
inhalation preparation Financial Other Related to
engineering laboratory 1,885,450.00 0 0 808,050.00 0 1,077,400.00
allocation income assets
project (呼吸系统吸入
制剂工程实验室项目)
Research and
development of
respiratory system drug
and clinical research Financial Other Related to
technology service 1,550,000.00 0 0 50,000.00 0 1,500,000.00
allocation income assets
platform project talent
funding (呼吸系统药物
研发和临床研究技术
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服务平台项目人才经
费)
R&D of active
substances with bone
and joint repair and Financial Other Related to
health care functions(具 837,943.68 0 0 59,853.12 0 778,090.56
allocation income assets
有骨关节修复与保健
功能的活性物质研发)
Science and technology
help the economy key Financial Other Related to
500,000.00 0 0 500,000.00 0 0
special projects (科技助 allocation income assets
力经济重点专项)
Leulu total sterone
Financial Other Related to
project (漏芦总甾酮项 2,500,000.00 0 0 0 0 2,500,000.00
allocation income assets
目)
Construction of an
integrated production
line for fully automatic
blister-type dry powder
inhalant micro-filling Financial Other Related to
685,666.62 0 0 121,000.02 0 564,666.60
and winding (全自动泡 allocation income assets
罩型干粉吸入剂微量
灌封与卷绕一体化生
产线建设)
City Service
Development Special Financial Other Related to
800,000.00 0 0 0 0 800,000.00
allocation income assets
(市服务发展专项)
Government funding for
small molecule peptide Financial Other Related to
239,999.76 0 0 40,000.02 0 199,999.74
project (政拨款用于小 allocation income assets
分子肽项目)
Innovation coupon
(Jingjin filter press Financial Other Related to
153,332.75 0 0 0 0 153,332.75
equipment) (创新券(景 allocation income assets
津压滤设备) )
Construction of a
recycling production
base for carbapenem Financial Other Related to
products (碳青霉烯类 3,625,000.00 0 0 0 0 3,625,000.00
allocation income assets
系列产品循环化生产
基地建设)
Glucocorticoid
inhalation suspension Financial Other Related to
7,200,000.00 0 0 0 0 7,200,000.00
project (糖皮质混悬液 allocation income assets
项目)
Return of land holding Financial Other Related to
3,460,631.62 0 0 703,111.26 0 2,757,520.36
tax (土地使用税返还) allocation income assets
Xinxiang High-tech
Project Fund Support Financial Other Related to
1,804,713.72 0 0 28,198.68 0 1,776,515.04
(新乡高新技术项目资 allocation income assets
金扶持)
New inhalation drug
formulation creation Financial Other Related to
20,908,374.88 0 0 920,106.30 0 19,988,268.58
project (新型吸入给药 allocation income assets
制剂创制项目)
Large-scale
development subsidy for
new inhalation Financial Other Related to
1,680,000.00 0 0 0 0 1,680,000.00
allocation income assets
preparations (新型吸入
制剂规模化发展补助)
Subsidies for the
development of
pharmaceutical APIs Financial Other Related to
39,522,162.26 0 0 0 0 39,522,162.26
allocation income assets
industry (医药原料药行
业发展支持资金补助)
Zhimu total sapogenin
Financial Other Related to
project (知母总皂甙元 8,900,000.00 0 0 0 0 8,900,000.00
allocation income assets
项目)
Patent funding (专利资 Financial Other Related to
200,000.00 0 0 0 0 200,000.00
助) allocation income assets
Shenzhen Sponge City
Construction Fund
Award* Shenzhen Financial Other Related to
760,947.20 0 0 22,380.78 0 738,566.42
Water Affairs Bureau allocation income assets
(深圳市海绵城市建设
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资金奖励*深圳市水务
局)
Atmospheric
environmental quality
improvement subsidy Financial Other Related to
157,915.02 0 0 10,766.94 0 147,148.08
allocation income assets
(大气环境质量提升补
贴资金)
Technology giant (科技 Financial Other Related to
1,200,000.00 0 0 1,200,000.00 0 0
小巨人) allocation income assets
First application for
corporate postdoctoral
project research funding Financial Other Related to
120,000.00 0 0 0 0 120,000.00
allocation income assets
(首次申请企业博士后
项目研究资助)
R&D and
industrialization of
innovative Ilaprazole Financial Other Related to
11,168,166.21 0 0 2,455,000.02 0 8,713,166.19
allocation income assets
series (艾普拉唑系列创
新药物研发及产业化)
Strategic emerging
industries in 2014
(sustained release Financial Other Related to
microspheres) (2014 年 16,700,000.00 0 0 0 0 16,700,000.00
allocation income assets
战略性新兴产业 (缓释
微球)
Fund for
industrialization of
prolonged-action Financial Other Related to
microsphere preparation 12,550,000.00 0 0 0 0 12,550,000.00
allocation income assets
(长效微球制剂的产业
化款项)
Construction project for
industrialization of
prolonged-action
microsphere preparation Financial Other Related to
18,314,195.60 0 0 1,202,654.94 0 17,111,540.66
(phase I) (长效微球制 allocation income assets
剂产业化建设项目 (一
期工程 )
Project subsidy from the
Ministry of Industry and
Information Technology Financial Other Related to
2,400,000.00 0 0 0 0 2,400,000.00
allocation income assets
(工业和信息化部项目
补助款)
Project subsidy from the
Ministry of Industry and
Information Technology Financial Other Related to
1,135,750.00 0 0 115,500.00 0 1,020,250.00
allocation income assets
(工业和信息化部项目
补助款)
Construction of Drug
Conformity Evaluation
Research Center Financial Other Related to
Platform (药物一致性 880,000.18 0 0 79,999.98 0 800,000.20
allocation income assets
评价研究中心平台建
设)
R&D and
Commercialisation of
Mouse Nerve Growth Financial Other Related to
Factor for Injection (注 29,485,857.65 0 0 5,280,044.64 183,600.00 24,022,213.01
allocation income assets
射用鼠神经生长因子
研发及产业化)
Demonstration project
on the application of
solar photovoltaic Financial Other Related to
1,353,499.35 0 0 551,000.04 0 802,499.31
allocation income assets
architecture (太阳能光
电建筑应用示范项目)
Subsidy for the Tender
of Technology Upgrade
Project for PVC Soft
Bag Supported by Financial Other Related to
Provincial Finance 2,299,785.26 0 0 190,182.90 0 2,109,602.36
allocation income assets
Departments (省财政支
持技改招标项目补助
金 PVC 软袋)
Technical Financial Other Related to
11,852,941.22 0 0 1,911,764.70 0 9,941,176.52
transformation project allocation income assets
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of Shenqi Fuzheng
Injection with flexible
bag (软袋参芪扶正注
射液技改项目)
Provision for
technology
transformation funds Financial Other Related to
and subsequent grants 4,329,992.36 0 0 564,781.68 0 3,765,210.68
allocation income assets
(技术改造资金拨款及
事后补奖)
Provision for
technology
transformation funds Financial Other Related to
and subsequent grants 5,576,302.33 0 0 891,684.24 0 4,684,618.09
allocation income assets
(技术改造资金拨款及
事后补奖)
Electricity distribution
transformer
performance
enhancement for
energy-saving and Financial Other Related to
emission reduction 332,000.00 0 0 24,000.00 0 308,000.00
allocation income assets
projects (Energy-saving
and emission reduction
projects (节能减排项目
配电变压器能效提升)
R&D and
industrialization team of
chemical drug liquid Financial Other Related to
preparation (化药液体 1,710,833.60 240,000.00 0 28,999.92 0 1,921,833.68
allocation income assets
制剂研发与产业化团
队)
Innovation capacity
building of technology
center (antibody Financial Other Related to
laboratory) (技术中心 4,288,140.60 0 0 222,877.68 0 4,065,262.92
allocation income assets
创新能力建设 (抗体药
物实验室)
Innovation capacity
building of technology
center (antibody Financial Other Related to
laboratory) (技术中心 159,691.94 0 0 37,665.18 0 122,026.76
allocation income income
创新能力建设 (抗体药
物实验室)
Achievement transfer of
blood screening (BCI)
nucleic acid detection Financial Other Related to
testing (血液筛查 3,329,659.71 0 0 0 0 3,329,659.71
allocation income assets
(BCI) 核酸检测试剂成
果转化)
Technological
upgrading and
transformation projects
of workshop for
acarbose APIs for α- Financial Other Related to
glucosidase inhibitor (α- 357,142.96 0 0 53,571.42 0 303,571.54
allocation income assets
葡萄糖苷酶抑制剂类
原料药阿卡波糖生产
车间工艺升级技术改
造项目)
Scientific technology
award and subsidy for
technological innovative Financial Other Related to
2,200,000.00 0 0 0 0 2,200,000.00
allocation income income
project (科学技术奖及
科技创新项目资助)
Zhuhai industrial
enterprise “cloud and
platform” service
coupons supporting Financial Other Related to
63,891.00 0 0 12,770.42 0 51,120.58
funds (珠海市工业企业 allocation income income
“云上平台”服务券支持
资金)
Commissioner
Financial Other Related to
workstation (特派员工 25,000.00 0 0 25,000.00 0 0
allocation income assets
作站)
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Industrial revitalisation
Financial Other Related to
supporting funds (产业 1,287,500.01 0 0 579,000.00 0 708,500.01
allocation income assets
振兴扶持资金)
Government grant for
industrial transformation Financial Other Related to
108,333.83 0 0 83,333.44 0 25,000.39
(工业转型政府扶持资 allocation income assets
金)
New industrialization
Financial Other Related to
development grant (新 5,035,866.34 0 0 191,666.54 0 4,844,199.80
allocation income assets
型工业化发展奖金)
Policy fund for leading
industrial enterprises
loan Interests (工业龙 Financial Other Related to
166,666.53 0 0 100,000.02 0 66,666.51
allocation income assets
头企业贷款贴息政策
资金)
Supporting funds for
five advantageous
industrial clusters and Financial Other Related to
200,000.24 0 0 49,999.98 0 150,000.26
one high-tech industry allocation income assets
(五优一新扶持资金)
Capital project for
innovation and
entrepreneurship team Financial Other Related to
funding program (创新 11,750,000.00 0 0 0 0 11,750,000.00
allocation income assets
创业团队资助计划资
金项目)
2020 Zhuhai City
Innovation and
Entrepreneurship Team Financial Other Related to
(Nanocrystalline) (2020 5,000,000.00 0 0 0 0 5,000,000.00
allocation income assets
年度珠海市创新创业
团队 (纳米晶)
Application of artificial
intelligence in
triptorelin long-acting
microsphere preparation Financial Other Related to
0 0 0 -80,000.00 0 80,000.00
(人工智能在曲普瑞林 allocation income income
长效微球制剂中的应
用)
Key projects of
industrial core and key
technologies of Zhuhai
(Ryanodex) (珠海市产 Financial Other Related to
3,000,000.00 0 0 3,000,000.00 0 0
allocation income assets
业核心和关键技术攻
关方向项目 (丹曲林
钠)
Data-driven industrial
chain collaboration
platform demonstration Financial Other Related to
project (数据驱动的产 2,920,000.00 0 0 365,000.00 0 2,555,000.00
allocation income assets
业链协同平台示范项
目)
Fund for key projects of
industrial core and key
technologies of Zhuhai
(2nd batch) (珠海市产 Financial Other Related to
2,000,000.00 0 0 0 0 2,000,000.00
allocation income assets
业核心和关键技术攻
关方向项目资金 (第二
批) )
Innovative drug of
Ilaprazole sodium for Financial Other Related to
2,280,000.00 0 0 120,000.00 0 2,160,000.00
injection (创新药注射 allocation income assets
用艾普拉唑钠针剂)
Technological
transformation projects
of new Cefuroxime (新 Financial Other Related to
1,533,100.00 0 0 0 0 1,533,100.00
allocation income assets
型头孢粉针剂技术改
造项目)
Advanced
Pharmaceutical
Manufacturing Internet Financial Other Related to
Benchmarking Project 585,000.00 0 0 45,000.00 0 540,000.00
allocation income assets
(先进药品制造互联网
标杆项目)
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Cleaner Production
Financial Other Related to
Audit Project (清洁生 170,000.12 0 0 4,999.98 0 165,000.14
allocation income assets
产审核项目)
Green factory (绿色工 Financial Other Related to
1,001,666.75 0 0 64,999.98 0 936,666.77
厂) allocation income assets
HCG project
Financial Other Related to
construction (HCG 项目 2,992,185.88 0 0 197,824.98 0 2,794,360.90
allocation income assets
建设)
Sewage treatment
system upgrade project Financial Other Related to
56,209.88 0 0 4,015.02 0 52,194.86
(污水处理系统升级改 allocation income assets
造项目)
R&D and
industrialization of
Recombinant Human
Chorionic Gonadotropin Financial Other Related to
987,500.00 0 0 75,000.00 0 912,500.00
for Injection (注射用重 allocation income assets
组人绒促性素研发及
产业化)
Development and
Industrialization of
Cyclosporin Self-
emulsifying Soft
Capsules with High Financial Other Related to
786,000.00 0 0 28,000.00 80,000.00 678,000.00
Technology Barriers (高 allocation income assets
技术屏障的环孢素自
乳化软胶囊制剂的开
发及产业化研究)
Project on the building
of scale production
capability on
Recombinant SARS-
CoV-2 Fusion Protein Financial Other Related to
0 22,921,500.00 0 238,765.63 0 22,682,734.37
Vaccine (V-01) (重组新 allocation income assets
型冠状病毒融合蛋白
疫苗（V-01）规模化
生产能力建设项目)
Special Fund for
Foreign Economic and Financial Other Related to
0 32,232.48 0 0 0 32,232.48
Trade Development (外 allocation income assets
经贸发展专项资金)
Guangdong Provincial
Key Laboratory of
Characteristic Drug Financial Other Related to
R&D Enterprises (广东 941,666.69 300,000.00 0 54,999.98 0 1,186,666.71
allocation income assets
省特色药物研发企业
重点实验室)
Subsidies for online
monitoring equipment
and installations of Financial Other Related to
coalfired boilers (燃煤 60,000.00 0 0 11,250.00 0 48,750.00
allocation income assets
锅炉在线监控设备装
置补助资金)
Funds for joint R&D
and industrialization of
integrated platform for
molecular diagnostics Financial Other Related to
53,916.31 0 0 0 0 53,916.31
(集成一体化分子诊断 allocation income assets
平台的合作研发及产
业化) 资金)
Project supporting fund
for the first batch of
special funds for
scientific and Financial Other Related to
technological innovation 600,000.00 0 0 0 0 600,000.00
allocation income assets
in 2019 (2019 年度第一
批科技创新专项资金
立项配套资助)
Provincial industrial
innovation (provincial
enterprise technology
center) project in 2019 Financial Other Related to
79,229.73 0 0 0 0 79,229.73
(2019 年度省产业创新 allocation income assets
(省级企业技术中心)
项目)
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Pre-appropriation of
special grants for
industrialization of
diagnostic reagents for Financial Other Related to
4,089,721.57 0 0 0 0 4,089,721.57
COVID-19 (新型冠状 allocation income assets
病毒检测试剂产业化
项目补助金预拨)
Xiangzhou District
equipment purchase
subsidy supporting
funds (Special funds for Financial Other Related to
epidemic prevention and 9,150.21 0 0 0 0 9,150.21
allocation income assets
control) (香洲区采购设
备补贴扶持资金 (疫情
防控专项资金)
Zhuhai innovation and
enterprising team and
high-level talent
enterprising project Financial Other Related to
Phase I funds (珠海市 12,000,000.00 0 0 0 0 12,000,000.00
allocation income assets
创新创业团队和高层
次人才创业项目首期
资金)
Overall relocation and
deployment expansion Financial Other Related to
50,000,000.00 30,000,000.00 0 0 0 80,000,000.00
project (整体搬迁调迁 allocation income assets
扩建项目)
Environmental
protection bureau RTO Financial Other Related to
159,999.92 0 0 10,000.02 0 149,999.90
project special funds (环 allocation income assets
保局 RTO 项目资金)
Structure-efficiency
optimization of marine
microorganisms and
evaluation of antitumor Financial Other Related to
99,209.17 0 0 99,209.17 0 0
activity (海洋微生物构 allocation income income
效优化与抗肿瘤活性
评价)
R&D and demonstration
of key technologies for
the development and
utilization of swim
bladder (golden oyster)
