Securities code: Sunshine Guojian Pharmaceutical(Shanghai) Co.Ltd(688336) securities abbreviation: Sunshine Guojian Pharmaceutical(Shanghai) Co.Ltd(688336) Announcement No.: 2022019 Sunshine Guojian Pharmaceutical(Shanghai) Co.Ltd(688336) Pharmaceutical (Shanghai) Co., Ltd
Announcement on the company’s annual profit distribution plan in 2021
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Important content tips:
Sunshine Guojian Pharmaceutical(Shanghai) Co.Ltd(688336) Pharmaceutical (Shanghai) Co., Ltd. (hereinafter referred to as “the company”) plans not to distribute cash dividends, bonus shares, convert accumulation fund into share capital, and carry forward undistributed profits to the next year in 2021.
The profit distribution plan has been deliberated and approved at the 7th Meeting of the 4th board of directors and the 4th meeting of the 4th board of supervisors of the company, and needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
The main reason why the company did not make profit distribution in this year is to make a comprehensive judgment based on the development status of the company’s main business and the necessary strategic development needs of the company in combination with the industry characteristics, development stage and business model of the company. The company is in the stage of accelerating upgrading, expansion and development, and needs to invest a lot of money in the R & D of innovative drugs and capacity construction, so as to continuously improve the company’s technical strength and core competitiveness.
1、 Contents of profit distribution plan
According to the audit of Ernst & Young Huaming Certified Public Accountants (special general partnership), the net profit attributable to the shareholders of the listed company in 2021 was 1805851156 yuan. As of December 31, 2021, the net profit available for distribution at the end of the period was 162827848603 yuan. In order to meet the needs of production and operation funds and ensure the sustainable development of the company, the board of directors of the company proposed that in 2021, no cash dividend, no bonus shares, no conversion of provident fund into share capital, and the undistributed profits should be carried forward to the next year.
The profit distribution plan needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
2、 Reasons for no profit distribution in 2021
In 2021, the net profit of the company was -169610911 yuan, the net profit attributable to the shareholders of the listed company was 1805851156 yuan, the net profit attributable to the owners of the parent company after deduction was -756968820 yuan, and the accumulated undistributed profit of the parent company was 162827848603 yuan. The company plans not to distribute the profit in 2021. The specific reasons are as follows:
(I) industry situation and characteristics of listed companies
The industry of the company is biomedical industry. Biomedicine has the characteristics of high innovation, difficult research and development, high risk, high investment and long cycle. At the same time, in the development process of the company, it is necessary to focus on the impact of regulatory policies, technology updates, market development trends and other factors.
In recent years, the pharmaceutical and biological industry has continued to change. Due to the intensification of market competition and policy adjustment, differentiated innovation oriented by clinical demand has become the development direction of China Meheco Group Co.Ltd(600056) biological enterprises. The industry is undergoing the upgrading and evolution process of “me too best in class – first in class”. Focusing on innovative R & D, increasing investment in innovative drug R & D, and improving core competitiveness and standardized and large-scale production and operation capacity are the basis for the sustainable operation of biomedical enterprises.
(II) development stage of the company and its own business model
The company is the first batch of innovative biomedical enterprises focusing on antibody drugs in China. At the same time, it has the ability of independent research and development, industrialization and commercialization. With innovative therapeutic antibody drugs as the main research and development direction, the company provides high-quality, safe and effective clinical solutions for the treatment of major diseases such as autoimmune diseases and tumors. Committed to becoming an innovative therapeutic antibody drug company benefiting China and facing the world, and realizing the corporate vision of “making innovative antibody drugs within reach”.
As an innovative biomedical enterprise focusing on antibody drugs, the company has a National Engineering Research Center for antibody drugs, and its core technology covers the whole process of antibody drug R & D. The company has prospectively constructed multiple technical platforms for innovative antibody drugs, and has the systematic innovation ability from drug discovery, preclinical research, pilot process development, quality research, clinical research to industrialization.
At present, the company is in the stage of rapid development and needs to invest a lot of money in the R & D, industrialization, commercialization and capacity construction of innovative drugs.
