First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Stock code: 000963 Stock abbreviation: Huadong Medicine Announcement No.: 2023-028
(相关资料图)
Huadong Medicine Co., Ltd.
First Quarterly Report 2023
The Company and all members of the Board of Directors hereby guarantee that the information
presented in this report is authentic, accurate and complete and free of any false records, misleading
statements or material omissions.
Important Declaration:
Medicine Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the information presented in
this 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.
(accounting supervisor) hereby declare that the financial information in this quarterly report is authentic, accurate
and complete.
□ Yes No
According to “Stock Listing Rules of the Shenzhen Stock Exchange”, if listed companies have both Chinese and
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.
I. Key Financial Data
(I) Key accounting data and financial indicators
Is the Company required to adjust or restate retroactively the accounting data in previous years?
□ Yes No
Increase/decrease for the
reporting period as compared
For the reporting period For the same period last year
with the same period last year
(%)
Operating income (CNY) 10,114,531,331.77 8,932,579,251.75 13.23%
Net profit attributable to
shareholders of the listed 755,284,976.47 704,364,775.13 7.23%
company (CNY)
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Net profit attributable to
shareholders of the listed
company after deducting non-
recurring profit or loss (CNY)
Net cash flow from operating
-246,152,770.16 -260,603,628.32 5.55%
activities (CNY)
Basic earnings per share
(CNY/per share)
Diluted earnings per share
(CNY/share)
Weighted average return on
equity (ROE)
Increase/decrease as at the
As at the end of the reporting end of the reporting period as
As at the end of last year
period compared with the end of last
year (%)
Total assets (CNY) 32,115,200,767.26 31,192,203,406.84 2.96%
Owners" equity attributable to
shareholders of the listed 19,314,073,760.97 18,577,919,237.39 3.96%
company (CNY)
Total share capital of the Company as at the trading date prior to disclosure:
Total share capital of the Company as at the trading date prior
to disclosure (shares)
Fully diluted earnings per share calculated with the latest share capital:
Preferred stock dividends paid (CNY) 0.00
Interest on perpetual bonds paid (CNY) 0.00
Fully diluted earnings per share calculated with the latest share
capital (CNY/share)
(II) Non-recurring profit or loss items and amounts
Applicable □ Not applicable
Unit: CNY
Item For the reporting period Description
Profit or loss from disposal of non-
current assets (including the written-off
-2,020,270.17
portion for which provision for
impairment of assets is made)
Tax returns and exemption with approval
exceeding one"s authority or without 3,225,285.68
formal approval document
Government grants included in current
profit or loss (excluding those closely
related to the normal operations of the
Company granted on an ongoing basis in 11,357,170.62
fixed amount or fixed quota in
accordance with national policies and
regulations)
Other non-operating revenue or
-13,443,089.32
expenditure
Less: Effect on income tax 1,140,865.86
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Effect on minority interests (after
tax)
Total -2,257,641.54
Details of other profit or loss items conforming to the definition of non-recurring profit or loss
□Applicable Not applicable
The Company had no other profit or loss item conforming to the definition of non-recurring profit or loss.
If an item listed as non-recurring profit or loss item in the Explanatory Announcement on Information Disclosure by Companies
Offering Securities to the Public No. 1: Non-Recurring Profits and Losses is defined as a recurring profit or loss item, please describe
the details.
□Applicable Not applicable
The Company did not define any item listed as non-recurring profit or loss item in the Explanatory Announcement on Information
Disclosure by Companies Offering Securities to the Public No. 1: Non-Recurring Profits and Losses as a recurring profit or loss item.
(III) Details and reasons for changes in key accounting data and financial indicators
Applicable □ Not applicable
Items in the balance Amount of
Ending balance Opening balance Reason for change
sheet variation
Mainly due to the loan repayment and
Monetary funds 2,375,152,352.20 3,996,302,178.41 -40.57% investment spending in the current
period
Mainly due to the increase in
Other receivables 426,378,917.15 283,710,955.63 50.29%
receivable temporary payments
Mainly due to the increase in value-
Other current assets 154,239,503.07 52,692,618.78 192.72%
added tax to be deducted
Mainly due to the loan repayment in
Short-term borrowing 563,013,919.12 947,516,383.37 -40.58%
the current period
Mainly due to the increase in the
Notes payable 1,360,474,461.93 1,029,409,686.81 32.16%
settlement of bills
Mainly due to the increase in sales
Contract Liabilities 192,637,694.45 146,488,489.07 31.50%
revenue received in advance
Mainly due to the payment of
Employee remuneration
payable
period
Mainly due to the payment of
Dividends payable 224,219.60 14,924,219.60 -98.50% dividends to minority shareholders in
the current period
Mainly due to the loan repayment in
Long-term borrowings 677,604,268.25 1,051,457,747.44 -35.56%
the current period
Mainly due to the increase in output
Other current liabilities 24,158,784.99 15,788,164.30 53.02%
tax to be transferred
Other comprehensive Mainly due to the translation balance
-119,904,045.95 -88,552,636.42 -35.40%
incomes of foreign currency statements
Items in the income Amount of current Amount of prior Amount of
Reason for change
statement period period variation
Mainly due to the increase in net
Financial expense 29,150,841.84 8,060,234.62 261.66%
interest expenses
Income from disposal of Mainly due to the decrease in income
-2,199,859.71 557,821.07 -494.37%
assets from disposal of fixed assets
Mainly due to the decrease in
Investment incomes -61,752,708.66 -27,961,493.36 -120.85% recognized income from investment
in associates in the current period
Mainly due to the increase in
Other incomes 14,582,456.30 10,669,007.70 36.68% government grant in the current
period as compared with the same
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
period last year
Mainly due to the increase in income
Non-operating incomes 1,389,195.74 831,619.81 67.05%
from waste disposal
Mainly due to the decrease in net
Profits and losses of profit of partly-owned subsidiaries in
minority shareholders the current period as compared with
the same period last year
Items in the cash flow Amount of current Amount of prior Amount of
Reason for change
statement period period variation
Mainly due to the increase in loan
Net cash flows generated repayment in the current period as
-849,412,643.67 -5,561,294.58 -15173.65%
from financing activities compared with the same period last
year
II. Shareholder Information
(I) Total number of ordinary shareholders, number of preferred shareholders with restored voting rights
and shareholdings of top 10 shareholders
Unit: Shares
Total number of ordinary Total number of preferred shareholders with restored
shareholders as at the end of the 72,114 voting rights as at the end of the reporting period (if 0
reporting period any)
Shareholdings of top 10 shareholders
Number of Pledged, marked or locked-up
shares with status
Name of Nature of Shareholding Number of
trading
shareholder shareholder proportion (%) shares held
moratorium Status of shares Quantity
held
Domestic
China Grand non-state-
Enterprises, Inc. owned legal
person
Hangzhou Huadong
State-owned
Medicine Group 16.42% 288,000,000.00 0.00
legal person
Co., Ltd.
Hong Kong
Overseas
Securities Clearing 3.11% 54,522,678.00 0.00
legal person
Company Limited
Industrial and
Commercial Bank
of China Limited–
China EU Medical Others 2.80% 49,178,041.00 0.00
Health Hybrid
Securities
Investment Fund
Domestic
China Securities non-state-
Finance Co., Ltd. owned legal
person
China Construction
Bank Corporation–
Others 1.14% 20,000,078.00 0.00
ICBC Credit Suisse
Frontier Medical
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Securities
Investment Fund
National Social
Security Fund Others 0.59% 10,380,842.00 0.00
Portfolio 110
Industrial and
Commercial Bank
of China Limited–
China EU Medical Others 0.55% 9,577,584.00 0.00
Innovation
Securities
Investment Fund
National Social
Security Fund Others 0.51% 9,000,067.00 0.00
Portfolio 503
China Construction
Bank Corporation–
E Fund CSI300
Others 0.47% 8,306,632.00 0.00
Medicine and
Health Exchange
Traded Fund
Shareholding of top 10 holders of shares without trading moratorium
Type of share
Name of shareholder Number of shares without trading moratorium held
Type of share Quantity
Ordinary share
China Grand Enterprises, Inc. 730,938,157.00 730,938,157.00
in CNY
Hangzhou Huadong Medicine Ordinary share
Group Co., Ltd. in CNY
Hong Kong Securities Clearing Ordinary share
Company Limited in CNY
Industrial and Commercial Bank of
China Limited–China EU Medical Ordinary share
Health Hybrid Securities Investment in CNY
Fund
Ordinary share
China Securities Finance Co., Ltd. 22,186,818.00 22,186,818.00
in CNY
China Construction Bank
Corporation–ICBC Credit Suisse Ordinary share
Frontier Medical Securities in CNY
Investment Fund
National Social Security Fund Ordinary share
Portfolio 110 in CNY
Industrial and Commercial Bank of
China Limited–China EU Medical Ordinary share
Innovation Securities Investment in CNY
Fund
National Social Security Fund Ordinary share
Portfolio 503 in CNY
China Construction Bank
Corporation–E Fund CSI300 Ordinary share
Medicine and Health Exchange in CNY
Traded Fund
The Company did not know whether the shareholders mentioned above
A description of the relationship or concerted action of
were related parties with each other or whether they were acting-in-
the above shareholders
concert parties with each other.
Description of top 10 shareholders engaging in As at the end of the reporting period, none of the top 10 ordinary
securities margin trading business (if any) shareholders held the Company’s shares via a securities margin trading
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
account.