marine traditional Financial Other Related to
750,000.00 250,000.00 0 0 0 1,000,000.00
Chinese medicine allocation income income
resources (鱼鳔(黄金
鮸) 海洋中药资源开发
与利用关键技术研发
与示范)
2022 Special funds for
the reconstruction of the
industrial base and the
high-quality
development of the
manufacturing industry Financial Other Related to
27,965,416.69 9,828,500.00 0 4,609,789.46 0 33,184,127.23
from the central finance allocation income assets
(2022 年中央财政产业
基础再造和制造业高
质量发展专项资金)示
范)
National Science and
Technology Major
Special Project Subsidy Financial Other Related to
Fund LZM009 (国家科 2,382,806.91 0 0 190,799.56 0 2,192,007.35
allocation income assets
技重大专项项目后补
助资金 LZM009)
Funds for scientific and
technological
cooperation in Financial Other Related to
Guangdong-Hong 0 300,000.00 0 0 0 300,000.00
allocation income assets
Kong-Macau (粤港澳科
技合作资金)
Phase-II support fund
for innovation and Financial Other Related to
0 8,000,000.00 0 0 0 8,000,000.00
entrepreneurship teams allocation income assets
in Zhuhai in 2019 (2019
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年珠海市创新创业团
队第二期资助资金)
Xiangzhou District
actively responds to the
impact of the epidemic
and maintains stability,
innovation drives Financial Other Related to
1,644,800.00 0 0 0 0 1,644,800.00
technology industry allocation income assets
project (香洲区积极应
对和疫情影响保稳创
新驱动科技工业分项)
Total 384,537,267.55 71,872,232.48 0 29,771,818.66 263,600.00 426,374,081.37
(2). Government grants recognized in income for the period by gross method
Amount recognised in Amount recognised in
Presented in Related to assets/
Projects with grants Category profit or loss in prior profit or loss in the
income statement Related to income
period period
Job stabilization subsidy (稳岗补贴) Financial allocation 577,232.17 350,819.74 Other income Related to income
Maternity benefits (生育津贴) Financial allocation 278,357.04 559,167.10 Other income Related to income
Talent quality improvement project (人才
Financial allocation 100,000.00 0 Other income Related to income
素质提升工程项目款)
2022 High-tech Enterprise Cultivation
Funding (2022 年高新技术企业培育资 Financial allocation 1,000,000.00 0 Other income Related to income
助)
Water Saving Carrier Incentive Fund (节水
Financial allocation 153,203.50 0 Other income Related to income
载体奖励资金)
2022 Industrial "Carbon Peak" Subsidy
Financial allocation 100,000.00 0 Other income Related to income
(2022 年工业"碳达峰“补贴)
Amortization of special funds for
engineering laboratories (工程实验室专项 Financial allocation 808,050.00 808,050.00 Other income Related to assets
资金项目摊销)
Industrial Development Fund (Green
Factory) Project Funding (产业发展资金 Financial allocation 200,000.00 0 Other income Related to income
(绿色工厂) 项目资助经费)
Expansion and improve efficiency (扩产增
Financial allocation 620,000.00 2,840,000.00 Other income Related to income
效)
Production line project funding (生产线项
Financial allocation 2,045,300.00 0 Other income Related to income
目资助)
Project funding for enterprises that meet
the standards for value-added growth (增 Financial allocation 1,145,100.00 0 Other income Related to income
加值增速达标企业项目资助)
Insurance premium subsidy for export (出
Financial allocation 1,020,497.00 160,000.00 Other income Related to income
口用保险保费资助款)
Major special project injection lipid
research funding (重大专项项目注射脂质 Financial allocation 500,000.00 0 Other income Related to assets
研究经费)
China Patent Award Supporting Award (中
Financial allocation 200,000.00 0 Other income Related to income
国专利奖配套奖)
Carbon Peak work pilot demonstration
project funding (“碳达峰”工作试点示范 Financial allocation 500,000.00 0 Other income Related to income
项目资助款)
Industrial development funds in Yantian
Financial allocation 0 1,574,275.12 Other income Related to income
District (盐田区产业发展基金)
2020 Enterprise R&D Financial Subsidy
Special Subsidy Fund District Matching
Financial allocation 1,400,000.00 280,000.00 Other income Related to income
Fund (2020 年企业研发财政补助专项补
助资金区配套资金)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Funds to support business development (扶
Financial allocation 1,503,000.00 1,200,000.00 Other income Related to income
持企业发展资金)
Return of land holding tax (土地使用税返
Financial allocation 703,111.26 703,111.26 Other income Related to assets
还)
Second tranche of high-level subsidies
(40%) in 2019 (2019 年认定高企补贴第 Financial allocation 400,000.00 0 Other income Related to income
二笔(40%) )
Funding for pilot demonstration projects of
industrial carbon peaking work (工业碳达 Financial allocation 100,000.00 0 Other income Related to income
峰工作试点示范项目资助款)
Government Subsidy of Special Fund for
Scientific and Technological Innovation Financial allocation 0 863,994.00 Other income Related to income
(科技创新专项资金政府补助)
Subsidies for high and new technology
enterprises and high and new technology
Financial allocation 0 1,150,000.00 Other income Related to income
products (高新技术企业及高新技术产品
项目补贴)
“Specialized and new” subsidy ( “专精特
Financial allocation 0 300,000.00 Other income Related to income
新”补贴)
Support plan on technological innovation
Financial allocation 0 2,000,000.00 Other income Related to income
projects (技术创新项目扶持计划)
Government incentive funds for full-load
production of industrial above designated
Financial allocation 0 200,000.00 Other income Related to income
scale (规模上工业满负荷生产财政奖励
资金)
Demonstration project on the preparation
of marine mollusk kinetic protein and its
Financial allocation 0 442,200.00 Other income Related to assets
application (海洋软体动物功能蛋白肽制
备及其应用示范项目)
Special support plan on promoting the
high-quality development of life
technology industries in Nanshan District Financial allocation 0 1,000,000.00 Other income Related to income
(南山区促进生命科技相关产业高质量发
展专项支持计划)
Science and technology help the economy
key special projects (科技助力经济重点 Financial allocation 0 500,000.00 Other income Related to assets
专项)
2020 Shanghai Professional Technology
Platform Capacity Enhancement Project
Financial allocation 0 1,000,000.00 Other income Related to assets
(2020 年度上海市专业技术平台能力提
升项目立项)
2022 Shanghai Technology giant (2022 年
Financial allocation 0 1,200,000.00 Other income Related to assets
上海科技小巨人)
Incentive funds for high-quality
development of industries in Jiaozuo in
Financial allocation 0 250,000.00 Other income Related to income
2023 (2023 年焦作市工业高质量发展奖
励奖金)
Special support for market access of drugs
and medical devices (药品和医疗器械市 Financial allocation 0 736,044.78 Other income Related to income
场准入专项扶持)
Support program on upgrading of
industrialization technology (产业化技术 Financial allocation 0 665,900.00 Other income Related to income
升级资助项目)
Green and low-carbon development of
Financial allocation 0 300,000.00 Other income Related to income
enterprises (企业绿色低碳发展)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
“Specialized and new” Enterprise reward
Financial allocation 0 300,000.00 Other income Related to income
projects ( “专精特新” 企业奖励项目)
New inhalation drug formulation creation
Financial allocation 0 920,106.30 Other income Related to assets
project (新型吸入给药制剂创制项目)
Export credit insurance subsidy (出口信保
Financial allocation 1,110,960.80 751,524.46 Other income Related to income
补贴)
R&D subsidy (研究开发费补助) Financial allocation 950,440.00 70,300.00 Other income Related to income
Research and development funds for new
drug for Class I Treatment of Necrosis
Factor in Human Tumour from Human Financial allocation 5,924,000.00 0 Other income Related to income
Source (I 类治疗用人源化抗人肿瘤坏死
因子 α 单克隆抗体新药的研制资金)
Government Subsidy for Long-acting
Microspheres Major New Drug Creation Financial allocation 1,202,654.94 1,202,654.94 Other income Related to assets
(长效微球重大新药创制政府补助)
R&D and industrialization of innovative
Ilaprazole Series (艾普拉唑系列创新药物 Financial allocation 16,265,800.32 2,455,000.02 Other income Related to assets
研发及产业化)
Fiscal Subsidy and Operating Subsidy (财
Financial allocation 21,859,039.00 42,998,690.80 Other income Related to income
政补贴及经营运营补贴)
R&D and Commercialisation of Mouse
Nerve Growth Factor for Injection (注射用 Financial allocation 5,280,044.64 5,280,044.64 Other income Related to assets
鼠神经生长因子研发及产业化)
Import discount and supporting funds (进
Financial allocation 211,356.00 0 Other income Related to income
口贴息及配套资金)
Promoting Imports of Foreign Trade
Development Special Fund (外贸经济发 Financial allocation 1,230,271.00 190,505.51 Other income Related to income
展专项资金)
Technical transformation project of Shenqi
Fuzheng Injection with flexible bag (软袋 Financial allocation 1,911,764.70 1,911,764.70 Other income Related to assets
(参芪扶正注射液) 技改项目)
Demonstration project on the application
of solar photovoltaic architecture (太阳能 Financial allocation 551,000.04 551,000.04 Other income Related to assets
光电建筑应用示范项目)
Subsidies for high and new technology
enterprises and high and new technology
Financial allocation 100,000.00 418,004.00 Other income Related to income
products (高新技术企业及高新技术产品
项目补贴)
Funds for market exploration by SMEs (中
Financial allocation 0 2,139,156.30 Other income Related to income
小企业开拓市场项目资金)
Provision for technology transformation
funds and subsequent grants (技术改造资 Financial allocation 3,687,400.00 0 Other income Related to income
金拨款及事后补奖)
Provision for technology transformation
funds and subsequent grants (技术改造资 Financial allocation 1,257,556.68 1,257,556.68 Other income Related to assets
金拨款及事后补奖)
Scientific technology award and subsidy
for technological innovative project (科学 Financial allocation 1,140,000.00 -100,000.00 Other income Related to income
技术奖及科技创新项目资助)
Patent (Intellectual Property) Support Fund
Financial allocation 0 457,096.00 Other income Related to income
(专利（知识产权）资助资金)
Industrial revitalisation supporting funds
Financial allocation 579,000.00 579,000.00 Other income Related to assets
(产业振兴扶持资金)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Employment Assurance and Re-
employment and Attraction to Graduates of
Tertiary Academic Institutions Subsidy (企 Financial allocation 1,690,234.86 398,303.65 Other income Related to income
业稳岗及再就业和吸纳高校毕业生补贴
款)
Enterprise Technology Center Innovation
Capacity Development (Antibody
Financial allocation 222,877.68 222,877.68 Other income Related to assets
Laboratory) 企业技术中心创新能力建设
（抗体药物试验室）
Special fund from the Ministry of Industry
and Information Technology (工业和信息 Financial allocation 0 223,500.00 Other income Related to income
化专项资金)
Supporting subsidy for “Talents Plan” and
subsidy for talents introduction and
Financial allocation 583,774.23 638,700.00 Other income Related to income
cultivation ( “人才计划”配套补贴及引才
育才补贴)
Rewards for the integration of
informatization and industrialization (两化 Financial allocation 500,000.00 0 Other income Related to income
融合奖励)
Special funds for key leading enterprises in
the 13th Five-Year Plan (2019) (十三五重 Financial allocation 5,503,400.00 8,501,100.00 Other income Related to income
点领军企业专项资金 (2019 年))
Special capital replenishment for industrial
enterprise Restructuring (工业企业结构调 Financial allocation 1,000,000.00 0 Other income Related to income
整专项资金)
Special Funds for Promoting High-quality
Economic Development (促进经济高质量 Financial allocation 0 4,609,789.46 Other income Related to assets
发展专项资金)
Special Funds for Promoting High-quality
Economic Development (促进经济高质量 Financial allocation 0 11,837,821.00 Other income Related to income
发展专项资金)
“Specialized and new” subsidy ( “专精特
Financial allocation 950,000.00 300,000.00 Other income Related to income
新”补贴)
National special funds for foreign trade in
2020 appropriated by the Department of
Science and Technology of Guangdong Financial allocation 741,000.00 0 Other income Related to income
Province (广东省科学技术厅拨来 2020
年度国家外专款)
Hengqin Guangdong-Macao Deep
Cooperation Zone Factory Rental Subsidy Financial allocation 345,012.00 0 Other income Related to income
(横琴粤澳深度合作区厂房租金补贴)
National Science and Technology Major
Special Project Subsidy Fund LZM009 (国
Financial allocation 2,171,293.53 190,799.56 Other income Related to assets
家科技重大专项项目后补助资金
LZM009)
Data-driven industrial chain collaboration
platform demonstration project (数据驱动 Financial allocation 365,000.00 365,000.00 Other income Related to assets
的产业链协同平台示范项目)
Key projects of industrial core and key
technologies of Zhuhai (Dantrolene) (珠海
Financial allocation 0 3,000,000.00 Other income Related to assets
市产业核心和关键技术攻关方向项目
(丹曲林钠) )
Project funds for promoting the
development of the biomedical industry Financial allocation 0 9,415,420.00 Other income Related to income
(促进生物医药产业发展用途项目资金)
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Application of artificial intelligence in
triptorelin long-acting microsphere
Financial allocation 0 -479,813.48 Other income Related to income
preparation (人工智能在曲普瑞林长效微
球制剂中的应用)
Others Financial allocation 2,051,204.73 2,503,218.61 Other income Related to assets
Others Financial allocation 1,446,266.47 1,152,061.41 Other income Related to income
Total 94,185,202.59 123,344,744.28
Ⅵ. Change to Consolidation Scope
1.Business combination not involving enterprises under common control
□Applicable √N/A
2.Business combination involving enterprises under common control
□Applicable √N/A
3.Reverse purchase
□Applicable √N/A
4. Disposal of subsidiaries
Was there any circumstance under which a single disposal of the investment in subsidiaries will lose
control
□Applicable √N/A
Other descriptions:
□Applicable √N/A
5. Changes in scope of consolidation due to other reasons
Descriptions of changes in scope of consolidation caused by other reasons (such as establishment of a
new subsidiary and liquidation of a subsidiary, etc.) and their relevant information:
√Applicable □N/A
Change to scope of consolidation in the subsidiary Livzon Group
(1) Business combination involving enterprises not under common control
① Business combination involving enterprises not under common control during the Period
Revenue of Net profit of
Time of Cost of Proportion Method of Basis for acquiree from acquiree from
Purchase
Name of acquiree obtaining obtaining of equity obtaining determining the purchase the purchase
date
equity equity obtained equity purchase date date to the end date to the end
of the Period of the Period
Shanghai
Zhongtuo Completion
Pharmaceutical 2023.3.6 25,000,000.00 100 Purchase 2023.3.6 of asset 483,018.86 -988,386.12
Technology Co., delivery
Ltd.