(III) profitability and capital demand of the company
In 2021, the company realized an operating income of 92880694832 yuan, the net profit attributable to shareholders of the listed company was 1805851156 yuan, and the net profit attributable to owners of the parent company after deduction was -756968820 yuan. Under the policy of increasing the net profit of the parent company after R & D, the main focus is to increase the net profit of the parent company in 2021, but the net profit of the non research and development company is still returned to the parent company. But on the whole, the company’s operation and financial situation are stable. In 2022, the company’s business development will face new challenges. On the one hand, the Omicron virus swept the world in 2022, which will put great pressure on the prevention and control of the epidemic in China. If the epidemic continues to be uncontrolled, it will have a great adverse impact on the sales of the company’s main products; On the other hand, ISEP, the company’s core product, participated in the centralized purchase of Guangdong alliance, and the product price is at risk of sharp decline. In addition, the company will continue to maintain a high proportion of R & D investment, accelerate the progress of key R & D projects and raise funds to invest in project construction, and enhance its core competitiveness. At the same time, in order to adapt to the rapid development of business scale, the company will further improve the level of quality control and internal management, continue to be bigger and stronger, and strive to create a good return on investment for all shareholders. In this process, the company needs more funds to ensure the development of the company’s business and the realization of its business objectives.
(IV) reasons why the company does not distribute profits
In consideration of promoting the steady development of the company, the board of directors proposed that the annual profit distribution plan for 2021 should be no cash dividend, no bonus shares, no conversion of provident fund into share capital, and the undistributed profits should be carried forward to the next year.
The main reason why no profit distribution will be made in 2021 is to make a comprehensive judgment based on the development status of the company’s main business and support the company’s necessary strategic development needs in combination with the company’s industry characteristics, development stage and business model. The company is in the stage of accelerating upgrading, expansion and development, and needs to invest a lot of money in the R & D of innovative drugs and capacity construction, so as to continuously improve the company’s technical strength and core competitiveness.
(V) the exact purpose of retained undistributed profits and the estimated income of the company
At the end of 2021, the retained undistributed profits of the company will be transferred to the next year, mainly used for R & D investment, fund-raising investment projects and other expansion of production capacity construction and production and operation development. The income level related to the undistributed profits of the company is affected by many factors, such as the macroeconomic situation, changes in asset quality, asset interest rate and so on.
In the future, the company will strive to do a good job in business operation, strive for a higher profit level, strive to repay investors in the form of cash dividends, comprehensively consider various factors related to profit distribution in strict accordance with relevant laws and regulations and the articles of association, actively implement the company’s profit distribution policy, share the achievements of the company’s development with investors, and better safeguard the long-term interests of all shareholders. 3、 Decision making procedures performed by the company
(I) convening, deliberation and voting of the board meeting
At the 7th Meeting of the 4th board of directors held on March 28, 2022, the company deliberated and approved the proposal on the company’s annual profit distribution plan in 2021, agreed to the profit distribution plan and agreed to submit the plan to the 2021 annual general meeting of shareholders of the company for deliberation.
(II) opinions of independent directors
The independent directors believe that the annual profit distribution plan of the company in 2021 complies with the provisions of relevant laws and regulations on cash dividends, meets the reasonable needs of the company’s future development, and does not damage the interests of the company and shareholders, or the interests of small and medium-sized investors. Approve the proposal on the company’s annual profit distribution plan for 2021 proposed by the board of directors.
(III) opinions of the board of supervisors
The company held the fourth meeting of the Fourth Board of supervisors on March 28, 2022, deliberated and passed the proposal on the company’s annual profit distribution plan in 2021, agreed to the profit distribution plan formulated by the company, and agreed to submit the plan to the 2021 annual general meeting of shareholders for deliberation.
4、 Relevant risk tips
This profit distribution plan combines the company’s profitability, future capital demand and other factors, and will not have a significant impact on the company’s operating cash flow, nor will it affect the company’s normal operation and long-term development.
The profit distribution plan can only be implemented after being submitted to the 2021 annual general meeting of shareholders of the company for deliberation and approval. Please pay attention to the investment risks.
It is hereby announced.
Sunshine Guojian Pharmaceutical(Shanghai) Co.Ltd(688336) Pharmaceutical (Shanghai) Co., Ltd. board of directors March 29, 2022