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
(II) Total number of preferred shareholders of the Company and shareholdings of top 10 shareholders
□Applicable Not applicable
III. Other Important Matters
Applicable □ Not applicable
(I) Overview of the Company"s overall operations during the reporting period
In the first quarter of 2023, the Company, with a sharp focus on the overall strategic planning
and annual business objectives, continued to thoroughly implement its unique business philosophy
and the business principles of "High-quality Innovation, High-efficiency Operation" in the new era,
continuously improved the average labor efficiency per capita, enriched the pipeline layout,
strengthened the construction of the R&D ecosystem, improved the R&D speed and quality, and
actively expanded the international market. Moving forward steadily along the road of transformation
and innovation with Huadong Medicine"s characteristics, the Company has achieved an all-round
recovery of overall operating performance and a steady improvement in growth and quality, laying a
solid foundation for achieving the overall business objectives for the year.
From January to March 2023, the Company achieved an operating income of CNY 10.115
billion, the first time that the operating income exceeded CNY 10 billion in a single quarter, an
increase of 13.23% year on year and an increase of 2.62% from the fourth quarter of 2022; during the
reporting period, with the equity incentive cost and the profit or loss from shareholding and
controlling R&D institutions deducted, it achieved the net profit attributable to shareholders of the
listed company after deducting non-recurring profit or loss of CNY 855 million, a year-on-year
increase of 14.99%.
During the reporting period, the overall operation of Zhongmei Huadong, a core subsidiary of
the Company, continued to maintain a steady growth trend, achieving operating income (including
CSO business) of CNY 3.075 billion, a year-on-year increase of 10.19%, and realizing consolidated
net profit attributable to shareholders of the listed company after deducting non-recurring profit or
loss of CNY 667 million, an increase of 15.90% year on year and an increase of 39.98% from the
fourth quarter of 2022.
During the reporting period, except for the orders for nucleoside intermediates affected by the
decline in international market demand, the products and businesses in the Company"s industrial
microbiology sector maintained a steady growth. The Company will continue to improve its business
layout, enhance its overall operating functions and strengthen its marketing capabilities, in an effort
to make new breakthroughs in domestic and international market expansion, and fulfil the business
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
objectives of maintaining rapid growth of operating income for the year of 2023.
Affected by the periodical increase in demand for medicinal products, the growth of the
Company"s pharmaceutical business during the reporting period accelerated year on year; the overall
operating income amounted to CNY 6.844 billion, a year-on-year increase of 15.67%, and the
cumulative net profit increased by 15.06% year on year.
During the reporting period, the Company"s domestic and international aesthetic medicine
business continued to maintain a sound momentum of growth. The total operating income of aesthetic
medicine sector was CNY 503 million (excluding internal offsets), a year-on-year increase of 10.86%.
Sinclair, a wholly-owned subsidiary in the United Kingdom, continued to expand the global aesthetic
medicine market. During the reporting period, it achieved a consolidated operating income of GBP
of GBP 2.99 million (the year-on-year slowdown was mainly due to the delay of orders in some
regions, and the growth rate is expected to pick up gradually from the second quarter).
During the reporting period, Sinclair (Shanghai), a domestic wholly-owned aesthetic medicine
subsidiary of the Company, actively seized the opportunity of gradually recovering domestic aesthetic
medicine market, and continued to expand the regenerative aesthetic medicine market on the premise
of compliance with relevant regulations, based on the concept of "Medicine First", and with patient
experience as the core. It achieved an operating income of CNY 210 million, an increase of 33.83%
year on year and an increase of 10.51% as compared with the fourth quarter of 2022. As the domestic
consumer market continues to recover, the Company is expected to achieve better performance in
domestic aesthetic medicine business in the second quarter.
(II) R&D and BD progress of the Company during the reporting period
The Company attaches great importance to innovative R&D and continues to maintain a high
proportion of R&D investment. During the reporting period, the Company"s R&D investment in
pharmaceutical industry was CNY 387 million, including CNY 306 million in direct R&D
expenditure, and CNY 81 million in product introduction and R&D equity investment. As at the
release date of the report, the important progresses made by the Company in the R&D and BD of
medicinal products, innovative medical devices, aesthetic medicine products were as follows:
(1) Oncology
ELAHERE™ (mirvetuximab soravtansine-gynx, R&D code: IMGN853, HDM2002): In July
completed. In November 2022, ImmunoGen, a US partner of the Company, announced the
accelerated approval of ELAHERE™ by the U.S. FDA. It is the first ADC (antibody-drug conjugate)
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
drug approved by the U.S. FDA for platinum-resistant ovarian cancer. It is used for the treatment of
platinum-resistant epithelial ovarian cancer, fallopian tube cancer, or primary peritoneal cancer in
adults who are folate receptor α (FRα)-positive and have previously received first to third-line
systemic therapy. In December 2022, the subject enrollment for Phase III single-arm clinical trial in
China was completed. In March 2023, the pre-BLA submission was completed after the preset
primary endpoint of study was reached; and the BLA application is planned to be submitted within
this year. Based on the good clinical performance of this product, the Company and its partner will
promote the front-line treatment of ovarian cancer through further clinical study, to support the use
of ELAHERE™ as the first choice in combination therapy for ovarian cancer.
Mefatinib: It is used for the treatment of advanced non-small cell lung cancer with sensitive
EGFR mutations. In June 2021, the enrollment of last subject for Phase III clinical trial was completed;
and the subjects were been followed up for the number of PFS events. It is expected to submit the
NDA application after the number of PFS events in the Phase III study is obtained in the second
quarter of 2023.
(2) Autoimmunity
HDM3002 (PRV-3279): It is used to treat systemic lupus erythematosus (SLE) and prevent or
reduce the immunogenicity of gene therapy. Provention Bio, a US partner of the Company, is
currently conducting Phase IIa clinical trial of the product for SLE indication in the United States and
Hong Kong, China. The Company submitted the IND application in China in February 2023.
HDM3001: It is a biosimilar of ustekinumab for the treatment of moderate to severe plaque
psoriasis in adults. The Phase III clinical study has reached the preset primary endpoint. The Company
completed the pre-BLA submission in April 2023.
(3) Endocrinology and metabolism
HDM1002: It is a small molecule GLP-1 receptor agonist independently developed by the
Company. The Company submitted the IND application in China in February 2023, and completed
the submission of IND application in the United States in April 2023.
Liraglutide Injection: It is a GLP-1 receptor agonist. The marketing authorization application for
diabetes indication was approved by NMPA in March 2023. The marketing authorization application
for obesity or overweight indication was accepted in July 2022 and it is expected to be approved
within this year.
Semaglutide Injection: The Phase I study has been completed and reached the endpoint of the
equivalence study. Phase III clinical study is expected to be initiated in the second half of 2023.
Insulin Degludec Injection: The Phase I study has been completed and reached the endpoint of
the equivalence study. Phase III clinical study is expected to be initiated in the second half of 2023.
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
(4) Innovative medical device
HD-NP-102 (Transdermal Glomerular Filtration Rate Measurement System and MB-102
Injection): It is jointly developed by the Company and MediBeacon, Inc. in the United States, and is
used to continuously measure the glomerular filtration rate (GFR) of patients with normal or impaired
renal function in a non-invasive manner based on the changes in fluorescence over time emitted by
the intravenously injected MB-102. In July 2022, the medical device registration application for the
system was formally accepted by NMPA, which is currently under review. The MB-102 Injection
(Relmapirazin) used in conjunction with the system is a global innovative drug. The subject
enrollment for Phase III multi-regional clinical trial (MRCT) was completed in February 2023, and
the pre-NDA submission in China was completed in April 2023.
(5) Registration and commercialization progress of aesthetic medicine products
During the reporting period, the Company continued to push ahead the registration and
promotion of core products in the global market:
Ellansé® series
The subject enrollment for clinical trial of Ellansé®-M in China has been successfully completed,
and the follow-up has been started. In addition, Sinclair has initiated the registration of Ellansé®
products, a range of injectable polycaprolactone microsphere-based dermal fillers, in the United
States.
MaiLi® series
The subject enrollment for clinical trial of MaiLi Extreme in China has been successfully
completed, and the follow-up has been started. In addition, Sinclair has initiated the registration of
MaiLi® series products, a new range of injectable premium lidocaine-containing hyaluronic acid
fillers, in the United States.
Sculpt ＆ Shape
In the first quarter of 2023, Sinclair launched Sculpt & Shape, a new energy-based device for
body shaping and facial rejuvenation, in the European market. Featuring innovative RotateRF
technology, the product received good market feedback immediately after it was launched.
Reaction®
The Company has initiated the pre-marketing preparations for Reaction®, a bipolar radio
frequency anti-aging device, in China, and has established a national energy-based device sales team.
In April 2023, a pre-marketing clinical application seminar was held in China, when 6 authoritative
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
experts in dermatology and plastic surgery were invited to conduct exchanges and discussions. The
product is planned to be marketed in the second quarter of 2023 in China.