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
② Combination cost and goodwill
Item Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd.
Combination cost:
Cash 25,000,000.00
Total combination cost 25,000,000.00
Less: Share of the fair value of identifiable net assets
3,129,194.91
obtained
Goodwill 21,870,805.09
③ The purchaser can identify the assets and liabilities on the purchase date
Shanghai Zhongtuo Pharmaceutical Technology Co., Ltd.
Item
Fair value at the purchase date Book value at the purchase date
Assets
Current assets 3,133,248.41 3,133,248.41
Non-current assets 1,454,117.80 1,454,117.80
Liabilities:
Current liabilities 1,458,171.30 1,458,171.30
Net assets 3,129,194.91 3,129,194.91
Less: Minority interests
Net assets acquired by consolidation 3,129,194.91 3,129,194.91
(2) Other changes
On 1 February 2023, the Company and Livzon Group established Lijian (Guangdong) Animal Healthcare
Co., Ltd. (丽健（广东）动物保健有限公司) with a registered capital of RMB200 million, of which, Livzon
Group contributed RMB102 million, accounting for 51% of its registered capital; and the Company
contributed RMB98 million, accounting for 49% of its registered capital.
On 8 February 2023, the Company and Livzon Group established Wuhan Kangli Health Investment
Management Co., Ltd. (武汉康丽健康投资管理有限公司) with a registered capital of RMB1,000 million,
of which, Livzon Group contributed RMB600 million, accounting for 60% of its registered capital; and the
Company contributed RMB400 million, accounting for 40% of its registered capital.
On 13 April 2023, Zhuhai Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd., a
subsidiary of Livzon Group, and Livzon Group Limin Pharmaceutical Manufacturing Factory established
Macau Livzon Traditional Chinese Medicine Modernization Technology Co., Ltd. (澳门丽珠中药现代化
科技有限公司) with a registered capital of MOP100,000, each of them accounting for 70% and 30% of its
registered capital, respectively.
On 15 March 2023, Gongshan Livzon Pharmaceutical Technology Limited (贡山丽珠药源科技有限公司),
a subsidiary of Livzon Group, was deregistered.
6. Others
□Applicable √N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Ⅶ Equity in Other Entities
1. Interests in subsidiaries
(1). Group structure
√Applicable □N/A
Main operating Place of Shareholding (%)
Name of subsidiary Business nature Acquisition method
location registration Direct Indirect
Topsino Industries Limited (Topsino
Hong Kong Hong Kong Business 100 0 Set-up by investment
Industries)
Shenzhen Taitai Genomics Inc. Co.,
Shenzhen Shenzhen Industry 75 25 Set-up by investment
Ltd. (Taitai Genomics)
Shenzhen Taitai Pharmaceutical
Industry Co., Ltd. (Taitai Shenzhen Shenzhen Industry 100 0 Set-up by investment
Pharmaceutical)
Health Investment Holdings Ltd. The British Virgin The British Virgin
Investment 0 100 Set-up by investment
(Health Investment) Islands Islands
Joincare Pharmaceutical Group The British Virgin The British Virgin
Investment 0 100 Set-up by investment
Industry Co.,Ltd.(BVI) * Islands Islands
Joincare Pharmaceutical Group
Industry Co.,Ltd. (CAYMAN Cayman Islands Cayman Islands Investment 0 100 Set-up by investment
ISLANDS)
Xinxiang Haibin Pharmaceutical
Henan Xinxiang Henan Xinxiang Industry 0 100 Set-up by investment
Co., Ltd. (Xinxiang Haibin)
Shenzhen Fenglei Electric Power
Investment Co., Ltd. (Fenglei Shenzhen Shenzhen Investment 100 0 Set-up by investment
Electric Power)
Jiaozuo Joincare Bio Technological
Henan Jiaozuo Henan Jiaozuo Industry 75 25 Set-up by investment
Co., Ltd.(Jiaozuo Joincare)
Shanghai Frontier Health
Pharmaceutical Technology Co., Shanghai Shanghai Industry 65 0 Set-up by investment
Ltd.(Shanghai Frontier)
Shenzhen Taitai Biological
Technology Co., Ltd. (Taitai Shenzhen Shenzhen Industry 100 0 Set-up by investment
Biological)
Guangzhou Joincare Respiratory
Medicine Engineering Technology Guangzhou Guangzhou Industry 0 26 Set-up by investment
Co., Ltd.(Joincare Respiratory)
Guangdong Taitai Forenstic Test
Shenzhen Shenzhen Business 0 100 Set-up by investment
Institute (Forenstic Test)
Joincare Haibin Pharmaceutical Co.,
Shenzhen Shenzhen Industry 25 75 Set-up by investment
Ltd (Joincare Haibin)
Shenzhen Haibin Pharmaceutical Business combination not
Shenzhen Shenzhen Industry 97.87 2.13
Co., Ltd. (Haibin Pharma) under common control
Joincare Daily-Use & Health Care Business combination not
Shenzhen Shenzhen Business 80 20
Co., Ltd. (Joincare Daily-Use) under common control
Health Pharmaceutical (China) Business combination not
Zhuhai Zhuhai Industry 0 100
Limited (Health China) under common control
Livzon Pharmaceutical Group Inc. Business combination not
Zhuhai Zhuhai Industry 23.66 21.11
(Livzon Group) *Note 1 under common control
Hong Kong Health Pharmaceutical Business combination not
Hong Kong Hong Kong Investment 0 100
Industry Company Limited under common control
Health Pharmaceutical Industry Business combination not
Hong Kong Hong Kong Investment 0 100
Company Limited under common control
Shenzhen Hiyeah Industry Co., Ltd Business combination not
Shenzhen Shenzhen Business 97.58 2.42
(Hiyeah Industry ) under common control
Guangzhou Hiyeah Industry Co., Business combination not
Guangzhou Guangzhou Industry 0 100
Ltd. under common control
Zhongshan Renhe Health Products Business combination not
Zhongshan Zhongshan Industry 0 100
Co., Ltd. under common control
Shenzhen Jiekang Health Care Co., Business combination not
Shenzhen Shenzhen Industry 0 100
Ltd. under common control
Joincare (Guangdong) Special
medicine Food Co., Ltd. ( Joincare Shaoguan Shaoguan Industry 100 0 Set-up by investment
Special medicine Food)
229 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Main operating Place of Shareholding (%)
Name of subsidiary Business nature Acquisition method
location registration Direct Indirect
Henan Joincare Biomedical Research
Jiaozuo Jiaozuo Industry 0 70.13 Set-up by investment
Institute Co., Ltd.
Jiaozuo Jianfeng Biotechnology Co.,
Jiaozuo Jiaozuo Industry 0 66.5 Set-up by investment
Ltd.
*Note 1: Invested subsidiaries of the Company controlled by Livzon Group
（1）Shanghai Frontier Health Pharmaceutical Technology Co., Ltd. (上海方予健康医药科技有限公司) and the
Company's subsidiary Livzon Group established Shanghai Liyu Biomedical Technology Co., Ltd. (上海丽予生
物医药技术有限责任公司) on 30 March 2021. Livzon Group holds 55% of the shares and Shanghai Frontier
Health Pharmaceutical Technology Co., Ltd holds 45%.
(2) On 1 February 2023, the Company and Livzon Group established Lijian (Guangdong) Animal Healthcare Co.,
Ltd. (丽健（广东）动物保健有限公司) with Livzon Group and the Company holding 51% and 49% of equity
interests, respectively.
(3) On 8 February 2023, the Company and Joincare Pharmaceutical Group Industry Co., Ltd. established Lijian
(Guangdong) Animal Healthcare Co., Ltd. (武汉康丽健康投资管理有限公司) with Livzon Group and the
Company holding 60% and 40% of equity interests, respectively.
（4）Zhuhai Livzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司) is a subsidiary within the
scope of Livzon Group's consolidation. It was originally 100% indirectly held by Livzon Group. Due to the
restructuring of the shareholding structure of the subsidiary, Livzon Group holds 51% of its shares, the Company
holds 33.07% of the shares, YFPharmab Limited holds 8.43% of the shares, and Hainan Lishengjuyuan Investment
Partnership (Limited Partnership) (海南丽生聚源投资合伙企业(有限合伙)) holds 7.50%
Other descriptions:
Subsidiaries not included in the scope of consolidation in the current period:
Name of subsidiary Registered Capital Actual investment Interest held
Guangzhou Hiyeah Industry Co., Ltd. 3,000,000.00 3,000,000.00 100%
Zhongshan Renhe Health Products Co., Ltd. 500,000.00 500,000.00 100%
Guangzhou Hiyeah Industry Co., Ltd. (广州市喜悦实业有限公司), Zhongshan Renhe Health Products Co., Ltd.
(中山市仁和保健品有限公司), are wholly-owned subsidiaries of Shenzhen Hiyeah. They entered the liquidation
process in 2008, and has been out of business for many years, and completed the tax cancellation procedures, so
they were not included in the scope of the consolidated.
(2). Significant non-wholly owned subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
Profit or loss Balance of minority
Name of Shareholding of Dividend paid to
attributable to minority interests at period
subsidiary minority interest minority interest
interest end
Livzon Group 55.2266 626,584,628.11 817,351,995.09 7,407,755,714.92
230 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Descriptions of the difference between the shareholding ratio of minority shareholders and their proportion
of voting rights in a subsidiary:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
(3). Principal financial information of significant non-wholly owned subsidiaries
√Applicable □N/A
Unit: 100,000,000 Yuan Currency: RMB
Closing balance Beginning balance
Name of Non- Non-
Current Total Current Non-current Total Current Total Current Non-current Total
subsidiary current current
assets assets liabilities liabilities liabilities assets assets liabilities liabilities liabilities
assets assets
Livzon
179.27 77.99 257.26 82.39 32.37 114.76 169.87 78.78 248.65 73.97 25.32 99.29
Group
Current period Prior Period
Cash flow Cash flow
Name of Total Total
from from
subsidiary Revenue Net profit Comprehensive Revenue Net profit Comprehensive
operating operating
income income
activities activities
Livzon Group 66.90 11.74 11.77 12.27 63.03 11.18 11.51 14.26
(4). Significant restrictions on the use of enterprise group assets and settlement of enterprise
group debts:
□Applicable √N/A
(5). Financial supports or other supports offered for the structured entities included in the
scope of consolidated financial statements:
□Applicable √N/A
Other descriptions:
□Applicable √N/A
2. Changes in share of owners' equity in subsidiaries and still controls the subsidiaries
□Applicable √N/A
3. Interests in joint arrangements or associates
√Applicable □N/A
(1). Significant joint arrangements or associates
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of joint Main Shareholding(%)
Place of Business Accounting treatment of
arrangements or operating
registration nature Direct Indirect joint investment
associates location
231 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Jiaozuo Jinguan Jiaozuo Jiaozuo City,
Electricity
Jiahua Electric City, Henan Henan 0.00 49 Equity method
production,
Power Co., Ltd. Province Province
Tianjin
Manufacture of
Tongrentang Tianjin Tianjin 0.00 40 Equity method
medicine
Group Co., Ltd.
(2). Key financial information of significant joint arrangements
□Applicable √N/A
(3). Main financial information of significant associates
√Applicable □N/A
① Jinguan Electric Power
Unit: Yuan Currency: RMB
Closing balance / Amount for the Beginning balance / Amount for
Item period the prior period
Jinguan Electric Power Jinguan Electric Power
Current assets 983,674,798.10 1,034,890,763.04
Including: Cash and cash equivalents 145,046,368.84 193,286,823.41
Non-current assets 293,533,049.66 274,836,800.49
Total assets 1,277,207,847.76 1,309,727,563.53
Current liabilities 694,019,787.24 734,194,376.70
Non-current liabilities 12,284,097.25 12,419,097.25
Total liabilities 706,303,884.49 746,613,473.95
Net assets 570,903,963.27 563,114,089.58
Including: Minority interests 0.00 0.00
Owners’ equity attributable to
570,903,963.27 563,114,089.58
parent company
Share of net assets calculated based on
279,742,942.00 275,925,903.89
shareholding ratio
Adjustment items 9,603,504.56 9,612,591.63
Goodwill
Unrealized profit on internal
transactions
Others 9,603,504.56 9,612,591.63
Carrying value of equity investment in
289,346,446.56 285,538,495.52
associates
Fair value of publicly quoted equity
investments of associates
Operating income 425,894,049.32 545,919,608.69
Financial expenses 874,470.98 5,790,628.01
Income tax expenses 2,568,597.39 0.00
Net profit 7,789,873.69 1,656,551.92
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income 7,789,873.69 1,656,551.92
Net cash flows from operating activities -31,462,568.89 120,800,417.88
Dividends received from joint ventures in the
current period
②Tianjin Tongrentang Group Co., Ltd.
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Tianjin Tongrentang Group Co., Ltd.
Item
2023.6.30
Owners’ equity attributable to parent company 591,654,692.05
Share of net assets by shareholding 236,661,876.82
Adjustments
Including: Goodwill 498,457,683.68
Carrying value of equity investment in associates 735,119,560.50
Fair value of publicly quoted equity investments
Continued:
Tianjin Tongrentang Group Co., Ltd.
Item
Amount for the period
Operating income 577,306,842.17
Dividends received by the company from associates in the current
0.00
period
Other descriptions:
√Applicable □N/A
The Company calculated share of assets by shareholding ratio based on the amount attributable to the parent
company in the associates’ consolidated financial statements. The amounts of associates on the consolidated
financial statements take into account the fair value of net identifiable assets and liabilities of the associate
when acquiring the investment and the effect of unifying accounting policies. The above data of Tianjin
Tongrentang is based on the performance forecast.
