华东医药：2020年年度报告(英文版).PDF
The 2020 Annul Report of Huadong Medicine Co., Ltd. 1 Huadong Medicine Co., Ltd. 2020 Annual Report April 2021 The 2020 Annul Report of Huadong Medicine Co., Ltd. 2 To the shareholders In 2020, Huadong Medicine encountered unprecedented challenges, including COVID-19 pandemic impact on the entire manufacturing operation, the unsuccessful GPO participation of Acarbose products, as well as the impact of a series of subsequent policies such as the GPO process and National Drug Reimbursement List (NDRL) price negotiations. Nevertheless, we acknowledged that Huadong overcame these challenges and successfully met its full year operational & business targets. Although the Companys total revenue was slightly delclined year on year while profit growth had been squeezed, the Pharmaceutical Industry business sector maintained its growth, while bucking market trends. Acarbose tablets maintained its market share and continued to increase its share of the ex-hospital and retail markets. This achievement was really a hard-won! Huadong Medicines R&D strategy has always adhered to the corporate philosophy of being “Devoted to science, Dedicated to patients”, with “clinical value, healthcare economical value and commercial value” as key focuses. It has established a pipeline of innovative products in the field of oncology, immunology and endocrinology. Through reconstruction of innovative drug R&D functions, the Companys R&D capability has been significantly strengthened. The IND application in China for an in-licensed ADC product was completed within 100 days and has already obtained CTA approval from CDE. The excellent execution capability of the R&D team has underpinned our confidence in the long term transformation and growth of the Companys innovative drug business. In the TA of diabetes, the Company continues to monitor cutting-edge technologies and innovative product pipeline globally, and The 2020 Annul Report of Huadong Medicine Co., Ltd. 3 will continue enriching its product portfolio. The Company has already participated and invested in a number of domestic and international biotech companies with leading technologies. Through establishing differentiated peptide innovation technology platform, autoimmune disease antibody technology platform, microbial fermentation cytotoxin technology platform and innovative linker technology platform, as well as mutually beneficial collaborations, Huadong Medicine is building and improving its pharmaceutical research and development ecosystem. Huadong commercial distribution business has been adhering to the philosophy of “caring the world with sincerity, integrity, persistence and being pragmatic”, transforming from a basic distributor to an integrated service provider with greater industry expertise. The Companys cold chain business is positioned as the whole life-cycle precision management and control for biological specialty drugs. It has continuously strengthened the competitive advantage of the cold chain capability and driven the high-quality development of digital intelligent supply chain. The Company will vigorously expand e-commerce business, establish a new “online offline interaction” growth model, and actively explore the new healthcare services business of “internet + chronic disease management”. Huadong Medicine has begun expanding in the field of aesthetics when Chinas aesthetics industry is in the ascendant. We have witnessed aesthetics products transitioning from discretionary consumer products to necessities and the industry is about to experience a long term high growth phase. This strengthened our commitment to expand in the field of aesthetics. There are still significant upside in aesthetics over the long term. Going forward, we will continue following the strategy of “global operational positioning, dual-cycle business The 2020 Annul Report of Huadong Medicine Co., Ltd. 4 development”, make China an important market for aesthetics and bring first-in-class, high-end international products to China over time. We will leverage the Companys established aesthetics distribution capabilities in China and the fast growth of the aesthetics industry, to support rapid availability of high quality international product portfolio in China and provide beauty seekers personalised and differentiated aesthetics product portfolios. Thus, a new model of domestic and international dual-cycle joint growth and mutual promotion is formed. 