In January 2023, Huadong Medicine (Hangzhou) Co., Ltd., a wholly-owned subsidiary of the
Company, signed an exclusive commercialization cooperation agreement with Kaixing Life Science,
a wholly-owned subsidiary of CARsgen Therapeutics Co., Ltd. Huadong Medicine (Hangzhou) has
been granted by Kaixing Life Science the exclusive rights for commercialization of zevorcabtagene
autoleucel (R&D code: CT053), a fully human anti-autologous BCMA (B cell maturation antigen)
CAR-T (chimeric antigen receptor T cell) candidate for the treatment of relapsed/refractory multiple
myeloma. As a product with great potential, zevorcabtagene autoleucel will further enrich the
Company"s product line in the field of blood diseases. In terms of marketing, it will share expert
networks, research and clinical resources with existing key product varieties in this field, to achieve
mutual promotion and development and generate effective synergies. After this transaction, the
Company will form a multi-dimensional pipeline layout of chemotherapeutic drugs, ADC products
and CAR-T products in the treatment of hematological tumors. For details, please refer to the
Announcement on Exclusive Commercialization Cooperation Agreement Signed by a Wholly-owned
Subsidiary (Announcement No.: 2023-004) disclosed by the Company at http://www.cninfo.com.cn.
In April 2023, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (hereinafter referred to
as "Zhongmei Huadong"), a wholly-owned subsidiary of the Company, signed the Agreement on
Equity Transfer and Capital Increase in Jiangsu Nanjing Nongda Animal Pharmaceutical Co., Ltd.
with Jiangsu Nanjing Nongda Animal Pharmaceutical Co., Ltd. (hereinafter referred to as "Nanjing
Nongda Animal Pharmaceutical"), Zhai Zhongshu and Nanjing Jiuheng Pharmaceutical LP (Limited
Partnership). Zhongmei Huadong will invest no more than CNY 265,333,300 in total and acquire 70%
of the equity in Nanjing Nongda Animal Pharmaceutical in the form of equity transfer and capital
increase, to become a controlling shareholder of the latter. This acquisition of Nanjing Nongda
Animal Pharmaceutical further improves the industrial layout of the Company in industrial
microbiology. Nanjing Nongda Animal Pharmaceutical is at a stage of rapid growth. The average
annual growth rate of sales revenue in the past three years has exceeded 50%.The preliminary
construction has laid a solid foundation for its rapid development. After this transaction, Nanjing
Nongda Animal Pharmaceutical will become an important platform for Huadong Medicine to develop
its animal health business in industrial microbiology sector, while making full use of Huadong
Medicine’s advantages in industrial ecological chain and financial support capabilities to achieve
coordinated development in R&D, manufacturing, marketing, selling and other dimensions. For
details, please refer to the Announcement on Acquisition of 70% Equity in Jiangsu Nanjing Nongda
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Animal Pharmaceutical Co., Ltd. Through Equity Transfer and Capital Increase (Announcement No.:
(III) Reception of research, communication, interview and other activities during the
reporting period
Main contents
Reception Way of Type of of discussion Basic condition index
Reception time Visitor
location reception visitor and materials of investigation
provided
For details, please
refer to the Record of
Huadong Investor Relations
CICC, TF
Medicine & Activities on January
Securities,
CARsgen 17, 2023 published by
January 17, Meeting room Institution, Industrial
Others Therapeutics the Company on the
Commercializati websites of
China
on Project irm.cninfo.com.cn of
Securities, etc.
Exchange Shenzhen Stock
Exchange and
www.cninfo.com.cn.
For details, please
refer to the Record of
Investor Relations
Activities on February
China 15 and 16, 2023
February 15 Meeting room Field Securities, Investor published by the
Institutions
and 16, 2023 of the Company research Zheshang communication Company on the
Securities, etc. websites of
irm.cninfo.com.cn of
Shenzhen Stock
Exchange and
www.cninfo.com.cn.
For details, please
refer to the Record of
Investor Relations
Activities on March 2
Kaiyuan
and 3, 2023 published
March 2 and 3, Meeting room Field Institution, Securities, Investor
by the Company on
the websites of
Securities, etc.
irm.cninfo.com.cn of
Shenzhen Stock
Exchange and
www.cninfo.com.cn.
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
(IV) Innovation progress of the Company
Huadong Medicine"s R&D of innovative drugs are aimed to build excellent innovative drug
discovery capabilities, strong biotechnological R&D capabilities, and efficient clinical development
capabilities to address the unmet clinical needs of global patients. With the continuous enrichment of
product pipeline, the Company has continuously expanded in the field of innovative drugs to cover
the R&D of small molecule drugs, polypeptide drugs, antibody-drug conjugates (ADCs), bispecific
or multi-specific antibody drugs and other types of drugs, while exploring the innovative therapies
for metabolic, autoimmune, neoplastic and other diseases.
(1) Continuous improvement of innovative R&D ecosystem with Huadong Medicine’s
characteristics
The Company has established an international capable and efficient innovative drug R&D team
consisting of various high-level talents from the whole industry chain, and has more than 500 core
technical talents in the innovative drug R&D ecosystem. The enterprises in the ecosystem cooperate
closely with each other to implement the research and development projects smoothly as follows:
biological drugs and the most advanced overall development schedule in the field of autoimmune and
allergic diseases in China. At present, Qyuns Therapeutics" product pipeline covers skin, respiratory,
digestive, and rheumatic diseases, including psoriasis, atopic dermatitis, ankylosing spondylitis,
inflammatory bowel disease, systemic lupus erythematosus and asthma. It has a leading API
production base, including four 2000L disposable bioreactors and a downstream
purification/production line, with an annual production capacity of approximately 300KG therapeutic
antibodies. In March 2023, Qyuns Therapeutics submitted an application for IPO on the Stock
Exchange of Hong Kong Limited. The Phase III study of Project HDM3001 has reached the preset
primary endpoint. The Company completed the pre-BLA submission in April 2023 and is expected
to submit the BLA application in the third quarter of 2023.
development of anticancer ADC drugs. Heidelberg Pharma has a proprietary ATAC ® (Antibody
Targeted Amanitin Conjugates) technology platform and is the first company in the world to develop
amanitin and its derivatives for cancer treatment. At present, clinical progress is made in Project
HDP-101; the IND development is advanced in Project HDP-103; and an early study on a new
generation of ADCs based on the ATAC® platform is undergoing.
fusion proteins, antibody drugs and polypeptide drugs. At present, it has xLONGylation, a
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
recombinant PEGylation (rPEG) platform for long-acting transformation of biological drugs,
MultipleBody, a multi-domain fusion protein technology platform, AccuBody, a precision tumor
treatment technology platform, and HTS-VHHBody, a high-throughput discovery and engineering
platform for domain antibodies. The Project DR30303 in oncology is currently at Phase I clinical trial
in China; the Project DR10624 in Metabolism is currently at Phase I clinical trials in New Zealand,
and the Phase I multiple ascending dose (MAD) phase will be started soon.
recombinant proteins and polypeptide drugs. At present, it has MAS-PEG, a platform that employs a
variety of key technologies to solve major defects such as short half-life and high immunogenicity of
macromolecular drugs in vivo and finally realizes long-acting, low immunogenicity and long-term
macromolecular drugs (therapeutic enzymes), and TE-Peptides, a polypeptide tandem recombination
high-efficiency expression platform that adopts unique patented design, high-density fermentation,
unique enzyme digestion, modification technology and purification technology to obtain products,
and has the advantages of no optical isomers, no missing peptides, short production cycle, high yield
and much lower manufacturing cost. In terms of Semaglutide Injection, the Phase I study has been
completed and reached the endpoint of the equivalence study. It is expected to initiate Phase III
clinical study in the second half of 2023.
The Company will continue to strengthen the construction of Huadong Medicine"s R&D
ecosystem. In the future, it will focus on the layout centering on a new generation of nucleic acid
drugs, drugs used in cell and gene therapy, etc., expand the technology platform of R&D ecosystem,
and continuously enrich the pipeline of differentiated and leading innovative pharmaceutical products.
(2) Enriching the ADC product pipeline and creating a differentiated independent R&D
platform of Huadong Medicine
As at the end of the reporting period, the introduced ADC projects, including HDM2002
(ELAHERE™), HDP-101 and HDP-103, were implemented smoothly, among which HDM2002
(ELAHERE™) is the world’s first ADC being developed by Huadong Medicine and ImmunoGen for
the treatment of folate receptor alpha (FRα)-positive ovarian cancer. In November 2022, ImmunoGen,
a strategic partner of the Company, announced the accelerated approval of ELAHERE™ by the U.S.
FDA. It is the first ADC drug approved by the U.S. FDA for platinum-resistant ovarian cancer. The
Company completed the Pre-BLA submission in China in March 2023, and plans to submit a BLA
application within this year. HDP-101, a BCMA-targeted ADC drug for multiple myeloma, is
introduced from Heidelberg Pharma and is currently at the stage of Phase I/II clinical study overseas;
HDP-103, a PSMA-targeted ADC drug for prostate cancer, is introduced from Heidelberg Pharma
and is at the stage of preclinical study.
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
So far, Huadong Medicine"s innovative R&D ecosystem has formed a system and has begun to
continuously introduce new pipeline projects. The Company established an independent ADC R&D
center last year, which is aimed to gradually build a differentiated independent ADC R&D platform,
strengthen and optimize the ecological chain in the ADC field, develop no less than 10 innovative
ADC products in 2022-2024, and actively promote registered clinical studies. Up to now, 6 preclinical
or exploratory newly-targeted ADC projects have been established independently. It is expected that
at least 4 additional independently-developed products will be confirmed for PCC and 2
independently-developed ADC projects will be approved for IND before 2025. By now, the first
original ADC project has completed PCC confirmation and is undergoing IND development; it is
planned to apply for clinical study within 2024. The Company will continue to enlarge the layout in
the field of anti-tumor ADC drugs, and continue to develop differentiated and iterative ADC products
for different cancer types based on unmet clinical needs.