(4). Summary of financial information of other insignificant associates
√Applicable □N/A
Unit: Yuan Currency: RMB
Closing balance/ Current
Beginning balance/Prior period
period
Associates:
Total carrying amount of investment 405,711,908.91 389,448,001.30
The following amount are calculated on the basis of shareholding ratio
Net profit -7,562,749.17 -5,650,897.40
Other comprehensive income 0.00 0.00
Total comprehensive income -7,562,749.17 -5,650,897.40
(5) Description of significant restrictions on the ability of joint ventures or associates to transfer funds
to the company
□Applicable √N/A
(6) Excess losses incurred by joint ventures or associates
□Applicable √N/A
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(7) . Unconfirmed commitments related to joint venture investment
□Applicable √N/A
(8) . Contingent liabilities related to investments in joint ventures or associates
□Applicable √N/A
4. Important joint operations
□Applicable √N/A
5. Equity in structured entities not included in the scope of consolidated financial statements
Relevant descriptions of structured entities not included in the scope of consolidated financial statements:
□Applicable √N/A
6. Others
□Applicable √N/A
Ⅷ. Risks Management of Financial Instruments
√Applicable □N/A
The major financial instruments of the Company include cash, bills receivable and accounts receivable,
other receivables, non-current assets due within one year, other current assets, financial assets held for
trading, other equity instrument investments, long-term receivables, bills payable and accounts payable,
other payables, short-term borrowings, financial liabilities held for trading, non-current liabilities due
within one year, short-term borrowings, bonds payable and long-term payables. The details of these
financial instruments are disclosed in the respective notes. The financial risk of these financial
instruments and financial management policies used by the Company to minimize the risk are disclosed
as below. The management of the Company manages and monitors the exposure of these risks to ensure
the above risks are controlled in the limited range.
1. Management objectives and policies of risks
The operation activities of the Company are subject to various financial risks: market risks (mainly
including foreign exchange risks and interest rate risks), credit risks and liquidity risks. The Company
formulates an overall risk management plan with respect to the unforeseeability of the financial market
in order to minimise the potential adverse impacts on the financial performance of the Company.
(1) Foreign exchange risks
The Company conducts its operation primarily in China. Substantially all of the transactions were
denominated and settled in Renminbi. However, the Company still has certain imports and exports
businesses regarding APIs and diagnostic reagents that are settled in U.S. dollar, Euro and Japanese Yen.
The Company’s businesses outside China (mainly in Hong Kong, India, Europe) are settled in Hong
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Kong dollars, U.S. dollar and Euro dollar. In addition, the Company will have foreign currency loans
according to the operating needs. In respect of the above, the Company still exposes to certain foreign
exchange risks. Taking into account the foreign exchange risks acceptable by the Company, the
Company adopted Derivative instruments to control foreign exchange risk. However, as to the foreign
exchange risk in loans, the Company shall closely monitor the trend of the exchange rate of Renminbi,
and timely adjust the extent of borrowings, so as to minimise its risks.
Financial assets and liabilities in foreign currencies held by the Company expressed in Renminbi are
stated below:
① As at 2023.06.30
Unit: 1,000 Yuan
Item HKD USD EUR JPY GBP MOP
Financial assets in foreign
currency —
Cash and bank balances 1,064,944.50 1,722,097.20 742.27 15,085.43 15.45 5,750.13
Financial assets held for
75,320.98 0.00 0.00 0.00 0.00 0.00
trading
Accounts receivable 0.00 548,313.67 0.00 0.00 0.00 150.01
Dividends receivable 264.70 0.00 0.00 0.00 0.00 0.00
Other receivables 2,091.89 0.00 0.00 0.00 0.00 161.54
Other current assets 0.00 98,970.69 0.00 0.00 0.00 0.00
Other equity instruments
441,193.91 0.00 0.00 0.00 0.00 0.00
investment
Subtotal: 1,583,815.98 2,369,381.56 742.27 15,085.43 15.45 6,061.69
Financial liabilities in
0.00 0.00 0.00 0.00 0.00 0.00
foreign currency —
Accounts payable 0.00 910.46 44.63 9,809.45 0.00 0.00
Dividends payable 235,488.15 0.00 0.00 0.00 0.00 0.00
Other payables 2,489.83 27,172.66 0.00 0.00 0.00 0.00
Subtotal: 237,977.98 28,083.12 44.63 9,809.45 0.00 0.00
②As at 2022.12.31
Unit: 1,000 Yuan
Item HKD USD EUR JPY GBP MOP CHF
Financial assets in foreign currency —
Cash and bank balances 689,008.76 1,795,183.72 702.84 18,052.98 16.29 4,272.78 0.00
Financial assets held for trading 87,193.75 0.00 0.00 0.00 0.00 0.00 0.00
Accounts receivable 0.00 498,180.41 0.00 0.00 0.00 1,097.96 0.00
Other receivables 2,849.00 0.15 0.00 0.00 0.00 504.53 0.00
Other current assets 0.00 92,815.74 0.00 0.00 0.00 0.00 0.00
Other equity instruments investment 524,464.51 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal: 1,303,516.02 2,386,180.02 702.84 18,052.98 16.29 5,875.27 0.00
Financial liabilities in foreign currency—
Short-term loan 0.00 13,464.86 0.00 0.00 0.00 0.00 0.00
Accounts payable 0.00 3,569.18 42.05 14,627.29 0.00 0.00 141.89
Other payables 2,583.45 27,967.54 0.00 0.00 0.00 0.00 0.00
Subtotal: 2,583.45 45,001.58 42.05 14,627.29 0.00 0.00 141.89
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As at 30 June 2023, in respect of the Company’s financial assets and liabilities denominated in foreign
currencies such as Hong Kong dollar, U.S. dollar, Euro dollar, Japanese Yen and Macau Pataca, should the
value of RMB appreciate or depreciate by 5% against foreign currencies such as Hong Kong dollar, U.S.
dollar, Euro, Japanese Yen and Macau Pataca, and other factors remain unchanged, the Company would be
subject to an increase or decrease in profit of approximately RMB184,959.36 thousand (31 December 2022:
approximately RMB182,597.36 thousand).
(2). Interest rate risk
The Company’s exposures to interest rate risk are mainly arising from interest-bearing liabilities such as bank
borrowings and bonds payables. The interest rates are affected by the macro monetary policies of China;
hence the Company will face the risks arising from fluctuation of interest rates in the future.
The finance department of the head office of the Company continues to monitor the level of interest rate of
the Company. The rise in the interest rate will increase the cost of additional interest-bearing liabilities and
the interest expenses of the Company’s outstanding interest-bearing liabilities of which the interests are
calculated at floating rates, and impose material adverse impact on the financial results of the Company. The
management will make timely adjustment based on the updated market conditions. The directors of the
Company consider that the future changes in the interest rate will have no material adverse impact on the
operating results of the Company.
(3). Credit risk
Credit risk is primarily attributable to cash and cash equivalents, restricted funds, accounts receivables and
other receivables. In respect of cash at banks, they were placed at several banks with good reputations, for
which the credit risk was limited. In respect of receivables, the Company shall assess the credit limit granted
to customers for credit purpose. Moreover, as the customer base of the Company is large, the credit risk on
accounts receivables is not concentrated. In terms of bills receivable settlement, external payments are settled
with bills receivable with priority and most of the remaining bills are high-quality bills with maturity within
three months; thus none expected major credit risk exits. In addition, the provision made on the impairment
of accounts receivables and other receivables are adequate to manage the credit risk.
Among the accounts receivable of the Company, the accounts receivable of the top five customers accounted
for 9.78% (31 December 2022: 11.98%); among the other receivables of the Company, the other receivables
of the top five customers accounted for 35.74% (31 December 2022: 46.23%).
(4). Liquidity risk
The Company adopts prudent liquidity risk management for the sufficient supply of monetary funds and
liquidity. It secures readily available credit loans from banks mainly by maintaining adequate monetary funds
and banking facilities. Apart from indirect financing from banks, a number of financing channels were
available, such as direct financing by inter-bank market including short-term financing bills and medium-
term financing bills, corporate bonds etc. These instruments can effectively reduce the effects of scale of
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
financing and the macro monetary policies of China on indirect bank financing, which shall secure adequate
funds in a flexible manner.
As at the date of the balance sheet, the contractual cash flows of financial assets and financial liabilities are
presented below by term of maturity:
①As at 2023.06.30
Item Within a year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Cash and bank balances 14,459,790,383.84 0.00 0.00 0.00 14,459,790,383.84
Financial assets held for
trading 90,560,120.03 0.00 0.00 0.00 90,560,120.03
Notes receivable 2,170,075,201.62 0.00 0.00 0.00 2,170,075,201.62
Accounts receivable 3,193,959,089.23 0.00 0.00 0.00 3,193,959,089.23
Other receivables 105,444,746.96 0.00 0.00 0.00 105,444,746.96
Non-current assets 111,489,549.76 0.00 0.00 0.00 111,489,549.76
Subtotal: 20,131,319,091.44 0.00 0.00 0.00 20,131,319,091.44
Financial liabilities:
Short-term loans 2,126,000,000.00 0.00 0.00 0.00 2,126,000,000.00
Financial liabilities held
for trading 21,644,248.86 0.00 0.00 0.00 21,644,248.86
Notes payable 1,729,003,530.95 0.00 0.00 0.00 1,729,003,530.95
Accounts payable 824,340,189.33 0.00 0.00 0.00 824,340,189.33
Other payables 4,070,004,397.43 0.00 0.00 0.00 4,070,004,397.43
Other current liabilities 83,440,368.95 0.00 0.00 0.00 83,440,368.95
Non-current liabilities
due within one year 62,798,499.68 0.00 0.00 0.00 62,798,499.68
Lease liabilities 0.00 12,104,847.17 5,573,447.52 0.00 17,678,294.69
Long term loans 0.00 1,608,118,419.41 2,355,145,019.53 0.00 3,963,263,438.94
Subtotal: 8,917,231,235.20 1,620,223,266.58 2,360,718,467.05 0.00 12,898,172,968.83
②As at 2022.12.31
Item Within a year 1-2 years 2-5 years Over 5 years Total
Financial assets:
Cash and bank balances 14,808,488,110.96 0.00 0.00 0.00 14,808,488,110.96
Financial assets held for
trading 109,015,664.98 0.00 0.00 0.00 109,015,664.98
Notes receivable 1,959,985,016.85 0.00 0.00 0.00 1,959,985,016.85
Accounts receivable 3,103,758,850.15 0.00 0.00 0.00 3,103,758,850.15
Other receivables 52,535,740.14 0.00 0.00 0.00 52,535,740.14
Non-current assets 104,859,166.96 0.00 0.00 0.00 104,859,166.96
Subtotal: 20,138,642,550.04 0.00 0.00 0.00 20,138,642,550.04
Financial liabilities:
Short-term loans 2,126,050,615.06 0.00 0.00 0.00 2,126,050,615.06
Financial liabilities held
for trading 755,634.43 0.00 0.00 0.00 755,634.43
Notes payable 1,635,906,989.22 0.00 0.00 0.00 1,635,906,989.22
Accounts payable 943,905,580.91 0.00 0.00 0.00 943,905,580.91
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Item Within a year 1-2 years 2-5 years Over 5 years Total
Other payables 3,680,334,360.88 0.00 0.00 0.00 3,680,334,360.88
Other current liabilities 83,541,891.93 0.00 0.00 0.00 83,541,891.93
Non-current liabilities due
within one year 63,077,260.98 0.00 0.00 0.00 63,077,260.98
Lease liabilities 0.00 14,509,839.81 8,972,646.26 0.00 23,482,486.07
Long term loans 0.00 907,182,927.81 2,323,661,115.07 0.00 3,230,844,042.88
Subtotal: 8,533,572,333.41 921,692,767.62 2,332,633,761.33 0.00 11,787,898,862.36
2. Capital management
The capital management policies are made to keep the continuous operation of the Company, to enhance
the return to shareholders, to benefit other stakeholders and to maintain the best capital structure to
minimize the cost of capital.
For the maintenance or adjustment of the capital structure, the Company might adjust financing method,
the amount of dividends paid to shareholders, return capital to shareholders, issue new shares and other
equity instruments or make an asset disposal to reduce the liabilities.
The Company monitors the capital structure with gearing ratio (calculated by dividing total liabilities
by total assets). On 30 June 2023, the Company’s gearing ratio is 39.94% (31 December 2022: 38.37%).
3. Transfer of financial assets
(1). Financial assets which are transferred but have not been derecognised in their entirety
None.
(2). Financial assets which have been transferred and ceased to be recognised but still have involvement
with the transferor
During the Period, the Bank discounted bank acceptance bills to the bank of RMB206,754,529.57
(previous period: RMB407,822,740.99). Since the principal risks and rewards, such as interest rate risks
associated with these bank acceptance bills, have been transferred to the banks, the Company
derecognizes discounted unmatured bank acceptance bills. According to the discount agreement, if the
bank acceptance bills are not accepted when due, the bank has the right to require the Company to pay
the outstanding balance. As a result, the Company continued to engage in discounted bank acceptance
bills, which amounted to RMB153,755,208.00 (31 December 2022: RMB422,899,944.56) as at 30 June
2023.
As of 30 June 2023, the Company’s carrying amounts of bank acceptance bills undue and endorsed to
suppliers for settling account payables is RMB526,352,414.45 (31 December 2022:
RMB542,620,475.62); the Company has no commercial acceptance bills undue and endorsed to
suppliers for settling account payables in the period (31 December 2022: Nil). In accordance with the
Negotiable Instruments Law, the holders of the bills have a right of recourse against the Company if
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
payment is refused by the bank of acceptance (the “Continuing Involvement”). In the opinion of the
Company, the Company has transferred substantially all risks and rewards. Accordingly, their full
carrying amounts and the corresponding account payables have been derecognised. The maximum loss
and the undiscounted cash flows from the Continuing Involvement and repurchasing is equal to their
carrying amounts. In the opinion of the Company, the fair values of the Continuing Involvement are not
significant.
During the 6-month period ended 30 June 2023, no gain or loss was generated by the Company on the
date of transfer of the bills. The Company had no current or accumulated gain or loss arising from the
continuing involvement in financial assets which had been derecognised. The endorsement was incurred
evenly throughout the period.
Ⅸ. Fair Value
1.Closing balance of the fair value of assets and liabilities measured at fair value
√Applicable □N/A
Unit: Yuan Currency: RMB
Closing balance of fair value
Level 2 fair
Item Level 1 fair value Level 3 fair value
value Total
measurement measurement
measurement
I. Recurring fair value measurement
（Ⅰ）Financial assets held for trading 103,583,153.41 5,432,511.57 0.00 109,015,664.98
1. Financial assets at fair value
through profit or loss
（1）Debt instruments investment 934,289.94 0.00 0.00 934,289.94
（2）Equity instruments investment 102,648,863.47 0.00 0.00 102,648,863.47
（3）Derivative financial assets 0.00 5,432,511.57 0.00 5,432,511.57
2. Financial asset designated as at fair
value through profit or loss
（1）Investments in debt instruments
（2）Investments in equity instruments
(II) Other debt investments
(III) Other investments in equity
141,235,838.68 0.00 1,051,691,795.90 1,192,927,634.58
instruments
(IV) Investment properties
1. A land use right that is used to be
leased out.