2021 will be another significant year for Huadong Medicines strategic transformation. As GPO policies and price reduction may continue to impact the Companys overall operation, Huadong Medicine will also face the strongest pressure on its business growth in history. Nevertheless, we constantly remind ourselves: dont waste a good crisis. The current situation of Chinas pharmaceutical market represents a rare opportunity for Huadong Medicine to transform into an innovative company and expand globally. Expansion in innovative pharmaceutical business remains firmly as the main theme of Huadong Medicine. Aesthetics, as a core strategic focus of the Companys healthcare business, marks the beginning of the Companys globalization strategy. We are committed to continue strategically positioning across the global pharmaceutical and healthcare value chain, and actively integrate into global pharmaceutical innovation collaborations by strengthening our own innovative drug R&D capabilities and key advantages. This is an era of survival of the fittest and in the end all sands will be removed and only the gold left shinning. From now on to the foreseeable future, the only certainty is that we will The 2020 Annul Report of Huadong Medicine Co., Ltd. 5 continue experiencing various uncertainties caused by infrastructural changes in the industry. Huadong Medicine will remain committed to its course, continue to outperform in the current environment and strategically plan for the future. Thanks to all the investors for your recognition and long term support, which are the source of our commitment and confidence in pursuing the transformation! Huadong Medicine will strive to firmly meet shareholders expectations and continue delivering excellent results. Lv Liang On Behalf Of Huadong Medicine Grain Rain 2021 The 2020 Annul Report of Huadong Medicine Co., Ltd. 6 Section I. Important Declaration, Contents and Definitions The Board of Directors, Board of Supervisors, directors, supervisors and senior management of Huadong Medicine Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the information presented in this annual report is authentic, accurate and complete and free of any false records, misleading statements or material omissions, and shall undertake individual and joint legal liabilities. Lv Liang, the Companys legal representative and the officer in charge of accounting, and Qiu Renbo, head of accounting department (accounting supervisor) hereby declare and guarantee that the financial statements in this annual report are authentic, accurate and complete. All directors have attended the Board of Directors meeting to review this annual report. The future plans, development strategies and other forward-looking statements in this annual report shall not be considered as substantial commitment of the Company to investor. Therefore, investors are kindly reminded to pay attention to possible investment risks. The profit distribution plan reviewed and adopted by this Board of Directors meeting is as follows: on the basis of 1,749,809,548 shares, a cash dividend of 2.3 yuan (tax included) is to be distributed to all shareholders for The 2020 Annul Report of Huadong Medicine Co., Ltd. 7 every 10 shares; no bonus share will be issued; and no capital reserve will be converted to increase the capital stock. According to “Stock Listing Rules of the Shenzhen Stock Exchange”, if listed companies have both Chinese or other language version of public notice, they should ensure the content of both versions are the same. In the case of discrepancy, the original version in Chinese shall prevail. The 2020 Annul Report of Huadong Medicine Co., Ltd. 8 Contents To the shareholders . 2 Section I. Important Declaration, Contents and Definitions . 6 Section II. Company Profile and Key Financial Indicators . 11 Section III. Overview of the Companys Business. 16 Section IV. Discussion and Analysis of Operations. 23 Section V. Important Matters. 75 Section VI. Share Change and Shareholders. 117 Section VIII. Convertible Corporate Bonds . 125 Section VIII. Convertible Corporate Bonds . 126 Section IX. Directors, Supervisors, Senior Managers and Employees . 127 Section X. Corporate Governance . 137 Section XI. Information about Corporate Bonds. 143 Section XII. Financial Report . 144 The 2020 Annul Report of Huadong Medicine Co., Ltd. 9 Definitions Term refers to Definition CSRC refers to China Securities Regulatory Commission SSE refers to Shenzhen Stock Exchange Huadong Medicine/the Company/our Company refers to Huadong Medicine Co., Ltd. CGE refers to China Grand Enterprises, Inc. Huadong Medicine Group refers to Hangzhou Huadong Medicine Group Co., Ltd. Zhongmei Huadong refers to Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. Jiangdong Company refers to Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. Jiuyang Bio refers to Jiangsu Jiuyang Biopharm Co., Ltd. Xian Bohua refers to Huadong Medicine (Xian) Bohua Pharmaceutical Co., Ltd. Jiuyuan Gene refers to Hangzhou Jiuyuan Gene Engineering Co., Ltd. Huadong Ningbo Company refers to Huadong Ningbo Medicine Co., Ltd. Chongqing Peg-Bio refers to Chongqing Peg-Bio Biopharm Co., Ltd. Qyuns Therapeutics refers to Qyuns Therapeutics Co., Ltd. XtalPi refers to XtalPi Inc. Sanyou Bio refers to Sanyou Biopharmaceuticals Co., Ltd. Sinclair refers to Sinclair Pharma Limited vTv 公司 refers to vTv Therapeutics LLC R2 refers to R2 Technologies,Inc. MediBeacon refers to MediBeacon Inc. ImmunoGen refers to