(3) Pipeline progress
The Company strives to build a world-leading innovative anti-tumor drug R&D platform.
Through the discovery, screening and validation of new targets in the early stage of drug development,
it has established a product pipeline that covers more than 20 innovative anti-tumor drugs, including
targeted small molecule drugs, ADCs, antibodies, and PROTACs, of which 4 clinical projects and 4
IND development projects have clinical competitive advantages in related indications including solid
tumors and hematological tumors. As the Company continues to explore and validate more innovative
targets, more drugs under development will be included in the development pipeline in the future,
which provides an impetus for innovation, drives the continuous development of innovative drugs
with better safety and clinical effect and offers patients more hope for a cure.
With the GLP-1 target as the core, the Company has built a world-leading innovative drug R&D
platform for obesity, diabetes and diabetic complications. By now, the Company has established a
product pipeline of GLP-1 and related targets that combines long-acting and multi-target global
innovative drugs and biosimilars of oral, injectable and other dosage forms, including 4 clinical
projects and 2 IND development projects, some of which have the potential to become a best-in-class
drug. As the in-depth research and development of GLP-1 drugs continues, the range of indications
will be expanded to a greater extend beyond diabetes. Based on the advantages of the existing pipeline,
the Company will continue to explore innovative projects related to GLP-1 targets, expand to include
weight loss, lipid lowering, NASH and other related indications, continue to develop innovative drugs
with higher bioavailability and more clinical value, and offer patients a more convenient medication
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
experience.
Up to now, the Company has had nearly 10 biological drugs and small molecule innovative
products in the field of autoimmune diseases. Among them, for ARCALYST® and Mavrilimumab,
two global innovative products in the field of autoimmunity, introduced from Kiniksa in the United
States, the Company will formally submit the BLA application to NMPA in 2023; and for HDM3001,
a biosimilar of ustekinumab (Stelara®) jointly developed by the Company and Qyuns Therapeutics,
it is expected to submit a BLA application in the third quarter of 2023. Furthermore, the Company"s
global innovative drug R&D center has independently developed a number of early new target and
biological mechanism projects for immune diseases, all of which are progressing smoothly. In the
second half of 2023, it will move from PCC to IND development for one independently-developed
innovative product.
HDM3002 (PRV-3279): It is used to treat systemic lupus erythematosus (SLE) and prevent or
reduce the immunogenicity of gene therapy. Provention Bio, a US partner of the Company, is
currently conducting Phase IIa clinical trial of the product for SLE indication in the United States and
Hong Kong, China. The Company submitted the IND application in China in February 2023.
HDM3001 (QX001S): It is a biosimilar of the original drug ustekinumab (Stelara®,) being jointly
developed by the Company and Qyuns Therapeutics for the treatment of moderate to severe plaque
psoriasis in adults; its Phase III study has reached the preset primary endpoint. The Company
completed the pre-BLA submission in April 2023, and is expected to submit the BLA application in
the third quarter of 2023.
HDM2002 (ELAHERE™): In July 2022, the subject enrollment for the PK pharmacokinetic
study in Phase I clinical trial in China was completed. In November 2022, ImmunoGen, a US partner
of the Company, announced the accelerated approval of ELAHERE™ by the U.S. FDA. It is the first
ADC (antibody-drug conjugate) drug approved by the U.S. FDA for platinum-resistant ovarian cancer.
It is used for the treatment of platinum-resistant epithelial ovarian cancer, fallopian tube cancer, or
primary peritoneal cancer in adults who are folate receptor α (FRα)-positive and have previously
received first to third-line systemic therapy. In December 2022, the subject enrollment for Phase III
single-arm clinical trial in China was completed. In March 2023, the pre-BLA submission was
completed after the preset primary endpoint of study was reached; and the BLA application is planned
to be submitted within this year. Based on the good clinical performance of this product, the Company
and its partner will promote the front-line treatment of ovarian cancer through further clinical study,
to support the use of ELAHERE™ as the first choice in combination therapy for ovarian cancer.
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Mefatinib: It is used for the treatment of advanced non-small cell lung cancer with sensitive
EGFR mutations. In June 2021, the enrollment of last subject for Phase III clinical trial was completed;
and the subjects were been followed up for the number of PFS events. It is expected to submit the
marketing application after the number of PFS events in the Phase III study is obtained in the second
quarter of 2023.
HD-NP-102 (Transdermal Glomerular Filtration Rate Measurement System and MB-102
Injection): It is jointly developed by the Company and MediBeacon, Inc. in the United States, and is
used to continuously measure the glomerular filtration rate (GFR) of patients with normal or impaired
renal function in a non-invasive manner based on the changes in fluorescence over time emitted by
the intravenously injected MB-102. In July 2022, the medical device registration application for the
system was formally accepted by NMPA, which is currently under review. The MB-102 Injection
used in conjunction with the system is a global innovative drug. The subject enrollment for Phase III
multi-regional clinical trial (MRCT) was completed in February 2023, and the pre-NDA submission
in China was completed in April 2023.
(4) Technology platform
Relying on the independent information platform, the Target Validation and Drug Screening
Laboratory has established its own target database to explore targets related to neoplastic,
autoimmune, and metabolic diseases. At early stage, the target biological mechanism team has
established a related technology platform at gene and protein levels, which can be used to discover
new disease targets. The existing platform technologies of the R&D laboratory include: High-
throughput gene expression technology, cDNA overexpression technology, gene knockout
technology; yeast two-hybrid system, proteomics, and other protein-level technologies; transgenic
animal construction technology.
The Company has established a relatively complete pre-clinical evaluation solution for drugs in
treatment of neoplastic, autoimmune, and endocrine and metabolic diseases. The platform has been
able to cover the three dimensions of molecules, cells, and animals, and gradually developed from
traditional screening method to high-throughput screening mode featuring high speed, trace amount
and large scale. The current innovation team has built the full-chain drug R&D and post-marketing
support capabilities ranging from the early drug discovery, PCC confirmation, IND enabling study
and clinical development to drug marketing.
The Company"s CADD/AIDD platform combines industrial research progress, strengthens the
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
computing power and algorithm system construction, and intelligently processes the generated and
accumulated data. Furthermore, the Company has accumulated rich data on the properties of patent
medicines, laying a foundation for the continuous optimization and the iterative property prediction
model of patent medicines, and greatly improving the R&D progress of multiple projects at different
stages. At present, the Company"s CADD/AIDD platform is also extensively applied in the research
and development of polypeptide drugs, ADC drugs, protein drugs and nucleic acid drugs.
PROTAC is a new bifunctional targeted protein degradation technology, which can completely
degrade the targeted protein when compared with traditional small molecules. According to the
technical characteristics and advantages of PROTAC, we conduct differentiated PROTAC target
selection based on un-druggable targets, scaffold protein targets, drug resistance mutations, protein
subtype selectivity and protein complexes, apply artificial intelligence, molecular simulation,
chemistry-proteomics and combinatorial chemistry and other technologies in the R&D of new
PROTAC drugs, combine AIDD/CADD and medicinal chemistry in the structure design of PROTAC
molecules, construct Warhead and E3 ligase ligands with independent patents, and constantly expand
and enrich the independent Linker database, so as to effectively optimize the PROTAC druggability
and the PK characteristics after oral administration. Based on the existing platform technology, the
global innovative drug R&D center has initiated the differentiated R&D for a number of PROTAC
projects, which have shown excellent PK characteristics and efficacy.
(5) Cumulative innovative drug R&D results as at the end of the reporting period
The Company continuously enriches the product pipeline, persistently explores the combination
therapy of drugs, invests corresponding R&D expenses as the R&D projects process, rapidly
promotes the implementation of existing clinical projects and the development of early R&D projects,
and accelerates a number of product pipelines that are characterized by source innovations (first-in-
class, best-in-class) or has differentiated/iterative development value. Since its establishment 3 years
ago, the Global Innovative Drug R&D Center has established more than 40 innovative drug R&D
pipeline projects, obtained 6 independently-developed PCC molecules in terms of innovative drugs,
received approval for 6 IND applications, and submitted 3 pre-NDA /pre-BLA applications.
The Company strengthens the intellectual property protection for key core technologies, and
carries out intellectual property protection and patent layout for core technologies at different levels
and from different aspects. It improves intellectual property risk assessment and early warning
mechanisms, strengthens tracking and monitoring of intellectual property protection in key areas, and
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
improves patent early warning and risk response and prevention capabilities.
The Company builds and continuously improves a comprehensive intellectual property
protection system, integrates intellectual property rights into R&D activities, and safeguards the
development, product value and future market of scientific research projects.
The Global Innovative Drug R&D Center attaches great importance to the protection of
intellectual property rights, focusing on the intellectual property management throughout the life
cycle of drugs and the formulation of patent strategies. The intellectual property BP is set up to be
responsible for the early warning, declaration and maintenance of domestic and foreign patents, so as
to improve the overall competitiveness of products. Since its establishment, the Global Innovative
Drug R&D Center has submitted a total of more than 80 patent applications for inventions, of which
formulation and other aspects.