2. A building that is leased out.
3. A land use right held for transfer
upon capital appreciation
(V) Biological asset
1. Consumable biological assets
2. Productive biological assets
Total assets measured at fair value on
244,818,992.09 5,432,511.57 1,051,691,795.90 1,301,943,299.56
a recurring basis
(VI) Financial liabilities held for trading
1. Financial liabilities at fair value
through profit or loss
Including: Issued tradable bonds
Derivative financial liabilities 0.00 21,644,248.86 0.00 21,644,248.86
Others
2. Financial liabilities designated as at
fair value through profit or loss
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Total liabilities measured at fair value
0.00 21,644,248.86 0.00 21,644,248.86
on a recurring basis
II. Non-recurring fair value
measurement
(Ⅰ) Assets held-for-sale 0.00 0.00 0.00 0.00
Total assets measured at fair value on a
0.00 0.00 0.00 0.00
non-recurring basis
Total liabilities measured at fair value
0.00 0.00 0.00 0.00
on a non-recurring basis
During January to June 2023, ELICIO THERAPEUTICS, INC. and Carisma Therapeutics, Inc., in
which Livzon Group, a subsidiary of the Company, holds investments, were listed on the NASDAQ
Stock Exchange, and Beijing Luzhu Biotechnology Co., Ltd. (北京绿竹生物技术股份有限公司), in
which the Company holds investments, was listed on the Hong Kong Stock Exchange. As a result, the
fair value measurement of this investment in other equity instruments transferred from level 3 to level
1; except for this investment in other equity instruments, there were no transfers of the fair value
measurements between level 1 and level 2 and no transfers into or out of level 3.
2.Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
√Applicable □N/A
The basis for determining the market price of level 1 fair value measurement items is when listed and
traded on the Shanghai Stock Exchange, Shenzhen Stock Exchange, Hong Kong Stock Exchange and
the United States, its fair value is determined by the closing price on the last trading day of the reporting
period.
3.Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 2 fair value measurement items
√Applicable □N/A
For the items in level 2 fair value measurement which uses valuation techniques and qualitative and
quantitative information of important parameters to determine the fair value. For derivative financial
instruments such as foreign exchange forward contracts, the fair value is determined based on the quoted
forward exchange rate corresponding to the expiring contract.
Fair value at the End
Item Valuation techniques
of the Period
Calculated and determined based on the quoted forward
Derivative financial assets 5,432,511.57
exchange rate corresponding to the expiring contract
Calculated and determined based on the quoted forward
Derivative financial liabilities 21,644,248.86
exchange rate corresponding to the expiring contract
4.Valuation techniques and qualitative and quantitative information of key parameters adopted for
continuous and non-continuous level 3 fair value measurement items
√Applicable □N/A
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
For the items in level 3 fair value measurement uses valuation techniques and qualitative and quantitative
information of important parameters to determine the fair value. For some other equity instruments held,
the fair value is based on the cost or the present value of the estimated future net cash flow as the best
estimate.
5.Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
√Applicable □N/A
Fair value at the end of the
Item Valuation techniques
period
Other equity instruments investment-Shanghai Yunfeng Xinchuang
67,932,735.87 Net assets
Equity Investment Centre (上海云锋新创股权投资中心)
Other equity instruments investment-Shanghai JingYi Investment
72,891,151.99 Net assets
Centre (上海经颐投资中心)
Other equity instruments investment-Qianhai Equity Investment Fund
251,543,869.00 Net assets
(前海股权投资基金)
Other equity instruments investment- PANTHEON D ,L.P. 164,827.73 Net assets
Other equity instruments investment-Apricot Forest, Inc (杏树林) 120,788,500.00 Income method
Other equity instruments investment-Zhuhai China Resources Bank
158,400,000.00 Market method
Co., Ltd. (珠海华润银行股份有限公司)
Other equity instruments investment-Yizun Biopharmaceutics
30,513,209.27 Market method
(Shanghai) Co., Ltd. (羿尊生物医药(上海) 有限公司)
Other equity instruments investment-Zhuhai Medpha Biotechnology
32,099,443.70 Recent financing price
Co., Ltd. (珠海麦得发生物科技股份有限公司)
Other equity instruments investment- Xiangrong (Shanghai)
19,613,667.00 Recent financing price
Biotechnology Co., Ltd. (享融（上海）生物科技有限公司)
Other equity instruments investment-GLOBAL HEALTH SCIENCE 246,961,521.36 Net assets
Other equity instruments investment-SCC VENTURE VI 2018-B,L.P. 237,981.63 Net assets
Other equity instruments investment-Nextech V Oncology S.C.S.,
18,034,888.35 Net assets
SICAV-SIF
Other equity instruments investment- Others 32,510,000.00 Cost
6. In case of transfers among levels for the current period, explain the transfer reasons and policies
for determining transfer time point for continuous fair value measurement items
□Applicable √ N/A
7.Changes in valuation techniques for the current period and reasons for changes
□Applicable √ N/A
8.Fair value of financial assets and liabilities not measured at fair value
□Applicable √ N/A
9.Others
□Applicable √ N/A
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Ⅹ. RELATED PARTIES AND RELATED PARTY TRANSACTIONS
1. Information of parent company
√Applicable □N/A
Unit: Yuan Currency: RMB
Shareholding ratio Voting right by
Name of parent Place of Registered
Nature of business by parent parent company
company registration capital
company (%) (%)
Investment and
Shenzhen
establishment of industry,
Baiyeyuan
Shenzhen domestic commerce, and 80,000,000.00 46.43 46.43
Investment Co.,
material supply and
Ltd.
marketing
Notes to the parent company of the Company:
The parent company of the Company is Shenzhen Baiyeyuan Investment Co., Ltd., which was established
on 21 January 1999, and its main business scope is investment and establishment of industry, domestic
commerce, and material supply and marketing.
The ultimate controller of the Company: Zhu Baoguo
Other descriptions:
(1) Registered capital of parent company and its changes
Increase for the Decrease for the
Name of parent company 2022.12.31 2023.06.30
Period Period
Shenzhen Baiyeyuan Investment
80,000,000.00 0.00 0.00 80,000,000.00
Co., Ltd.
(2) Shares of the company held by the parent company and its changes
Decrease
Increase for
Name of parent company 2022.12.31 Ratio for the 2023.06.30 Ratio
the Period
Period
Shenzhen Baiyeyuan
878,272,753.00 45.53% 17,380,900 0.00 895,653,653.00 46.43%
Investment Co., Ltd.
On 21 March 2023, 17,380,900 shares lent by Shenzhen Baiyeyuan Investment Co., Ltd. (深圳市百业源投
资有限公司) for participating in the refinancing securities lending business were returned.
2. Subsidiaries of the Company
Details of subsidiaries refer to Note
√Applicable □N/A
Please refer to notes Ⅶ.1. for the details of subsidiaries.
3. Joint ventures and associates of the Company
For details of the significant joint ventures or associates of the Company, please see the notes.
√Applicable □N/A
Details of significant joint ventures or associates refer to Note Ⅴ. 11 and Note VII. 2.
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Other joint ventures or associates entered into transactions with the Company during the period, or
during the prior period with remaining closing balance were as follows:
√Applicable □N/A
Name of joint ventures and associates Relationship with the Company
Jiaozuo Jinguan Jiahua Electric Power Co., Ltd. Associate
Guangdong Blue Treasure Pharmaceutical Co., Ltd. Associate
Shenzhen City Youbao Technology Co., Ltd. Associate
AbCyte Therapeutics Inc. Associate
L&L Biopharma, Co. Ltd. Associate
Zhuhai Sanmed Biotech Inc. Associate
Aetio Biotherapy Inc Associate
Jiangsu Atom Bioscience and Pharmaceutical Co., Ltd. Associate
Tianjin Tongrentang Group Co., Ltd. Associate
Infinite Intelligence Pharmaceutical Co. Ltd. Associate
Shenzhen Kangti Biomedical Technology Co., Ltd. Associate
Shanghai Sheo Pharmaceutical Technology Co., Ltd. Associate
Zhuhai Sanmed Gene Diagnostics Ltd. Entity controlled by an associate
Zhuhai Hengqin Weisheng Precision Medicine Technology Co., Ltd. Entity controlled by an associate
Other descriptions
□Applicable √ N/A
4. Other related parties of the Company
√Applicable □N/A
Name of other related parties Relationship with the Company
Shenzhen Taitelixing Investment Development Co., Ltd. Others
Zhuozhou Jingnan Yongle Golf Club Co., Ltd. Others
Shenzhen Healthy Deer Information Technology Co., Ltd. Others
Sichuan Healthy Deer Hospital Management Co., Ltd. and its subsidiaries Others
Zhuhai Medpha Biotechnology Co., Ltd. Others
Zhuhai Xianghetai Investment Management Partnership (Limited Partnership) Others
Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) Others
Zhuhai Liying Investment Management Partnership (Limited Partnership) Others
Jiangsu Yiyingjia Medical Technology Co., Ltd. Others
Directors, Supervisors and other senior management personnel Others
5. Related party transactions
(1). Sales and purchase of goods, rendering and receipt of services
Purchase of goods, receipt of services
√Applicable □N/A
Unit: Yuan Currency: RMB
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Whether the
Approved
transaction
transaction
Name of related parties Nature of transaction Current period amount is Prior period
amount (if
exceeded (if
applicable)
applicable)
Guangdong Blue Treasure
Raw materials 1,615,292.04 1,458,973.45
Pharmaceutical Co., Ltd.
Jiangsu Yiyingjia Medical Finished goods,
611,361.00 368,692.00
Technology Co., Ltd. Modern service
Zhuhai Sanmed Biotech Inc. Testing 0.00 53,443.40
Shenzhen Youbao Technology Co.,
Modern service 643,255.00 871,765.00
Ltd.
Beijing Infinite Intelligence
Pharmaceutical Technology Co., R&D 693,069.31 339,805.83
Ltd.
Jiaozuo Jinguan Jiahua Electric
Electricity, steam 127,926,603.34 280,000,000 No 129,081,366.42
Power Co., Ltd.
Sales of goods/rendering of services
√Applicable □N/A
Unit: Yuan Currency: RMB
Name of related parties Nature of transaction Current period Prior period
Guangdong Blue Treasure Finished goods, water and
22,816,768.72 15,282,052.21
Pharmaceutical Co. Ltd. electricity, power
Finished goods, water and
Zhuhai Sanmed Biotech Inc. 232,007.99 194,261.12
electricity, power and others
Zhuhai Sanmed Gene Diagnostics Finished goods, water and
274,234.26 325,180.92
Ltd. electricity, power and others
Subsidiaries of Sichuan Healthy Deer
Finished goods 1,280,329.37 1,987,679.87
Hospital Management Co., Ltd.
Tianjin Tongrentang Group Co.,
Modern service 283,018.87 0.00
Ltd.
Descriptions of related party transactions with respect to the sales and purchase of goods, rendering
and receipt of services
□Applicable √ N/A
(2). Related entrusted management/contracting and entrusting management/outsourcing
Table of the entrusted management/contracting of the Company:
□Applicable √ N/A
Descriptions of related trusteeship/outsourcing
□Applicable √ N/A
Table of the entrusting management/outsourcing of the Company:
□Applicable √ N/A
Descriptions of related management/outsourcing
□Applicable √ N/A
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(3). Related party leases
The Company as a lessor
√Applicable □N/A
Unit: Yuan Currency: RMB
Type of leased Lease income recognized in Lease income recognized in
Name of lessee
assets the current period the previous period
Zhuhai Sanmed Biotech Inc. Buildings 1,113,149.50 1,113,149.50
Zhuhai Sanmed Gene Diagnostics Ltd. Buildings 120,000.00 120,000.00
Shenzhen Baiyeyuan Investment Co., Ltd. Buildings 9,445.88 9,445.88
Shenzhen Taitelixing Investment Development
Buildings 9,360.00 9,360.00
Co., Ltd.
Shenzhen Healthy Deer Information
Buildings 8,587.16 8,587.16
Technology Co., Ltd.
Shenzhen City Youbao Technology Co., Ltd. Buildings 8,587.16 8,587.16
The Company as a lessee:
□Applicable √ N/A
Descriptions of related leases
□Applicable √ N/A
(4). Related party guarantees
The Company as the guarantor
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Name of guaranteed party Guarantee amount Effetive date Expiration date Fullfilled or not
Jinguan Electric Power 4,000.00 2022/7/11 2023/7/11 No
Jinguan Electric Power 3,000.00 2022/7/11 2023/7/11 No
Jinguan Electric Power 2,000.00 2022/7/15 2023/7/15 No
Jinguan Electric Power 3,000.00 2022/8/8 2023/8/8 No
Jinguan Electric Power 3,200.00 2022/9/16 2023/9/16 No
Jinguan Electric Power 3,800.00 2022/10/9 2023/10/9 No
Jinguan Electric Power 3,200.00 2022/10/12 2023/10/12 No
Jinguan Electric Power 2,045.01 2023/6/12 2023/10/13 No
Jinguan Electric Power 3,000.00 2022/11/24 2023/11/24 No
Jinguan Electric Power 2,183.85 2023/6/12 2023/12/12 No
Jinguan Electric Power 2,000.00 2023/6/16 2023/12/12 No
Jinguan Electric Power 4,640.00 2022/12/19 2023/12/16 No
Jinguan Electric Power 2,000.00 2022/12/14 2023/12/14 No
The Company as the guaranteed party
□Applicable √ N/A
Descriptions of guarantees with related parties
√Applicable □N/A
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① In order to ensure the stable development of production and operation of Jinguan Electric Power, the
Company and its controlling subsidiary Jiaozuo Joincare jointly provided a revolving guarantee facility with
balance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specific guarantors shall
be specified in the guarantee contracts) according to “the Resolution on Providing Loan Guarantee for
Jinguan Electric Power by the Company and Its Controlling Subsidiary Jiaozuo Joincare” considered and
approved at the First Extraordinary General Meeting of the Company on 6 July 2016, with the guarantee
period starting from the date when the resolution was considered and approved to 31 December 2019.
Pursuant to “the Resolution on Providing Loan Guarantee for Jinguan Electric Power by the Company and
Its Controlling Subsidiary Jiaozuo Joincare” considered and approved at the 2017 Annual General Meeting
of the Company on 22 May 2018, the Company and its controlling subsidiary Jiaozuo Joincare jointly
provided a revolving guarantee facility with balance of no more than RMB350 million (inclusive) for Jinguan
Electric Power (specific guarantors shall be specified in the guarantee contracts), with the guarantee period
starting from the date when the resolution was considered and approved to 31 December 2022. In order to
ensure the stable development of production and operation of Jinguan Electric Power, the revolving guarantee
facility with balance of no more than RMB350 million (inclusive) for Jinguan Electric Power (specific
guarantors shall be specified in the guarantee contracts) considered and approved at the 2017 General
Meeting of the Company was changed to the revolving guarantee facility with balance of no more than
RMB450 million (inclusive) on 10 May 2019 due to the actual business needs of Jinguan Electric Power,
with the guarantee period starting from the date when the resolution was considered and approved to 31
December 2022. On 18 May 2022, the "Proposal on the Company and its subsidiary Jiaozuo Joincare in
Providing Loan Guarantee for Jinguan Electric Power" was reviewed and approved by the Company's 2021
annual general meeting, the Company and its subsidiary Jiaozuo Joincare jointly provided a guarantee for
Jinguan Electric Power on its revolving loans facility with a balance of not more than RMB 450 million
(including RMB 450 million) (the specific guarantor will be specified in each guarantee contract), and the
term is from the date of approval of this guarantee proposal at the Company’s annual general meeting to 31
December 2025.