ImmunoGen, Inc. Provention Bio refers to Provention Bio, Inc. RAPT refers to RAPT Therapeutics,Inc. Kylane refers to Kylane Laboratoires SA High Tech refers to High Technology Products, S.L.U. LG refers to LG Chem Ltd Jetema refers to Jetema. Co,.ltd Exscientia refers to Exscientia Ltd. GMP refers to Good Manufacturing Practice CGMP refers to Current Good Manufacture Practices GSP refers to Good Supply Practice The 2020 Annul Report of Huadong Medicine Co., Ltd. 10 BE refers to Bioequivalence CDE refers to Center for Drug Evaluation (of National Medical Products Administration) MAH refers to Marketing Authorization Holder FDA refers to (U.S.) Food and Drug Administration NMPA refers to National Medical Products Administration NDA refers to New Drug Application ANDA refers to Abbreviated New Drug Application ICH refers to International Council for Harmonisation (of Technical Requirements for Pharmaceuticals for Human Use) IND refers to Investigational New Drug PK/PD refers to pharmacokinetics/pharmacodynamics CMC refers to Chemistry, Manufacturing and Control CMO refers to Contract Manufacturing Organization CDMO refers to Contract Development and Manufacturing Organization PMA refers to Premarket Application QA refers to Quality Assurance (department) Catalogue of Drugs for Insurance（2020） refers to Catalogue of Drugs for Basic National Medical Insurance/Employment Injury Insurance/Birth Insurance（2020） ADC refers to Antibody-Drug Conjugate EHS refers to Environment、Health、Safety Prescription Drugs refers to Drugs that can only be purchased and used according to prescriptions issued by physicians OTC refers to Over The Counter MRCT refers to International Multi-center Clinical Trial The 2020 Annul Report of Huadong Medicine Co., Ltd. 11 Section II. Company Profile and Key Financial Indicators I. Company information Stock name (abbreviation) Huadong Medicine Stock code 000963 Stock listed on Shenzhen Stock Exchange Company name in Chinese 华东医药股份有限公司 Company name in Chinese (abbreviation) 华东医药 Company name in English (if any) Huadong Medicine Co., Ltd. Company name in English (abbreviation, if any) Huadong Medicine Legal representative Lv Liang Registered address Floor 7, 9 and 10, Gate No. 1, Building No. 1, 468 Yanan Road, Hangzhou Zip code of the registered address 310006 Office address 866 Moganshan Road, Hangzhou Zip code of the office address 310011 Official website Email address II. Contact persons and contact information Secretary of the Board of Directors Securities affairs representative Name Chen Bo / Contact address 866 Moganshan Road, Hangzhou / Tel. 0571-89903300 / Fax 0571-89903300 / III. Channels of disclosure and location of preparation Media selected by the Company for information disclosure China Securities Journal, Securities Times, and Shanghai Securities News Website designated by CSRC for publication of the annual report http:/ Location of preparation of the Companys annual report Office of the Companys Board of Directors The 2020 Annul Report of Huadong Medicine Co., Ltd. 12 IV. Registration changes Organization code 91330000143083157E Changes of the Companys main business since its listing (if any) None Previous changes of controlling shareholder (if any) None IV. Registration changes Organization code 91330000143083157E Changes of the Companys main business since its listing (if any) None Previous changes of controlling shareholder (if any) None VI. Key accounting data and financial indicators Whether the Company needs to perform a retroactive adjustment or restatement of previous accounting data Yes No 2020 2019 Percentage increase/decrease from last year to this year 2018 Operating revenue (yuan) 33,683,058,759.75 35,445,698,216.15 -4.97% 30,663,374,326.27 Net profit attributable to shareholders of listed companies (yuan) 2,819,861,203.63 2,813,118,702.11 0.24% 2,267,229,174.08 Net profit attributable to shareholders of listed companies after deducting non-recurring gains/losses (yuan) 2,429,761,433.56 2,574,437,417.52 -5.62% 2,236,323,500.44 Net cash flow from operating activities (yuan) 3,411,447,747.56 2,001,698,170.67 70.43% 2,039,496,083.26 Basic earnings per share (yuan/share) 1.6115 1.6077 0.24% 1.29 Diluted earnings per share (yuan/share) 1.6115 1.6077 0.24% 1.29 Weighted average return on equity (ROE) 20.95% 25.29% -4.34% 24.87% End of 2020 End of 2019 Percentage increase/decrease from last year to this End of 2018 The 2020 Annul Report of Huadong Medicine Co., Ltd. 13 year Total assets (yuan) 24,201,348,154.75 21,463,974,146.63 12.75% 19,217,357,282.33 Net assets attributable to shareholders of listed companies (yuan) 14,619,821,308.60 12,309,477,308.00 18.77% 9,938,148,996.53 The Companys net profit before or after deducting non-recurring gains and losses, whichever is lower, in the last three fiscal years are all negative, and the audit report of last year shows doubt about the Companys ability to continue as a going concern. Yes No The companys net profit before and after deducti