In the past year, the innovation team published 5 abstracts about research results on new drug
design, drug efficacy evaluation and clinical trials in the field of neoplastic and metabolic diseases at
ASCO, WCLC, EASD and ESMO conferences; among others, the Phase II clinical study on
Mefatinib as first-line treatment of patients with rare EGFR-mutant non-small-cell lung cancer was
published in the form of POSTER at the 2022 ASCO Annual Meeting.
Up to now, the Global Innovative Drug R&D Center has received the approval for a total of 11
government funds, with an approved amount of CNY 27.25 million. In 2021, it was appraised as the
"Leading Innovation Team" in Zhejiang Province. In 2021 and 2022, it was granted the funds under
the "Pioneering Soldier" and "Leading Wild Goose" Projects in Zhejiang Province. Besides, it won
awards in provincial and municipal science and technology projects for HDM1002, TTP273 and other
projects and received funds for Mefatinib under the "Special Project for High-Quality Development
of Biomedical Industry in Hangzhou". Focusing on scientific and technological innovation and
internationalization strategy, the Global Innovative Drug R&D Center continues to promote high-
quality and high-efficiency work style of teams, increases their attractiveness to high-end talents, and
has successfully introduced (recognized) 2 experts from the "115" Foreign (Overseas) Intelligence
Introduction Project in Hangzhou City. The Global Innovative Drug R&D Center continues to
provide support for the establishment and operation of the Huadong Pharmaceutical Innovation and
Development Joint Fund of the Natural Science Foundation of Zhejiang Province.
In the future, the Company, adhering to the concept of "Based on Scientific Research and
Centered on Patients" and with "clinical value, pharmacoeconomic value, and commercial value" as
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
the starting point, will continue to deeply engage in the three core therapeutic areas of oncology,
endocrinology and autoimmunity. Focusing on self-development and external introduction, it will
continue to discover new targets, explore the multi-indication development of existing projects,
continuously increase investment in technology platforms, and strengthen cooperation with domestic
and foreign pharmaceutical and biological companies. The unique R&D ecosystem system and
multiple core R&D platforms of the Company are expected to quickly achieve a number of
blockbuster pipeline products, realize the update and iteration of the Company"s core varieties in near
future, accelerate the marketing of innovative drug products, and provide new momentum for the
medium and long-term development of the Company.
The Company has been deeply engaged in the field of industrial microbiology for more than 40
years, successfully developed and produced a variety of microbial drugs, and built a key technology
system for the development and production of microbial products. The scale and technical level of
the existing major microbial fermentation products are in the leading position in the industry, with a
solid industrial foundation.
The Company"s industrial microbiology business is guided by market demand, driven by R&D
technology, and coordinated with industrial resources. It focuses on the two business scenarios, i.e.,
the systematic application of synthetic biology technologies and the biomedical innovation and
development, and has established differentiated product pipelines and business solutions in the fields
of raw materials for innovative drugs, such as nucleic acid & ADC, pharmaceutical APIs &
intermediates, and raw materials for comprehensive health & aesthetic medicine.
(1) Building R&D industrial clusters to enhance international competitiveness in an all-
round way
The Company has established the Industrial Microbiology Division to lead the overall business
development in the field of industrial microbiology, and has formed a complete independent
management system in the links of operation, research and development, investment, human
resources and marketing. Under the business division, a R&D cluster centered on Zhongmei Huadong
Industrial Microbiology Research and Development, Huadong Institute of Technology in Synthetic
Biology, Huida Biotech and Hizyme Biotech has been established, as well as Hangzhou Xiangfuqiao,
Qiantang New Area, Jiangsu Joyang, Hubei Maiggic, Anhui Meihua and Wuhu Huaren
industrialization bases.
There are up to more than 130 R&D projects in the field of industrial microbiology, mainly
including 17 projects about raw materials for innovative drugs such as nucleic acid and ADC
(including 71 sub-projects), 30 about pharmaceutical APIs and intermediates, 18 projects about raw
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
materials for comprehensive health and aesthetic medicine, animal health care, biological materials
and others. As at the end of March 2023, the Company had 78 authorized patents and 51 pending
patents in this field.
The industrial microbiology team has both experience and vitality. Mr. Wu Hui, Deputy General
Manager, is the main person in charge of the Company"s industrial microbiology business and a
business leader with a deep technical foundation. He has more than 30 years of experience in the field
of industrial microbiology and has won the second prize of the National Prize for Progress in Science
and Technology twice. Mr. Zheng Linghui, Chief Scientist of the Industrial Microbiology Division,
is a well-known expert in microbial drug technology in China, responsible for or participating in a
number of major national science and technology projects and major new drug discovery projects. In
terms of research and development, the Industrial Microbiology Division is committed to forming an
efficient R&D team with high-quality talents as the core. At present, there are 335 research and
development personnel, of which 23% are masters and doctorates.
The Industrial Microbiology Division has established an international marketing team of nearly
Division and the market management system + the professional sales teams of subsidiaries, and has
further established overseas localized marketing teams to enhance overseas customer service
capabilities. In the future, the Industrial Microbiology Division will further seek to increase the
proportion of international business, and take R&D, quality, service and regulatory registration as the
main dimensions of competitiveness to form the competitive advantages of international business.
(2) Making arrangements for synthetic biology in detail to build a leading edge in
industrial technology
On the basis of systems biology, synthetic biology integrates the principles of engineering
science, and reprograms natural or designs and synthesizes new biological systems using the bottom-
up strategy to reveal the laws of life and establish a “convergent” emerging discipline for the new
generation of bioengineering system, and it is an important technological path to promote the great
leap from "knowing life" to "designing life". With the core idea of “creation for infinite knowledge
and creation for practical use", synthetic biology technology and its application have led the third
biotechnology revolution, building a broad application prospect in the fields of medicine and health,
materials, and chemicals.
Being engaged in the field of synthetic biology, Huadong Medicine, on the one hand, has made
embedded research and development achievements in the fields of macromolecular drugs and
microbial drugs, providing effective technical support for existing related businesses. On the other
hand, it is also focusing on the development of new ongoing business, and seeking industrial
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
innovation breakthroughs on the basis of synthetic biology technology and in combination with the
accumulated achievements in the industrial microbiology. With the development tasks of the
Company in the field of synthetic biology research and development and application undertaken by
the Industrial Microbiology Division, a leading systematic layout on the tool side, platform side and
product side of synthetic biology has been formed in China.
On the tool side, with the businesses undertaken by Huaren Science and Technology and Meihua
Hi-Tech, and nucleoside monomers and phosphorylated nucleosides serving as the main R&D and
commercial product pipelines, the Industrial Microbiology Division serves the gene synthesis and
sequencing companies at home and abroad, making industrial microbiology the most upstream
industry in the field of synthetic biology.
On the platform side, the basic research and development capabilities in synthetic biology
including genetic element design, chassis cell construction and expression, and metabolic engineering
research have been built since the establishment of Huadong Institute of Technology in Synthetic
Biology led by Academician Zheng Yuguo. With the pilot experiment, research and development and
industrial development carried out by Huida Biotech affiliated to the Industrial Microbiology
Division of the Company and the CMC technical platform of the Company, industrial development
of products has been realized by virtue of systems microbial engineering development capabilities
including bacteria fermentation, separation and purification established over the past 40 years. The
Industrial Microbiology Division has set up a complete development system of enzyme design -
evolution - bacteria construction - expression - catalysis, application and research and a technical
platform for development of biocatalytic enzymes with the synthetic biology technology through the
incorporation of Hizyme Biotech. Through the aforesaid platforms, it has also established a complete
technology research and development system ranging from basic research and development to
industrial development in the field of synthetic biology.
On the product side, the Industrial Microbiology Division has transformed synthetic biology
technology products in the fields of comprehensive health and aesthetic medicine through Magic
Health, forming relatively leading technical advantages in vitamin K2, ectoin, methoxatin and other
products. For example, it has transformed vitamin K2 producing bacteria using the synthetic biology
technology, which has solved the key technical problems of complex metabolism and low product
expression rate of natural bacteria. In addition, through such bases as Jiangdong and Jiangsu Jiuyang
Bio-pharmaceutical Co., Ltd., it has transformed the achievements in synthetic biology technology
related to pharmaceutical APIs and intermediates, and has developed a relatively leading technology
level and product pipeline in terms of anti-infective APIs for external use represented by mupirocin
and Immunosuppressive APIs represented by tacrolimus. Based on the layout of more than 60 product
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
pipelines related to synthetic biology technology, it will further expand the application and
development in the above product fields, as well as in the fields of medical biomaterials and raw
materials for pet health in the future.
(3) Focusing on research, development and industrialization to facilitate the source
innovation of biomedicine
In recent years, approval of nucleic acid drugs for marketing has been speeded up, and clinical
data of a number of nucleic acid drugs that have the potential to become blockbuster drugs have been
released, covering the fields of heart and metabolic diseases, liver diseases, and a variety of rare
diseases, for which breakthroughs in key technologies of nucleic acid drugs have played an important
role, including chemical modification and delivery system. Now, 13 nucleic acid drugs have been
approved in the world, and the nucleic acid drugs mainly represented by small nucleic acid drugs and
mRNA drugs may become a new development direction after antibody protein drugs. The Industrial
Microbiology Division realizes mergers and acquisitions through Huaren Science and Technology,
and serves the small nucleic acid drug and in vitro diagnostic reagent industries with modified and
protected nucleosides and nucleoside monomers. Based on the service and tracking of nearly a
thousand industry and scientific research customers, it continuously improves product quality and
develops new product pipelines with the development of such customers. The introduction of
industrial microbiology research and development strength and technical talents further promotes the
establishment of a richer and more complex nucleoside product system and a "moat" for the product
pipeline and quality system, which will make it effective to embrace the rapid development in the
field of small nucleic acid drugs.