As at 30 June 2023, the Company provided Jinguan Electric Power with guarantees for loans of
RMB380.6886 million; of which RMB254.2886 million in Shenzhen Branch of China Everbright Bank,
RMB60 million in Shenzhen Branch of Zheshang Bank, RMB46.40 million in Shenzhen Branch of Nanyang
Commercial Bank and RMB20 million in Jiaozuo Branch of China CITIC Bank.
In order to ensure the safety of secured loans, Jinguan Electric Power provided counter guarantees for the
said guarantees provided by the Company and its subsidiary, Jiaozuo Joincare, based on its owned assets,
and undertook that it would unconditionally provide mutual guarantees for the Company or its controlling
subsidiary designated with total facility of no more than RMB450 million (inclusive) whenever the Company
deemed necessary.
② Another shareholder of Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司) – the Company
has issued a "Counter Guarantee Commitment", promising that it will share the joint and several guarantee
liability to the extent of 33.07% of the scope of guarantee responsibility in relation to the guarantee provided
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
to Livzon MABPharm Inc. (珠海市丽珠单抗生物技术有限公司), and the counter guarantee period will
expire on the date when the Company's guarantee responsibility expiry.
③ Zhuhai Zhong Hui Yuan Investment Partnership (Limited Partnership) (珠海中汇源投资合伙企业(有
限合伙), being another shareholder of Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc. (丽珠
集团新北江制药股份有限公司) has issued a "Counter Guarantee Commitment", promising that it will share
the joint and several guarantee liability to the extent of 8.44% of the scope of guarantee responsibility
incurred by the Company in relation to the guarantee provided to Livzon MABPharm Inc. (珠海市丽珠单
抗生物技术有限公司), and the counter guarantee period will expire on the date when the Company's
guarantee responsibility expiry.
(5). Lending funds of related parties
□Applicable √N/A
(6). Asset transfer and debt restructuring between related parties
□Applicable √N/A
(7). Remuneration of key management personnel
√Applicable □N/A
Unit: 10,000 Yuan Currency: RMB
Item Amount for the current period Amount for the prior period
Remuneration of key management
782.04 799.59
personnel
For the 6-month period ended 30 June 2023
Unit: 10,000 Yuan Currency: RMB
Director/
Wages and Social
Item Supervisor Housing fund Bonus Severance pay Others Total
allowances security
Allowance
Directors:
Zhu Baoguo (朱保国) 162.50 0.00 3.17 1.40 0.00 0.00 0.00 167.07
Liu Guangxia (刘广霞) 162.50 9.65 4.82 1.40 0.00 0.00 0.00 178.37
Yu Xiong (俞雄) 0.00 130.00 0.00 0.00 0.00 0.00 0.00 130.00
Qiu Qingfeng (邱庆丰) 0.00 67.50 3.86 1.40 0.00 0.00 0.00 72.76
Lin Nanqi (林楠棋) 0.00 67.50 3.86 1.40 0.00 0.00 0.00 72.76
Cui Liguo (崔利国) 6.00 0.00 0.00 0.00 0.00 0.00 0.00 6.00
Huo Jing (霍静) 6.00 0.00 0.00 0.00 0.00 0.00 0.00 6.00
Qin Yezhi (覃业志) 6.00 0.00 0.00 0.00 0.00 0.00 0.00 6.00
Peng Juan (彭娟) 6.00 0.00 0.00 0.00 0.00 0.00 0.00 6.00
Supervisors:
Yu Xiaoyun (余孝云) 2.40 19.08 3.54 1.12 0.00 0.00 0.00 26.14
Peng Jinhua (彭金花) 2.40 0.00 0.00 0.00 0.00 0.00 0.00 2.40
Xing zhiwei (幸志伟) 2.40 28.88 3.44 1.05 0.00 0.00 0.00 35.77
Other senior management:
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Director/
Wages and Social
Item Supervisor Housing fund Bonus Severance pay Others Total
allowances security
Allowance
Zhao Fenguang (赵凤光) 0.00 67.50 3.86 1.40 0.00 0.00 0.00 72.76
Total 356.20 390.11 26.56 9.17 0.00 0.00 0.00 782.04
Note: Mr. Zhu Baoguo (朱保国) serves as the chairman of Livzon, a controlled subsidiary of the Company;
and Mr. Yu Xiong (俞雄) and Mr. Qiu Qingfeng (邱庆丰) serve as non-executive directors of Livzon. The
remuneration presented in above does not include the portion paid by Livzon.
For the 6-month period ended 30 June 2021
Unit: 10,000 Yuan Currency: RMB
Director/
Wages and Social
Item Supervisor Housing fund Bonus Severance pay Others Total
allowances security
Allowance
Directors:
Zhu Baoguo (朱保国) 162.50 0.00 3.42 1.25 0.00 0.00 0.00 167.17
Liu Guangxia (刘广霞) 162.50 9.03 4.51 1.25 0.00 0.00 0.00 177.29
Yu Xiong (俞雄) 0.00 130.00 0.00 0.00 0.00 0.00 0.00 133.00
Qiu Qingfeng (邱庆丰) 0.00 67.50 3.60 1.25 0.00 0.00 0.00 72.36
Lin Nanqi (林楠棋) 0.00 67.50 3.60 1.25 0.00 0.00 0.00 72.36
Cui Liguo (崔利国) 5.54 0.00 0.00 0.00 0.00 0.00 0.00 5.54
Huo Jing (霍静) 5.54 0.00 0.00 0.00 0.00 0.00 0.00 5.54
Qin Yezhi (覃业志) 5.54 0.00 0.00 0.00 0.00 0.00 0.00 5.54
Peng Juan (彭娟) 5.54 0.00 0.00 0.00 0.00 0.00 0.00 5.54
Supervisors:
Yu Xiaoyun (余孝云) 2.40 19.23 3.46 1.12 0.00 0.00 0.00 26.21
Peng Jinhua (彭金花) 2.40 0.00 0.00 0.00 0.00 0.00 0.00 2.40
Xing zhiwei (幸志伟) 0.57 32.00 3.36 1.05 0.00 0.00 0.00 36.98
Xie Youguo(谢友国)
1.83 18.46 0.00 0.00 0.00 0.00 0.00 20.29
(resigned)
Other senior management:
Zhao Fenguang (赵凤光) 0.00 67.50 3.60 1.25 0.00 0.00 0.00 72.36
Total 354.37 411.23 25.55 8.44 0.00 0.00 0.00 799.59
Note: Mr. Zhu Baoguo serves as the chairman of Livzon, a controlled subsidiary of the Company; and Mr. Yu
Xiong and Mr. Qiu Qingfeng serve as non-executive directors of Livzon. Xie Youguo has resigned. The
remuneration listed above does not include the part paid by Livzon.
(8). Other related transactions
□Applicable √N/A
6. Receivables and payables with related parties
(1). Receivables from related parties
√Applicable □N/A
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Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Name of related parties Provision for bad Provision for bad
Book balance Book balance
debts debts
Bills Guangdong Blue Treasure
12,738,589.00 0.00 3,893,820.00 0.00
receivables Pharmaceutical Co., Ltd.
Accounts Guangdong Blue Treasure
3,121,800.00 31,218.00 4,781,500.00 47,336.85
receivables Pharmaceutical Co., Ltd.
Accounts Zhuhai Sanmed Gene
83,081.78 830.82 85,731.98 840.17
receivables Diagnostics Ltd.
Subsidiaries of Sichuan Healthy
Accounts
Deer Hospital Management Co., 493,418.30 138,748.58 497,828.30 103,325.48
receivables
Ltd.
Prepayments Zhuhai Sanmed Biotech Inc. 211,200.00 0.00 211,200.00 0.00
Shenzhen Youbao
Prepayments 329,678.00 0.00 188,100.00 0.00
Technology Co., Ltd.
Jiangsu Yiyingjia Medical
Prepayments 670,000.00 0.00 0.00 0.00
Technology Co., Ltd.
Jiaozuo Jinguan Jiahua
Prepayments 67,244,709.78 0.00 75,724,913.57 0.00
Electric Power Co., Ltd.
Other Zhongshan Renhe Health
469,895.78 469,895.78 469,895.78 469,895.78
receivables Products Co., Ltd.
Other Shenzhen Health Deer
0.00 0.00 4,680.00 74.38
receivables Technology Co., Ltd.
Other Guangdong Blue Treasure
1,063,980.76 10,639.81 607,484.29 6,925.32
receivables Pharmaceutical Co., Ltd.
Other Zhuhai Sanmed Gene
18,579.40 123.49 15,795.00 170.59
receivables Diagnostics Ltd.
(2). Payables to related party
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of Balance at the Beginning of
Item Related parties
the Period the Period
Contract Subsidiaries of Sichuan Healthy Deer Hospital
104,277.25 12,011.72
liabilities Management Co., Ltd.
Bills payables Guangdong Blue Treasure Pharmaceutical Co., Ltd. 1,943,040.00 0.00
Accounts
Guangdong Blue Treasure Pharmaceutical Co., Ltd. 0.00 117,760.00
payables
Subsidiaries of Sichuan Healthy Deer Hospital
Other payables 0.00 8,936.17
Management Co., Ltd.
Ⅺ. Share-Based Payment
1. General information about share-based payment
√Applicable □N/A
Unit: Share Currency: RMB
Total equity instruments granted during the Current Period by the Company
Total equity instruments exercised during the Current Period by the Company
Total equity instruments of the Company expired during the Current Period
Range of exercise price of share option of the Company outstanding and
Note 1
remaining term of contract as at the End of the Period
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Range of exercise price of other equity instruments of the Company and
_
remaining term of contract as at the End of the Period
Note 1: Share Option
① On 29 August 2022, the Company held the third extraordinary general meeting of shareholders in 2022,
and reviewed and approved the "Proposal on the Company's 2022 Stock Option Incentive Plan (Draft) and
its Summary", "Proposal on the Company's 2022 Stock Option Incentive Plan Implementation Appraisal
Management Measures" and "Proposal on Requesting the Company's Shareholders' Meeting to Authorize
the Board of Directors to Handle Matters Related to Shares Incentive". The Company held the 16th meeting
of the eighth board of directors on 5 September 2022, and reviewed and passed the "Proposal on First Time
Granting Stock Options to Incentive Participants". With 5 September 2022 as the grant date, 49.45 million
stock options were granted to 423 incentive participants at a price of RMB11.24 per share. The date of
completion and effective date of registration of stock options granted is 16 September 2022.
The exercise period of the options granted this time and the exercise time schedule for each period are shown
in the following table:
Vesting period Vesting date Vesting ratio
From the first trading day 12 months after the first grant date to the last
First vesting period 40%
trading day within 24 months from the first grant date
From the first trading day 24 months after the first grant date to the last
Second vesting period 30%
trading day within 36 months from the first grant date
From the first trading day 36 months after the first grant date to the last
Third vesting period 30%
trading day within 48 months from the first grant date
Company-level performance appraisal requirements: The stock options granted by this incentive plan are
subject to annual performance appraisal and vesting. To achieve the performance appraisal target as the
vesting condition for incentive participants, the annual performance appraisal targets for the first-time grant
are shown in the table below:
Vesting period Performance appraisal targets
Based on the net profit in 2021, the compound growth rate of net profit in 2022 shall not be
First vesting period
less than 15%;
Based on the net profit in 2021, the compound growth rate of net profit in 2023 shall not be
Second vesting period
less than 15%;
Based on the net profit in 2021, the compound growth rate of net profit in 2024 shall not be
Third vesting period
less than 15%.
The calculation of the above "net profit" and "net profit growth rate" indicators is based on the net profit
attributable to shareholders of listed company after deducting non-recurring gains and losses, and excluding
the impact of share-based payments in this incentive plan. If the Company fails to meet the above-mentioned
performance appraisal targets, all incentive participants whose stock options are exercisable in the year
corresponding to the appraisal shall not be exercised and shall be canceled by the Company.
(2) The Company’s subsidiary, Livzon Group
Total amount of equity instruments granted during the year (shares)
Total amount of equity instruments exercised during the year (shares)
Total amount of equity instruments forfeited during the year (shares)
Range of exercise price and residual life of outstanding share options at the end of the year Note 2
Range of exercise price and residual life of outstanding other equity instruments at the end of the year Note 3
Note 2: Share Option
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
① On 14 October 2022, Livzon Group’s 2022 Second Extraordinary Shareholders’ Meeting, 2022 Second
A-Share Class Shareholders’ Meeting and 2022 H-Share Class Shareholders’ Meeting reviewed and
approved the “Proposal on the Company's 2022 Stock Option Incentive Plan (Revised Draft) and Its
Summary", "Proposal on the company's 2022 Stock Option Incentive Plan Implementation Appraisal
Management Measures", "Proposal on submitting to the company's general meeting of shareholders to
authorize the board of directors to handle matters related to the 2022 stock options incentive plan". On 7
November 2022, the 39th meeting of the 10th Board of Directors of Livzon Group reviewed and approved
the "Proposal on Matters Related to the First Time Grant of the 2022 Stock Option Incentive Plan". With 7
November 2022 as the grant date, 17,973,500 stock options were granted to 1,026 incentive participants at a
price of RMB31.31 per A share. The date of completion and effective date of registration of stock options
granted is 23 November 2022.
The exercise period of the options granted this time and the exercise time schedule for each period are shown
in the following table:
Vesting period Vesting date Vesting ratio
First vesting period of From the first trading day 12 months after the completion of the first time
stock options granted grant registration to the last trading day within 24 months from the 40%
for the first time completion of the first time grant registration
Second vesting period From the first trading day 24 months after the completion of the first time
of stock options granted grant registration to the last trading day within 36 months from the 30%
for the first time completion of the first time grant registration
Third vesting period of From the first trading day 36 months after the completion of the first time
stock options granted grant registration to the last trading day within 48 months from the 30%
for the first time completion of the first time grant registration
Livzon Group performance appraisal requirements: The stock options granted by this incentive plan are subject to
annual performance appraisal and vesting during the 3 fiscal years of the vesting period. To achieve the performance
appraisal target as the vesting condition for incentive participants, the annual performance appraisal targets for the
first-time grant are shown in the table below:
Vesting period Performance appraisal targets
First vesting period of stock options Based on the net profit in 2021, the compound growth rate of net profit in 2022
granted for the first time shall not be less than 15%;
Second vesting period of stock options Based on the net profit in 2021, the compound growth rate of net profit in 2023
granted for the first time shall not be less than 15%;
Third vesting period of stock options Based on the net profit in 2021, the compound growth rate of net profit in 2024
granted for the first time shall not be less than 15%.
The calculation of the above "net profit" and "net profit compound growth rate" indicators is based on the net
profit attributable to shareholders of listed company after deducting non-recurring gains and losses, and
excluding the impact of share-based payments in this incentive plan. If the Company fails to meet the above-
mentioned performance appraisal targets, all incentive participants whose stock options are exercisable in the
year corresponding to the appraisal shall not be exercised and shall be canceled by the Company.