In January 2023, the Industrial Microbiology Division set up Hangzhou Huixin Biotechnology
Co., Ltd. Huixin Biotechnology is mainly engaged in the development and production of chemical
raw materials (e.g., modified nucleoside triphosphates, nucleotides, and cap structures) and biological
raw materials (e.g., tool enzymes, and plasmids) required for manufacture of mRNA drugs, and also
undertakes CRO/CDMO service business in the mRNA field. The establishment of Huixin
Biotechnology and the introduction of the corresponding mRNA technology team will further
integrate the research and development and industrialization strength of the Industrial Microbiology
Division in the fields of upstream raw materials and services for mRNA drugs, and realize the mRNA
drug raw material and service business layout of the Industrial Microbiology Division.
Antibody-drug conjugates (ADCs) are compounds formed by linking antibodies and small-
molecule cytotoxic drugs through specific linkers, and their main ingredients include antibodies,
linkers, and small-molecule cytotoxic drugs. By the end of 2022, 15 different ADCs had been
approved by FDA. As of August 2022, 587 new ADCs had been at the research and development
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
stage all over the world, and the clinical trial stage had been started for 281 of them. Since significant
technical improvements have been made through selection of better cytotoxic drugs, bio-conjugation
methods, better targeted antigens and optimized antibody engineering, ADCs have become an
important track for innovative drugs. In the field of ADCs, Huida Biotech affiliated to the Industrial
Microbiology Division has completed the commercial development of the existing major ADC
cytotoxins and has submitted the DMFs for Exatecan and DM1 for registration in the US, and it plans
to submit the DMF for MMAE for registration in the US, making it stand at the forefront in the field
of ADC cytotoxins in China. Huida Biotech further expands the development of new toxins and
Linker using synthetic biology technology and chemical modification technology, and also expands
the production of small molecules of ADCs (toxin-Linker) downstream. In the future, a pattern of
parallel progress in the development and production of toxins and the production of small molecules
of ADCs will be formed.
The Industrial Microbiology Division will also explore business opportunities in other
biomedical innovation fields because biomedical innovation is an eternal theme and an inexhaustible
business source for the Industrial Microbiology Division. Based on the differentiation and the
development in the specific fields of nucleic acid and ADCs, the Industrial Microbiology Division
will form a "specialized and charming" business layout in the upstream field of biomedical innovation.
(4) Expanding the new field of animal health to gradually improve the industrial strategic
layout
With animal health as one of the five major directions of the strategic layout of the Industrial
Microbiology Division, the Company is gradually improving the industrial layout in accordance with
the established strategic deployment. In April 2023, the Company acquired Jiangsu Nanjing Nongda
Animal Pharmaceutical Co., Ltd. (hereinafter referred to as "Nanjing Nongda Animal
Pharmaceutical"), and quickly entered the sub-track of pet and aquatic animal health. Started late in
China, the pet and aquatic animal health industry is featured by a low degree of concentration, a
shortage of varieties, and a large unmet demand space. Currently, the products of international animal
health giants account for more than 80% of the market share, which means that substitution with
domestic products is speeding up and that the market penetration of the products of domestic
enterprises is expected to gradually increase. In recent years, the Ministry of Agriculture has
successively unveiled policies on drugs for pets and aquatic animals to improve industry standards
and encourage industry development, providing a good opportunity for rapid industry development.
Being optimistic about the development of the animal health industry for a long time, the Company
has reserved more than 10 kinds of high-end APIs for pet health, and has applied and developed a
variety of raw materials required for comprehensive health in the field of animal health, and it has a
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
potential opportunity to transform more than 10 human medicines into pet medicines to realize the
integrated development of raw materials and preparations in the future. Nanjing Nongda Animal
Pharmaceutical will become an important platform for Huadong Medicine to develop its animal
health business in the industrial microbiology sector, while making full use of Huadong Medicine’s
advantages in industrial ecological chain and financial support capabilities to achieve coordinated
development in R&D, manufacturing, marketing, selling and other dimensions. In the next five years,
it will develop and launch dozens of animal health products one after another to meet more market
demands in the field of pet and aquatic animal health, and become an animal health benchmark
enterprise in China.
Now, on the basis of synthetic biology, industrial fermentation, green chemical manufacturing
and other technologies and in combination with the existing research and development foundation
and industrial layout, the organizational structure and layout of "industrial microbiology division +
innovative technology company + industrial manufacturing base" have been formed, and the overall
layout in the fields of raw materials for innovative drugs such as nucleic acid & ADCs, APIs &
intermediates, and raw materials for comprehensive health & aesthetic medicine has been completed
in the industrial microbiology sector of the Company. Meanwhile, active efforts are made to expand
the fields of animal health and biological materials to gradually improve the industrial strategic layout.
By 2030, the Company will set up an "industrial, large-scale, and international" industry cluster and
become the industry leader in the field of industrial microbiology in China.
Adhering to the core concept of “focusing on beauty seekers", the Company, based on the
comprehensive and differentiated product matrix, integrates “non-invasive technology + minimally
invasive technology", “face + body", “product + technology", “injection + energy-based device" and
other diversified combination therapies to provide more professional, safer, more efficient and more
comprehensive solutions for beauty seekers, and it is committed to becoming the world"s leading
provider of comprehensive solutions in the field of aesthetic medicine. It always attaches great
importance to the scientific and technological innovation in the field of aesthetic medicine, and
always practices the operation philosophy of "high-tech research and development, high-quality
positioning, and product globalization". With technology and leadership as the strategic focuses, it
continuously increases investment in innovative technology, promotes breakthroughs and upgrades
in the aesthetic medicine technologies, and enriches the innovative product pipelines. It has obtained
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
more than 200 patents related to aesthetic medicine business worldwide.
(1) Expand the global layout and build an international leading aesthetic medicine
platform
The aesthetic medicine business focuses on the global high-end aesthetic medicine market.
Sinclair, a wholly-owned subsidiary, is a global aesthetic medicine operation platform of the
Company, and headquartered in the UK, it promotes and sells long-acting microspheres for injection,
hyaluronic acid, and facial lifting and thread-embedding products in the global market. Huadong
Medicine also develops and expands the business of energy-based devices in the field of aesthetic
medicine in the global market through High Tech and Viora, its wholly-owned subsidiaries. Viora"s
good brand reputation, perfect market service personnel, complete marketing management system
and extensive market resources accumulated in the American market will make it effective for
Sinclair to further expand its EBD business in the American market. Through further integration of
research and development resources and capabilities, the aesthetic medicine business is advantaged
by six global research and development centers in the UK, Netherlands, France, Switzerland, Spain
and Israel, and six global production bases in the Netherlands, France, US, Switzerland, Bulgaria and
Israel. Sinclair (Shanghai), a wholly-owned subsidiary and a Chinese market operation platform, and
R2 in the US and Kylane in Switzerland, the overseas technology research and development
subsidiaries, are also included in the aesthetic medicine sector of the Company.
(2) Focus on high-end technology and arrange differentiated product matrix
The aesthetic medicine projects can be divided into surgical treatment projects and non-surgical
treatment projects. The surgical treatment projects are intended to improve appearances through
surgical treatments, mainly including the plastic surgery. The non-surgical treatment projects mainly
include the injection therapies, energy-based therapies and other non-surgical treatments. The non-
surgical treatment projects are highly recognized by consumers because of their high safety, short
recovery time, and easy operation. According to the Research Report on Aesthetic Medicine Industry
in China 2022, the market of non-surgical treatment projects, i.e., "light aesthetic medicine" projects,
is expanding rapidly, with a market size of up to 75.2 billion yuan in 2021 and the CAGR expected
to be 31.9% from 2021 to 2025, and it is expected to become the main market in the field of aesthetic
medicine. Focusing on non-surgical treatment projects, the Company has 36 high-end products that
are already on the market and under research in the field of aesthetic medicine featured by “non-
invasive technology + minimally invasive technology", including 13 products for injection, 22
energy-based devices, and 1 thread embedding product. The product portfolio covers the mainstream
field of aesthetic medicine characterized by non-surgical treatment projects such as facial and body
filling, face cleansing, thread embedding, skin management, body shaping, hair removal and private
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
restoration, forming a comprehensive product cluster, with the number of products and covered fields
ranking in the forefront of the industry.
In recent years, with the rise of the "beauty economy", the injection projects have witnessed
rapid development, and the aesthetic medicine industry in China has been dominated by injection
projects. The products for injection are the core driving force for the rapid growth of the revenue of
the aesthetic medicine business, mainly including the followings:
As a high-end filler made of polycaprolactone (PCL) microspheres and carboxymethylcellulose
(CMC), Ellansé® can be naturally metabolized in the body, and with good biocompatibility due to
exclusive STAT patented technology, it has an immediate shaping effect and a long-lasting collagen
regeneration mechanism. Now, Ellansé® has been registered and certified or approved for marketing
in more than 60 countries or regions around the world. With a history of clinical use for more than
Ellansé®-S has been widely recognized since it was officially launched in China in August 2021,
leading the regenerative aesthetic medicine market. In the first quarter of 2023, all subjects for clinical
trial of Ellansé®-M in China were enrolled successfully, and follow-up was started. During the
reporting period, Sinclair started the registration of Ellansé® in the US market.