Note 3: Other equity incentive
Pursuant to “ the Resolution on the Disposal of Certain Equity of a Holding Subsidiary and Connected
Transaction” considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group
on 8 November 2019, it was agreed that 9.5% equity interests (totally 8,382,100 shares) in Zhuhai Livzon
Diagnostics Inc. (珠海丽珠试剂股份有限公司) held by Livzon Group shall be transferred to Zhuhai Liying
Investment Management Partnership (Limited Partnership) (珠海丽英 投资管理合伙企业（有限合伙）)
at the consideration of RMB21,122,892. Pursuant to the Assets Appraisal Report on the Valuation of the
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Shareholders'. According to “Assets evaluation report of all shareholders' equity value project of Zhuhai
Livzon Diagnostics Inc. (珠海丽珠试剂股份有限公司) involved in the proposed transfer of equity by
Livzon Pharmaceutical Group Co., Ltd.”. (Huaya Zhengxin Appraisal Report [2019] No. A02-0011), the
valuation of all shareholders’ equity of Zhuhai Livzon Diagnostics Inc. as at 30 June 2019 was RMB647.3075
million, and the above equity transfer price was lower than its fair value, therefore it constitutes a share-based
payment. The total share-based payment of the transaction is RMB40.4017 million, which should be
amortized within 5 years according to the partnership agreement and share incentive expenses were
recognised due to the share-based payment as a result of the change in the shareholding of the shareholders
of Zhuhai Liying Investment Management Partnership (Limited Partnership).
Pursuant to “the Resolution on the Implementation of Employee Equity Incentive Scheme by a Holding
Subsidiary” considered and approved at the 34th Meeting of the 9th Session of the Board of Livzon Group
on 8 November 2019, the total number of shares of new issuance by Zhuhai Livzon Diagnostics Inc. for
implementation of employee equity incentive scheme shall not be more than 4,643,839 shares, and the
scheme participants shall contribute a total of RMB11,702,474.28 to directly subscribe for the above shares
or indirectly subscribe for the such shares through the holding of the limited partnership shares of the
employee shareholding platform. In December 2019, pursuant to the Capital Increase Agreement of Zhuhai
Livzon Diagnostics Inc., the total shares of Zhuhai Livzon Diagnostics Inc. increased from 88,232,932 shares
to 92,876,771 shares with par value of RMB1 per share. The increased number of shares were subscribed for
by Zhuhai Haoxun Enterprise Management Consulting Partnership (Limited Partnership) (珠海豪汛企业管
理咨询合伙企业（有限合伙）), Zhuhai Yichen Enterprise Management Consulting Partnership (Limited
Partnership) (珠海熠臣企业管理咨询合伙企业（有限合伙）) and Zhuhai Qijing Enterprise Management
Consulting Partnership (Limited Partnership) (海启靖企业管理咨询合伙企业（有限合伙）) at the
consideration of RMB11,702,474. The subscription price is lower than the fair value, therefore it constitutes
a share-based payment. The total share-based payment of the transaction is RMB20,709,000, which should
be amortized within 5 years according to the Partnership Agreement, and share incentive expenses were
recognized due to the share-based payment as a result of the change in the shares/shareholding of the
shareholders or employee stock ownership platform of Zhuhai Livzon Diagnostics Inc.
On 31 August 2021, the general meeting of Livzon Bio considered and approved the Equity Incentive Scheme
of Zhuhai Livzon Biotechnology Co., Ltd. (珠海市丽珠生物医药科技有限公司), granting 66,666,667
restricted shares of Livzon Biologics to incentive participants, among which 42 million shares were granted
in the first batch and 24,666,667 shares were reserved. Incentive participants indirectly subscribed for the
above shares through the holding of the limited partnership shares of the employee shareholding platform.
The subscription price is lower than the fair value, therefore it constitutes a share-based payment. The total
share-based payment of the transaction is RMB33.6 million, which should be amortized during the lock-up
period according to the Equity Incentive Scheme of LivzonBio and the Grant Agreement and RMB4.76
million was amortized in the 6-month period ended 30 June 2023.
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2. Equity settled share-based payments
√Applicable □N/A
Unit: Yuan Currency: RMB
Method in determining the fair value of equity instruments at the date of grant Black-Scholes Model, market price
Basis for determining quantity of exercisable equity instruments -
Reasons for significant discrepancies between estimate for the Period and
None
Previous Period
Accumulated amount of equity settled share-based payments included in
222,785,534.02
capital reserve
Total expense recognised for equity settled share-based payments for the
50,956,673.92
Period
3. Cash settled share-based payments
□Applicable √N/A
Ⅻ. Commitments and Contingencies
1. Significant commitments
√Applicable □N/A
Significant commitments to outsiders as of the balance sheet data, and their nature and amount
(1) Capital commitments
Capital commitments entered into but not recognized in the
Closing balance Beginning balance
financial statements
Commitments in relation to acquisition of long-term assets 380,762,082.33 455,161,816.72
Commitments in relation to external investment 8,000,000.00 12,000,000.00
Commitments in relation to research and development
206,451,500.00 0.00
expenditures
(2) Other commitments
None.
(3) Performance of previous commitments
The Company has duly performed the capital expenditure commitments and the operating lease
commitments and the other commitments as at 30 June 2023.
2. Contingencies
(1). Significant contingencies as of the balance sheet date
□Applicable √N/A
(2). Please also make explanations thereof if the Company has no significant contingency to be
disclosed:
□Applicable √N/A
3. Others
□Applicable √N/A
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ⅩⅢ. Events after the Balance Sheet Date
1. Significant non-adjustment events
□Applicable √N/A
2. Profit distribution
□Applicable √N/A
3. Sales returns
□Applicable √N/A
4. Descriptions of other events after the balance sheet date
□Applicable √N/A
ⅩⅣ. Other significant events
1、Other significant events
√Applicable □N/A
Leases
The Company had adopted a simplified approach for short-term leases and leases of low value assets and
did not recognized right-of-use assets and lease liabilities. The expense of short-term leases, leases of
low value assets and variable lease payments not included in the measurement of lease liabilities are
included in the expenses in the current period as follows:
Item Amount for the Period
Short-term leases 3,147,259.24
As at 30 June 2023, save as the disclosed above, there were no other significant matters required to be
disclosed by the Company.
ⅩⅤ. Notes to the Key Components of Financial Statements item of the Parent Company
1. Notes receivables
Balance at the End of the Period Balance at the Beginning of the Period
Provision Provision
Category
Book balance for bad Carrying value Book balance for bad Carrying value
debts debts
Bank
acceptance 250,442,507.70 0.00 250,442,507.70 249,617,024.89 0.00 249,617,024.89
bills
Commercial
acceptance 0.00 0.00 0.00 0.00 0.00 0.00
bill
Total 250,442,507.70 0.00 250,442,507.70 249,617,024.89 0.00 249,617,024.89
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（1）Notes receivable pledged at the end of the period
Category Amount pledged at the End of the Period
Bank acceptance bills 165,392,453.42
（2）Notes receivable endorsed or discounted to other parties but not yet expired at balance sheet date
Amount derecognised at the End Amount not derecognised at the End
Category
of the Period of the Period
Bank acceptance bills not yet mature but
49,342,163.84
already endorsed
Bank acceptance bills not yet mature but
0.00
already discounted
Total 49,342,163.84
（3）There were no bills transferred into accounts receivables for non-performance by the issuer at the
End of the Period.
（4）Classification by the method of bad debt provision
Balance at the End of the Period Balance at the Beginning of the Period
Provision for Provision for Provision for
Book balance Book balance
Category bad debts Book balance bad debts bad debts
Percentage Percentage Amount Percentage Percentage Carrying
Amount Amount Amount Amount
(%) (%) (%) (%) value
Provision for bad
debt on an
individual basis
Provision for bad
debt on a 250,442,507.70 100.00 0.00 0.00 250,442,507.70 249,617,024.89 100.00 0.00 0.00 249,617,024.89
collective basis
Including:
Bank
250,442,507.70 100.00 0.00 0.00 250,442,507.70 249,617,024.89 100.00 0.00 0.00 249,617,024.89
acceptance bills
Total 250,442,507.70 100.00 0.00 0.00 250,442,507.70 249,617,024.89 100.00 0.00 0.00 249,617,024.89
（5）Provision for bad debt made, recovered or reversed during the Period
None
（6）There are no bills receivables actually written-off for the Period.
2. Accounts receivables
(1). Disclosure using the aging analysis method
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Within 1 year 243,755,283.87
1-2 years 2,382,422.30
2-3 years 1,149,664.82
3-4 years 71,587.93
4-5 years 171,734.61
Over 5 years 8,115,871.79
Total 255,646,565.32
(2). Classification by the method of bad debt provision
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√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Provision for Provision for
Book balance Book balance
bad debts bad debts
Category Expected Carrying Expected Carrying
Percentage credit value Percentage credit value
Amount Amount Amount Amount
(%) loss (%) loss
rate (%) rate (%)
Provision for
bad debts on
771,300.68 0.30 771,300.68 100.00 0.00 771,300.68 0.25 771,300.68 100.00 0.00
individual
basis
Including:
Receivables
from domestic 771,300.68 0.30 771,300.68 100.00 0.00 771,300.68 0.25 771,300.68 100.00 0.00
customers
Receivables
from overseas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
customers
Provision for
bad debts on 254,875,264.64 99.70 10,573,709.83 4.15 244,301,554.81 302,839,357.89 99.75 11,208,500.15 3.70 291,630,857.74
portfolio basis
Including:
Receivables
from domestic 254,875,264.64 99.70 10,573,709.83 4.15 244,301,554.81 302,839,357.89 99.75 11,208,500.15 3.70 291,630,857.74
customers
Receivables
from overseas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
customers
Total 255,646,565.32 100.00 11,345,010.51 4.44 244,301,554.81 303,610,658.57 100 11,979,800.83 3.95 291,630,857.74
Provision for bad debts on individual item:
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period
Name Provision for bad Expected credit
Book balance Reason for provision made
debts loss rate (%)
Purchase of goods 771,300.68 771,300.68 100.00 Not expected to be recoverable
Total 771,300.68 771,300.68 100.00 /
Statements of provision for bad debt on individual basis:
□Applicable √N/A
Provision for bad debts on portfolio basis:
√Applicable □N/A
Item on portfolio basis: Due from domestic customers
Unit: Yuan Currency: RMB
Balance at the End of the Period
Aging
Accounts receivables Provision for bad debts Provision Ratio(%)
Within 1 year 243,788,178.90 2,612,778.20 1.07
1-2 years (inclusive of 2 years) 2,382,422.30 119,121.12 5.00
2-3 years (inclusive of 3 years) 1,149,664.82 344,899.45 30.00
3-4 years (inclusive of 4 years) 71,587.93 35,793.97 50.00
4-5 years (inclusive of 5 years) 111,468.01 89,174.41 80.00
Over 5 years 7,371,942.68 7,371,942.68 100.00
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Total 254,875,264.64 10,573,709.83 4.15
Standards of provision for bad debts made by portfolio and descriptions thereof:
□Applicable √N/A
If the provision for bad debts is made in accordance with the general model of expected credit losses,
please refer to other receivables disclosure:
□Applicable √N/A
(3). Provision for bad debts
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Changes for the current period Balance at the
Item Beginning of Recovery Other End of the
Provision Removal/write-off
the Period or reversal changes Period
Accounts
11,979,800.83 -634,790.32 0.00 0.00 0.00 11,345,010.51
receivables
Total 11,979,800.83 -634,790.32 0.00 0.00 0.00 11,345,010.51
As at 30 June 2023 and 31 December 2022, the Company had no accounts receivables that are past due but
not impaired.
Significant recovery or reversal of bad debt provision for the current period:
□Applicable √N/A
(4). Accounts receivable actually written off for the current period
□Applicable √N/A
(5). The top five balances of accounts receivable by debtors as at the End of the Period
√Applicable □N/A
As of 30 June 2023, the total amount of the top five debtors in closing balance is RMB39,253,456.12,
accounting for 15.35% of the total amount of closing balance of accounts receivable, and the corresponding
closing balance of provision for bad debts is total RMB392,534.56.
(6). Derecognised accounts receivables in the Company due to the transfer of financial assets.
□Applicable √N/A
(7). Amount of assets or liabilities for which accounts receivable have been transferred but
involvement continues in the Company.
□Applicable √N/A
Other descriptions:
□Applicable √N/A
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3. Other receivables
Line items
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Balance at the End of the Period Balance at the Beginning of the Period
Dividends receivable 926,892,488.80 544,999,500.00
Other receivables 231,021,136.45 240,307,524.78
Total 1,157,913,625.25 785,307,024.78
Other descriptions:
□Applicable √N/A
(1). Dividends receivable
Dividends receivable
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Beginning of the
Item Balance at the End of the Period
Period
Topsino 524,999,500.00 524,999,500.00
Livzon Group 381,892,988.80 0.00
Fenglei Electric Power 20,000,000.00 20,000,000.00
Total 926,892,488.80 544,999,500.00
Other receivables
(2). Disclosure by aging
√Applicable □N/A
Unit: Yuan Currency: RMB
Aging Balance at the End of the Period
Subtotal within 1 year 230,926,374.00
1-2 years 48,152.00
2-3 years 210,597.40
3-4 years 148,186.44
4-5 years 138,912.04
Over 5 years 19,124,794.21
Total 250,597,016.09
(3). Disclosure by nature of the amount
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the Beginning of the
Item Balance at the End of the Period
Period
Other receivables of each company
225,864,474.22 238,041,400.41
within the scope of combination
Treasury bonds and security deposits 17,968,386.04 17,968,386.04
External entities balances 799,416.83 1,384,240.83
Security deposits 822,373.90 973,098.11
Others 5,142,365.10 1,650,063.41
Total 250,597,016.09 260,017,188.80
(4). Provision made for bad debts
√Applicable □N/A
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Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit losses
Expected credit Expected credit losses
Provision for bad debts over the lifetime Total
losses over the over the lifetime (with
(without impairment of
next 12 months impairment of credit)
credit)
Balance at the Beginning
0.00 1,741,277.98 17,968,386.04 19,709,664.02
of the Period
Movement of beginning
balance during the period
-- Transferred to Second
0.00 0.00 0.00 0.00
stage
-- Transferred to third
0.00 0.00 0.00 0.00
stage
-- Reversed to second
0.00 0.00 0.00 0.00
stage
-- Reversed to first stage 0.00 0.00 0.00 0.00
Provisions made for the
0.00 -133,784.38 0.00 -133,784.38
Period
Reversals for the Period 0.00 0.00 0.00 0.00
Write-off for the Period 0.00 0.00 0.00 0.00
Settlement for the Period 0.00 0.00 0.00 0.00
Other changes 0.00 0.00 0.00 0.00
Balance at the End of the
0.00 1,607,493.60 17,968,386.04 19,575,879.64
Period
As at the End of the Period, provision for bad debts in first stage:
Expected credit
Provision for
Category Book balance losses rate over the Carrying value Reason
bad debts
next 12 months (%)
Provision for bad debt on
0.00 0.00 0.00 0.00
individual item
Provision for bad debt on
225,864,474.22 0.00 0.00 225,864,474.22
portfolio basis
Other receivables of each
Expected to be
company within the scope of 225,864,474.22 0.00 0.00 225,864,474.22
recovered
combination
Total 225,864,474.22 0.00 0.00 225,864,474.22
As at the End of the Period, provision for bad debts in second stage:
Expected credit
Provision for bad
Category Book balance losses rate over the Carrying value Reason
debts
lifetime (%)
Provision for bad debt on
individual item
Provision for bad debt on
6,764,155.83 23.76 1,607,493.60 5,156,662.23
portfolio basis
Receivables of security deposits 822,373.90 33.18 272,840.51 549,533.39
Other receivables 5,941,781.93 22.46 1,334,653.09 4,607,128.84
Total 6,764,155.83 23.76 1,607,493.60 5,156,662.23
As at the End of the Period, provision for bad debts in third stage:
Expected credit
Provision for Carrying
Category Book balance losses rate over Reason
bad debts value
the lifetime (%)
Provision for bad debt on
17,968,386.04 100.00 17,968,386.04 0.00
individual item
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Not expected to be
National debt and Margin 17,968,386.04 100.00 17,968,386.04 0.00
recoverable
Provision for bad debt on
0.00 0.00 0.00 0.00
portfolio basis
Total 17,968,386.04 100.00 17,968,386.04 0.00
As at 31 December 2022, provision made for bad debts:
As at 31 December 2022, provision for bad debts in first stage:
Expected credit Provision
Category Book balance losses rate over the for bad Carrying value Reason
next 12 months (%) debts
Provision for bad debt on
0.00 0.00 0.00 0.00
individual item
Provision for bad debt on
238,041,400.41 0.00 0.00 238,041,400.41
portfolio basis
Other receivables of each
Expected to be
company within the scope of 238,041,400.41 0.00 0.00 238,041,400.41
recovered
combination
Total 238,041,400.41 0.00 0.00 238,041,400.41
As at 31 December 2022, provision for bad debts in second stage:
Expected credit
Provision for bad
Category Book balance losses rate over the Carrying value Reason
debts
lifetime (%)
Provision for bad debt on an
0.00 0.00 0.00 0.00
individual basis
Provision for bad debt on a
4,007,402.35 43.45 1,741,277.98 2,266,124.37
collective basis
Receivable deposits and deposits
973,098.11 36.42 354,429.35 618,668.76
and rental fees
Other receivables 3,034,304.24 45.71 1,386,848.63 1,647,455.61
Total 4,007,402.35 43.45 1,741,277.98 2,266,124.37
As at 31 December 2022, provision for bad debts in the third stage:
Expected credit
Provision for bad Carrying
Category Book balance losses rate over the Reason
debts value
lifetime (%)
Provision for bad debt on an
17,968,386.04 100.00 17,968,386.04 0.00
individual basis
Not expected to be
Treasury bonds and Margin 17,968,386.04 100.00 17,968,386.04 0.00
recoverable
Provision for bad debt on a
0.00 0.00 0.00 0.00 --
collective basis
Total 17,968,386.04 100.00 17,968,386.04 0.00
Descriptions of the significant changes in the gross carrying amount of other receivables for which the
changes in loss allowance occur for the current period:
□Applicable √N/A
Provision for bad debts in the current period and the basis for assessing whether the credit risk of
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
financial instruments have increased significantly:
□Applicable √N/A
(5). Actual written-off of other receivables at the End of the Period
□Applicable √N/A
(6) Other receivables due from the top five debtors at the End of the Period
√Applicable □N/A
Unit: Yuan Currency: RMB
Proportion to total
Balance of provision
Balance at the End other receivables at
Name of entity Nature of receivables Ageing for bad debts at the
of the Period the End of the Period
End of the Period
(%)
Shenzhen Fenglei Other receivables of each
Electric Power company within the scope 129,956,104.29 2-3 years 51.86 0.00
Investment Co., Ltd. of combination
Shenzhen Haibin Other receivables of each
Within one
Pharmaceutical Co., company within the scope 21,470,539.48 8.57 0.00
year
Ltd. of combination
Huaxia Securities Co., Treasury bonds and security Over 5 years
deposits 17,968,386.04 7.17 17,968,386.04
Ltd
Joincare Haibin Other receivables of each
Within one
Pharmaceutical Co., company within the scope 17,491,868.69 6.98 0.00
year
Ltd. of combination
Joincare (Guangdong) Other receivables of each Within two
Special Medicine company within the scope 16,757,913.91 6.69 0.00
years
Food Co., Ltd. of combination
Total / 203,644,812.41 / 81.26 17,968,386.04
(7). Other receivables derecognised due to the transfer of financial assets
□Applicable √N/A
(8). Assets and liabilities generated by the transfer of other receivables and continuing
involvement therein
□Applicable √N/A
Other descriptions:
□Applicable √N/A
4.Long-term equity investments
√Applicable □N/A
Unit: Yuan Currency: RMB
Balance at the End of the Period Balance at the Beginning of the Period
Item Provision for Provision for
Book balance Carrying value Book balance Carrying value
impairment impairment
Investments in
3,453,138,312.11 7,010,047.91 3,446,128,264.20 3,453,138,312.11 7,010,047.91 3,446,128,264.20
subsidiaries
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Investments in
associates and 114,283,298.64 0.00 114,283,298.64 78,056,248.43 0.00 78,056,248.43
joint ventures
Total 3,567,421,610.75 7,010,047.91 3,560,411,562.84 3,531,194,560.54 7,010,047.91 3,524,184,512.63
(1). Investments in subsidiaries
√Applicable □N/A
Unit: Yuan Currency: RMB
Provision Balance of
Balance at Increase Decrease Balance at for provision for
Investee the Beginning during the during the the End of impairment impairment
of the Year Period Period the Period for the at the End of
Period the Period
Livzon 608,741,654.08 0.00 0.00 608,741,654.08 0.00 0.00
Haibin Pharma 783,054,186.38 0.00 0.00 783,054,186.38 0.00 0.00
Joincare Daily-
24,116,498.56 0.00 0.00 24,116,498.56 0.00 1,610,047.91
Use
Topsino 813,552,689.31 0.00 0.00 813,552,689.31 0.00 0.00
Taitai Genomics 37,500,000.00 0.00 0.00 37,500,000.00 0.00 0.00
Taitai
105,939,709.72 0.00 0.00 105,939,709.72 0.00 0.00
Pharmaceutical
Shenzhen Hiyeah 170,100,000.00 0.00 0.00 170,100,000.00 0.00 5,400,000.00
Fenglei Electric
100,763,433.06 0.00 0.00 100,763,433.06 0.00 0.00
Power
Jiaozuo Joincare 375,000,000.00 0.00 0.00 375,000,000.00 0.00 0.00
Shanghai
32,500,000.00 0.00 0.00 32,500,000.00 0.00 0.00
Frontier
Taitai Biological 4,832,950.00 0.00 0.00 4,832,950.00 0.00 0.00
Joincare Haibin 100,000,000.00 0.00 0.00 100,000,000.00 0.00 0.00
Joincare Special
3,000,000.00 0.00 0.00 3,000,000.00 0.00 0.00
medicine Food
Livzon
294,037,191.00 0.00 0.00 294,037,191.00 0.00 0.00
Biotechnology
Total 3,453,138,312.11 0.00 0.00 3,453,138,312.11 0.00 7,010,047.91
(2) Investment in associates and joint ventures
√Applicable □N/A
Unit: Yuan Currency: RMB
Change during the Period Balance of
Cash provision
Balance Investment Adjustment
Decre dividend Balance for
at the profit and in other Other Provision
Investee Increased ased or profit at the End of the impairment
Beginning loss under comprehens equity for Others
investmen invest distributi Period at the End
of the Year the equity ive changes Impairment
ment on of the
method income
declared Period
Ⅱ Associates
Ningbo
Ningrong
Biological 27,179,209.51 0.00 0.00 -158,884.43 0.00 0.00 0.00 0.00 0.00 27,020,325.08 0.00
Medicine Co.,
Ltd.
Feellife Health
12,402,324.22 0.00 0.00 786,621.90 0.00 0.00 0.00 0.00 0.00 13,188,946.12 0.00
Inc.
Jiangsu Baining
Yingchuang
Medical 28,732,381.11 0.00 0.00 837,520.76 0.00 0.00 0.00 0.00 0.00 29,569,901.87 0.00
Technology Co.,
Ltd
Shanghai Sheo
Pharmaceutical
9,742,333.59 0.00 0.00 -88,165.30 0.00 0.00 0.00 0.00 0.00 9,654,168.29 0.00
Technology Co.,
Ltd.
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Lijian
(Guangdong)
Animal 0.00 36,750,000.00 0.00 -1,940,032.85 0.00 0.00 0.00 0.00 0.00 34,809,967.15 0.00
Healthcare Co.,
Ltd.
Wuhan Kangli
Health
Investment 0.00 40,000.00 0.00 -9.87 0.00 0.00 0.00 0.00 0.00 39,990.13 0.00
Management
Co., Ltd.
Total 78,056,248.43 36,790,000.00 0.00 -562,949.79 0.00 0.00 0.00 0.00 0.00 114,283,298.64 0.00
5. Operating income and operating cost
(1). Operating income and operating cost
√Applicable □N/A
Unit: Yuan Currency: RMB
For the Period For the Previous Period
Item
Income Cost Income Cost
Principal activities 1,077,437,728.28 554,833,929.81 1,169,331,881.23 785,770,845.75
Other activities 12,095,953.20 7,540,550.84 7,768,255.94 3,116,156.20
Total 1,089,533,681.48 562,374,480.65 1,177,100,137.17 788,887,001.95
Other descriptions:
(2). Descriptions of operating income
①Operating income and operating cost presented by product types
For the Period For the Previous Period
Item
Income Cost Income Cost
Chemical
965,727,948.21 492,012,624.44 1,091,103,688.17 735,913,959.70
pharmaceuticals
Traditional Chinese
31,093,955.39 18,301,781.00 23,819,263.50 13,860,751.57
medicine
Health care products 80,615,824.68 44,519,524.37 54,408,929.55 35,996,134.48
Total 1,077,437,728.28 554,833,929.81 1,169,331,881.23 785,770,845.75
②Operating income and operating cost presented by major operating regions
For the Period For the Previous Period
Item
Income Cost Income Cost
Domestic 1,077,437,728.28 554,833,929.81 1,169,331,881.23 785,770,845.75
Total 1,077,437,728.28 554,833,929.81 1,169,331,881.23 785,770,845.75
③ Operating income and operating cost presented by time of income recognition
For the Period For the Previous Period
Item
Income Cost Income Cost
Commodities (transferred
1,077,437,728.28 554,833,929.81 1,169,331,881.23 785,770,845.75
at a point in time)
Total 1,077,437,728.28 554,833,929.81 1,169,331,881.23 785,770,845.75
(3) Descriptions of other activities
For the Period For the Previous Period
Item
Income Cost Income Cost
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Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
Rental fees 4,513,807.00 583,020.25 5,325,285.20 781,055.72
Others 7,582,146.20 6,957,530.59 2,442,970.74 2,335,100.48
Total 12,095,953.20 7,540,550.84 7,768,255.94 3,116,156.20
6. Investment income
√Applicable □N/A
Unit: Yuan Currency: RMB
Item For the Period For the Previous Period
Long-term equity investments income under cost method 381,892,988.80 310,288,053.40
Long-term equity investments income under equity
-562,949.79 576,377.39
method
Investment income from disposal of long-term equity
0.00 4,242,404.46
investments
Total 381,330,039.01 315,106,835.25
7. Others
□Applicable √N/A
ⅩⅥ Supporting Information
1. Statement of non-recurring profit or loss
√Applicable □N/A
Unit: Yuan Currency: RMB
Item Amount
Gain or loss on disposal of non-current assets -342,359.46
Return, exemption and discharge of taxes resulting from approving ultra vires, or
0.00
without formal approval or incidentally incurred
Government grants as included in the current profit or loss, however, except for
those which are closely related to the normal business of an enterprise, comply
123,344,744.28
with the policies of the State and are continuously entitled with specific amount or
quantity according to certain standards
Funds occupation fees charged from non-financial enterprises 0.00
Gains resulting from the investment cost of the enterprise for the purpose of
acquisition of the subsidiaries, joint operation and joint ventures is lower than the
0.00
fair value of net identifiable assets of the investee as entitled at the time of receipt
of the investment
Profit or loss from exchange of non-monetary assets 0.00
Profit or loss from investment or management of assets by the others 0.00
Provision for impairment of assets accrued due to force majeure factors, such as
0.00
natural disasters
Profit or loss from debts restructuring 0.00
Enterprise restructuring fees, such as the expenses for employees’ settlement and
0.00
the integration fees
Profit or loss exceeding the fair value and generated from the transaction of which
0.00
the transaction price is obviously unfair
Net profit or loss over the current period of the subsidiaries as a result of business
combination under common control from the beginning of the year to the date of 0.00
consolidation
Profit or loss from contingent issues irrelevant to the Company’s normal business 0.00
Except for the efficient hedging related to the Company’s normal business, profit
-45,351,392.03
or loss from changes in fair value as generated from financial assets and financial
264 / 265
Joincare Pharmaceutical Group Industry Co., Ltd. Interim Report 2023
liabilities held for trading and gains from investment as a result of the disposal of
financial assets and financial liabilities held for trading and debt investments
Reversals of provision for impairment of accounts receivable with individual
0.00
impairment test
Profit or loss from entrusted loans 0.00
Gains or losses from changes in the fair values of investment properties
0.00
that are subsequently measured using the fair value model
Impact of a one-time adjustment on current profit and loss according to the
0.00
requirements of tax and accounting laws and regulations
Custody fees of entrusted operation 0.00
Other non-operating income and expenses besides the above items -5,612,578.23
Other items that conform to the definition of non-recurring profit or loss 0.00
Less: Effect of income tax 12,031,185.95
Effect of minority equity(After tax) 26,316,635.89
Total 33,690,592.72
Provide explanations for classifying non-recurring profit and loss items defined in the Explanatory
Announcement No. 1 for Public Company Information Disclosures –Non-recurring Profits and Losses, and
for classifying non-recurring profit and loss items listed in the Explanatory Announcement No. 1 for Public
Company Information Disclosures –Non-recurring Profits and Losses as recurring profit and loss item.
□Applicable √N/A
2. Rate of return on net assets and earnings per share
√Applicable □N/A
Weighted average return on Earnings per share
Profit for the Reporting Period
equity (%) Basic EPS Diluted EPS
Net loss attributable to the Company’s
6.29 0.4264 0.4251
ordinary shareholders
Net profit attributable to the parent
company’s shareholders, excluding non- 6.03 0.4088 0.4075
recurring profit or loss
3. Differences in accounting data under domestic and foreign accounting standards
□Applicable √N/A
4. Others
□Applicable √N/A
Chairman: Zhu Baoguo
Date of Submission Approved by the Board: 23 August 2023
Revised information
□Applicable √N/A
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