Made of poly-l-lactic acid (PLLA), Lanluma® is a regenerative filler for face and body, and it is
currently the only regenerative product approved for buttock and thigh filling in the world to provide
a long-lasting filling effect for 18-24 months.
Granted the EU CE certification in 2020, Lanluma® has been approved for marketing in 32
countries and regions around the world so far. It was approved for launch in Boao Lecheng, Hainan
in December 2022, and granted the "Best Body Filling Injection" award by the AMWC Monaco 2023,
which shows the authoritative recognition of Lanluma® and its technology by the international
aesthetic medicine industry.
There are four products in MaiLi® series, all of which adopt the innovative OxiFree™ patented
technology, and these products can make facial expressions more natural because of the Smart Spring
property. Compared with similar products in the industry, these products are advantaged by excellent
rheological property and good filling property, which can help to effectively reduce the injection
volume, maximize the clinical efficacy, and obtain more durable and natural effect. Granted EU CE
certification in June 2020, MaiLi® series have been continuously recognized by the market since their
overseas launch. Currently, all subjects for clinical trial of MaiLi Extreme in China have been enrolled,
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
and follow-up is in progress. During the reporting period, Sinclair started the registration of MaiLi ®
in the US market.
KiOmedine® skin booster and 3 fillers are products under research developed by KiOmed.
KiOmedine® skin booster is a high-purity natural (not animal derived) medical grade chitosan
derivative developed using the exclusive patented technology, and its core ingredients can protect the
skin from oxidative stress, effectively supplement skin moisture, and improve skin quality. As fillers
for injection based on KiOmedine® and hyaluronic acid, the 3 KiOmedine® fillers can be used for lip
filling and shaping, improving or correcting facial wrinkles and skin depressions, and facial filling
and shaping.
The aesthetic medicine projects based on energy-based device are very popular among beauty
seekers because of their safety and high efficiency, and the penetration of energy-based device
continues to increase. According to data from iResearch, the non-invasive energy-based device
market size reached 2.2 billion yuan in 2021, and the compound growth rate from 2016 to 2021
reached 15.6% in China. The Company has abundant product pipelines in the field of energy-based
device, and the core products include the followings:
Glacial Spa® is a high-tech beauty instrument which is researched and developed by the technical
team with Rox Anderson, M.D., the father of modern laser medicine and director of Wellman Center
for Photomedicine at Massachusetts General Hospital (a teaching hospital affiliated to Harvard
Medical School, located in Boston) as the core member, and it is a scientific and technological
achievement of a new generation in the field of cool skin care. Glacial Spa® achieves effective
management of melanin expression through precise temperature control of semiconductors. The
global debut of the product was successfully completed in China in the first quarter of 2022, and now
commercial cooperation with more than 40 beauty institutions in China has been launched.
Provided with the CORE™ multi-channel RF technology, four adjustment modes for adjustment
of RF energy, and the Vacuum negative pressure technology, Reaction® dual-stage RF instrument
can better activate and heat autologous cells in the dermis and subcutaneous tissue to promote
collagen regeneration and effectively tighten the skin and smooth the wrinkles. Registered with and
certified by FDA, Reaction® has been on the market overseas for many years. In 2015, it was granted
the third class medical device registration certificate by the NMPA. At present, the agent in China
has been changed, and re-sales and promotions in China are going to be started in the second quarter
of 2023.
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
The V series integrates all high-end application technologies of the Company (CORE, SVC,
PCR, and Multi-CORE), and constitutes a multifunctional aesthetic medicine operation platform
integrating such energy sources as radio frequency (RF), intense pulsed light (IPL), and Laser. Now,
it is a leader in the medical laser, photon and energy-based device markets in Europe and America.
At present, V10, V20, and V30 have been registered with and certified by FDA and granted EU CE
certification.
Adopting the IoT (Internet of Things) technology, Préime DermaFacial is a multi-functional,
intelligent and high-tech skin management platform integrating five advanced technologies including
spiral vacuum, microdermabrasion, micro-current, radio frequency and ultrasound, and it can be used
for face cleansing, exfoliating, and moisturizing to create a smooth and firm skin state for beauty
seekers. The product was commercially available in major global aesthetic medicine markets such as
in Europe and America in September 2022, and scheduled to be launched in China in 2023.
As an energy-based device adopting the innovative RotateRF technology, Sculpt&Shape® has 6
different rotating probes and integrates unipolar and bipolar radiofrequency, and it is used for body
shaping, skin tightening, fat reduction, wrinkle reduction, and other facial rejuvenation treatments.
The product was launched in the European market in the first quarter of 2023.
(3) Improve marketing capabilities to facilitate the commercial development of aesthetic
medicine business
The aesthetic medicine business of the Company is provided with a professional marketing team
of nearly 300 people. Moreover, a global aesthetic medicine marketing network has been established.
At present, product distribution has covered more than 80 countries and regions around the world.
Sinclair, a wholly-owned subsidiary in the UK, is a global aesthetic medicine operation platform
of the Company. It has direct sales teams in the EU, Brazil, Mexico, Colombia, the UAE, Hong Kong
SAR and South Korea, as well as an international distribution network. During the reporting period,
the Company continued to provide the doctors in the field of aesthetic medicine with technologies,
and it was committed to providing high-quality training through practical operations and exchanges
with experts.
As the operation center of the aesthetic medicine business of the Company in the Chinese market,
Sinclair (Shanghai), a wholly-owned subsidiary, continues to be committed to the high-end injection
market in the field of aesthetic medicine. By the end of 2022, the number of cooperative hospitals
that have signed contracts with Sinclair (Shanghai) had exceeded 500, and the number of trained and
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
certified doctors had exceeded 1,100. By taking advantages of the medical resources of global experts
through the official learning platform - "Sinclair Education Vision", it continues to provide Chinese
doctors with more high-quality and innovative medical course contents to ensure that beauty seekers
can be provided with professional and efficient services.
In the future, the Company will, with respect to the aesthetic medicine business, adhere to the
strategy of "global operation layout, and dual-cycle operation and development", and continue to
focus on the global high-end aesthetic medicine market in order to form an international aesthetic
medicine business integrating research and development, manufacturing, and marketing. With
Sinclair, the core subsidiary, as the global operation platform, it will also integrate scientific and
technological innovation resources to realize the global operation layout of aesthetic medicine, and
continue to introduce the "aesthetic medicine + skin care" products featured by high technology and
great market potential into China and help the rapid localization and commercialization of
international high-quality products by virtue of the registration and marketing strength of the
Company in China to steadily expand the Chinese market and form a new pattern of domestic and
international dual-cycle interactive development.
IV. Quarterly Financial Statements
(I) Financial Statements
Prepared by: Huadong Medicine Co., Ltd.
March 31, 2023
Unit: CNY
Item Balance at the end of the period Balance at the beginning of the year
Current assets:
Monetary funds 2,375,152,352.20 3,996,302,178.41
Balances with clearing companies
Lending to banks and other financial
institutions
Financial assets held for trading
Derivative financial assets 29,624,778.28 29,907,470.68
Notes receivable 8,424,980.99 8,424,980.99
Account receivable 8,634,543,140.84 7,198,746,788.59
Financing of receivables 1,072,015,668.04 1,002,511,208.21
Accounts prepayment 558,908,474.57 500,083,953.14
Premiums receivable
Reinsurance accounts receivable
Receivable from subcontracting
reserves
Other receivables 426,378,917.15 283,710,955.63
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Including: Interest receivable
Dividends receivable 223,747.65 223,747.65
Financial assets purchased under
resale
Inventories 5,055,660,372.20 4,495,483,328.54
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 154,239,503.07 52,692,618.78
Total current assets 18,314,948,187.34 17,567,863,482.97
Non-current assets:
Loans and advances
Debt investment
Other debt investment
Long-term accounts receivable
Long-term equity investment 1,615,531,125.55 1,659,076,538.78
Other equity instrument investment 409,905,775.09 360,910,876.41
Other non-current financial assets
Investment real estate 13,391,671.22 13,648,240.14
Fixed assets 3,932,528,399.48 3,981,653,265.52
Construction in progress 913,273,558.34 873,159,427.47
Productive biological assets
Oil and gas assets
Right-of-use asset 146,533,933.11 166,505,297.17
Intangible assets 2,250,237,369.24 2,280,064,207.30
Development expenditures 689,292,520.17 641,354,586.80
Goodwill 2,455,916,241.27 2,441,387,413.59
Long-term deferred expenses 20,514,237.77 16,457,278.57
Deferred income tax assets 153,369,860.61 152,842,858.97
Other non-current assets 1,199,757,888.07 1,037,279,933.15
total of Non-current assets 13,800,252,579.92 13,624,339,923.87
Total assets 32,115,200,767.26 31,192,203,406.84
Current liabilities:
Short-term borrowing 563,013,919.12 947,516,383.37
Borrowings from the Central Bank
Borrowings from banks and other
financial institutions
Financial assets held for liabilities 14,841,896.97 14,841,896.97
Derivative financial liabilities
Notes payable 1,360,474,461.93 1,029,409,686.81
Accounts payable 4,990,423,949.03 4,873,029,466.44
Advance receipts 881,243.42 1,154,243.42
Contract Liabilities 192,637,694.45 146,488,489.07
Assets sold under agreements to
repurchase
Deposits from customers and
interbank
Receiving from vicariously traded
securities
Acting underwriting securities
Employee remuneration payable 175,666,718.25 256,883,423.68
Taxes payable 479,789,639.50 429,457,804.81
Other payables 2,684,871,969.84 2,290,407,022.05
Including: Interest payable
Dividends payable 224,219.60 14,924,219.60
Handling charges and commissions
payable
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Dividends payable for reinsurance
Held-for-sale liabilities
Non-current liabilities due within one
year
Other current liabilities 24,158,784.99 15,788,164.30
Total Current Liabilities 10,627,556,249.33 10,152,812,095.73
Non-current liabilities:
Reserve fund for insurance contracts
Long-term borrowings 677,604,268.25 1,051,457,747.44
Bonds payable
Including: preference shares
Perpetual bonds
Lease liabilities 105,228,290.55 84,610,324.98
Long-term accounts payable 289,977,495.12 287,497,209.49
Long-term employee remuneration
payable
Estimated liabilities 39,859,049.95 37,925,549.41
Deferred income 179,106,792.98 126,123,512.71
Deferred income tax liabilities 202,084,083.93 202,084,083.93
Other non-current liabilities 73,251,500.00 73,251,500.00
Total non-current liabilities 1,567,111,480.78 1,862,949,927.96
Total liabilities 12,194,667,730.11 12,015,762,023.69
Shareholder’s equity:
Shareholder Equity 1,753,995,348.00 1,753,995,348.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserves 2,387,821,545.06 2,377,887,246.39
Less: Treasury shares 104,645,000.00 104,645,000.00
Other comprehensive incomes -119,904,045.95 -88,552,636.42
Special reserves
Surplus reserves 1,151,441,705.28 1,151,213,039.48
General risk preparations
Undistributed profits 14,245,364,208.58 13,488,021,239.94
Total owners" equities attributable to
equity holders of the parent company
Equity of minority shareholders 606,459,276.18 598,522,145.76
Total owners" equity 19,920,533,037.15 19,176,441,383.15
Total of liabilities and Owners’ equities 32,115,200,767.26 31,192,203,406.84
Legal Representative: LYU Liang Officer in charge of accounting: LYU Liang Head of accounting department: QIU Renbo
Unit: CNY
Item Amount of the current period Amount of the previous period
I. Total operating revenue 10,114,531,331.77 8,932,579,251.75
Including: Operating income 10,114,531,331.77 8,932,579,251.75
Interest income
Insurance premiums earned
Handling charges and
commissions income
II. Total operating costs 9,111,221,456.77 8,028,129,305.85
Including: Operating cost 6,790,724,204.77 5,914,898,927.47
Interest expense
Handling charges and
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
commissions expenses
Surrender value
Net payments for insurance
claims
Net appropriation of deposit
for duty
Expenditures dividend policy
Amortized reinsurance
expenditures
Taxes and surcharges 53,150,033.98 49,868,639.14
Sales expense 1,642,616,610.16 1,433,493,143.24
Administrative expenses 330,086,070.32 302,601,116.29
R&D expenses 265,493,695.70 319,207,245.09
Financial expense 29,150,841.84 8,060,234.62
Including: interest expenses 34,466,716.93 20,956,363.85
Interest income 12,491,377.82 24,163,304.15
Add: Other income 14,582,456.30 10,669,007.70
Investment income (loss is
-61,752,708.66 -27,961,493.36
represented with “-”)
Including: Incomes from
investment in associated enterprises and -52,816,907.73 -20,764,035.59
joint ventures
Gains from the
derecognition of financial assets
measured at amortized cost
Exchange income (Loss is
represented with “-“)
Net exposure hedging income
(loss is represented with “-”)
Net income from changes in fair
value (loss is represented with “-”)
Credit impairment losses (Losses
are indicated by “-”)
Impairment loss of assets (loss is
represented with “-”)
Asset disposal income (loss is
-2,199,859.71 557,821.07
represented with “-”)
III. Operating Profit (loss is represented
with “-")
Add: Non-operating income 1,389,195.74 831,619.81
Less: Non-operating expenditure 6,049,187.60 5,355,930.46
IV. Total Profit (Total loss is represented
with “-”)
Less: Income tax expenses 189,354,280.74 169,158,396.42
V. Net Profit (net loss is represented with
“-”)
(I) Categorized by the continuity of
operations
operations (net loss is represented with 759,925,490.33 714,032,574.24
“-”)
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
operations (net loss is represented with
“-”)
(II) Categorized by attribution of the
ownership:
parent company’s owners
Shareholders
VI. Net of tax from other comprehensive
-31,351,409.53 -15,014,785.25
incomes
Net of tax from other comprehensive
incomes attributable to the owner of the -31,351,409.53 -15,014,785.25
Parent Company
(I) Other comprehensive incomes
not to be reclassified to profit or loss
changes in the defined benefit plan
not to be reclassified to profit or loss via
equity method
equity instrument investment
concerning the enterprise’s own credit
risks
(II) Other comprehensive incomes
-32,045,080.68 -15,014,785.25
to be reclassified to profits and losses
to be reclassified to profit or loss via
equity method
other debt investment
which are reclassified to other
comprehensive incomes
other debt investment
-32,045,080.68 -15,014,785.25
currency financial statements
Net of tax from other comprehensive
incomes attributable to minority
shareholders
VII. Total amount of comprehensive
income
Total comprehensive income
attributable to Parent Company 723,933,566.94 689,349,989.88
shareholders
Total comprehensive income
attributable to the minority shareholder
VIII. Earnings per share:
(I) Basic earnings per share 0.4316 0.4025
(II) Diluted earnings per share 0.4315 0.4025
As for the merger under the same control during this period, the merged part’s net profit gained before the merger is CYN ___, and
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
its net profit gained during the previous period is CNY ___.
Legal Representative: LYU Liang Officer in charge of accounting: LYU Liang Head of accounting department: QIU Renbo
Unit: CNY
Item Amount of the current period Amount of the previous period
I. Cash flows generated from operating
activities:
Cash received from sale of
commodities or rendering of services
Net increase in deposits from
customers and placements from
corporations in the same industry
Net increase in borrowings from the
central bank
Net increase amount in borrowing
funds capital from other financial
institutions
Cash receipts from premiums under
direct insurance contracts
Net cash received from reinsurance
business
Net increase in deposits from
policyholders and investment funds
Cash received from interests, handling
charges and commissions
Net increase in borrowings from banks
and other financial institutions
Net increase in repurchase business
funds
Net cash received from vicariously
traded securities
Refund of tax and levies 1,207,680.51 4,056,067.04
Other cash received relating to
operating activities
Sub-total of cash inflows from the
operating activities
Cash paid for purchasing commodities
and receiving labor services
Net increase in loans and advances to
customers
Net increase in balance with the
central bank and due from banks and
other financial institutions
Cash paid for indemnity of original
insurance contract
Net increase in lending to banks and
other financial institutions
Cash paid for interests, handling
charges and commissions
Commissions on insurance policies
paid
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Cash paid to and paid for employees 845,672,966.99 719,758,010.16
Payments of all taxes and fees 609,699,664.95 477,339,851.40
Other Cash paid for operating
activities
Sub-total of cash outflow of the
operating activities
Net cash flows generated from operating
-246,152,770.16 -260,603,628.32
activities
II. Cash flows generated from investment
activities
Cash received from disinvestment
Cash received from returns on
investments
Net amount of cash recovered from
disposal of fixed assets, intangible assets 149,204.89 1,439,970.00
and other long-term assets
Net cash amount received from
disposal of subsidiaries and other
business units
Cash received from other concerning
investing activities
Sub-total of cash flow-in from
investment activities
Cash payments to acquisition &
construction of fixed assets, intangible 398,081,956.46 193,143,577.15
assets and other long-term assets
Cash paid for investment 51,794,250.00 29,400,000.00
Net increase in secured loans
Net cash paid for acquirement of
subsidiaries or other business units
Other cash paid which is related to
investing activities
Sub-total of cash flow-out from
investment activities
Net cash flow generated from investment
-440,055,312.86 -605,134,020.79
activities
III. Cash flows generated from financing
activities
Cash received from investment
absorption
Including: Cash from absorbing
minority shareholders’ equity investment 30,000,000.00
by subsidiaries
Cash received from borrowings 907,116,269.61 709,751,200.00
Other cash received relating to
financing activities
Sub-total of cash inflows from financing
activities
Cash repayments of amounts
borrowed
Cash payments for distribution of
dividends or profits or settlement of 64,853,544.08 38,336,990.15
interest expenses
Including: Dividends and profits
paid by subsidiaries to minority 13,328,000.00 1,960,000.00
shareholders
First Quarterly Report 2023 of Huadong Medicine Co., Ltd.
Other cash paid which is related to
financing activities
Sub-total of cash outflows from
financing activities
Net cash flows generated from financing
-849,412,643.67 -5,561,294.58
activities
IV. Effects of foreign exchange rate
changes on cash and cash equivalents
V. Net increment of cash and cash
-1,531,091,755.18 -860,487,352.54
equivalents
Add: Opening balance of cash and
cash equivalents
VI. Balance at the end of the year of the
cash and cash equivalents
(II) Audit Report
Has the First Quarterly Report been audited?
□ Yes No
The First Quarterly Report has not been audited.
Board of Directors of Huadong Medicine Co., Ltd.
April 21, 2023
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