Securities code: 600420 securities abbreviation: Shanghai Shyndec Pharmaceutical Co.Ltd(600420) Announcement No.: 2022-007 bond Code: 110057 bond abbreviation: Modern convertible bond
Shanghai Shyndec Pharmaceutical Co.Ltd(600420)
Announcement on the proposed provision for impairment of goodwill
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 individual and joint liabilities for the authenticity, accuracy and completeness of its contents. In order to more objectively and truly reflect the financial status and asset value of Shanghai Shyndec Pharmaceutical Co.Ltd(600420) (hereinafter referred to as “the company” or ” Shanghai Shyndec Pharmaceutical Co.Ltd(600420) “), according to the accounting standards for Business Enterprises No. 8 – asset impairment, accounting regulatory risk tips No. 8 – goodwill impairment and the company’s accounting policies, through the preliminary evaluation and calculation of the third-party professional evaluation company, Based on the principle of prudence, the company plans to make provision for impairment of related goodwill of its holding subsidiary Sinopharm one heart Pharmaceutical Co., Ltd. (hereinafter referred to as “Sinopharm one heart”) and its wholly-owned subsidiary Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. (hereinafter referred to as “Sinopharm Jinshi”). In accordance with the relevant provisions of the Listing Rules of Shanghai Stock Exchange, the specific situation is hereby announced as follows:
1、 Overview of goodwill impairment provision to be withdrawn this time
1. Formation of goodwill
The original book value of Sinopharm Yixin’s goodwill is 42.4058 million yuan, and the original book value of Sinopharm Jinshi’s goodwill is 167.4832 million yuan. The above goodwill is formed when the subsidiaries of the company’s indirect controlling shareholder China Meheco Group Co.Ltd(600056) Group Co., Ltd. (hereinafter referred to as “Sinopharm group”) initially acquired the above enterprises without the same control, because the paid consideration is greater than the fair value share of identifiable net assets on the acquisition date. In October 2016 Shanghai Shyndec Pharmaceutical Co.Ltd(600420) when the above assets were restructured under the same control, the goodwill generated by its original merger and acquisition into Sinopharm group was continued in accordance with the relevant provisions of accounting standards, and no new goodwill was generated.
2. Historical provision for goodwill impairment
According to the relevant provisions of the accounting standards for business enterprises and the company’s accounting policies, after the company has implemented and completed the major asset restructuring, it will judge and test the impairment signs of goodwill according to the relevant evaluation report issued by Watson (Beijing) international evaluation company at the end of each year.
As of December 31, 2020, the company has accrued 13.395 million yuan of goodwill impairment for Sinopharm Yixin, and the book value of goodwill is 29.0108 million yuan; The accumulated provision for goodwill impairment of Sinopharm Jinshi is 64.3478 million yuan, and the book value of goodwill is 103.1354 million yuan.
2、 The proposed provision for impairment of goodwill
1. Sinopharm intends to withdraw provision for goodwill impairment
Securities code: 600420 securities abbreviation: Shanghai Shyndec Pharmaceutical Co.Ltd(600420) Announcement No.: 2022-007 bond Code: 110057 bond abbreviation: Modern convertible bond
Sinopharm Xinyi is mainly engaged in the R & D, production and sales of antitumor drugs. At present, its main products are thymopentin for injection and mannan peptide for injection.
Thymopentin for injection was listed in the list of national key monitored rational drug use drugs in 2019 and completely withdrawn from the medical insurance list of all provinces in China in 2021. According to the data of Intranet, the sales of thymopentin for injection in urban public hospitals in China decreased by 70.41% year-on-year in 2020 and 55.62% year-on-year in the first half of 2021. Under the influence of the declining trend of market sales and sales unit price, the sales of thymopentin for injection of Sinopharm has decreased significantly year by year in recent three years; In addition, Sinopharm’s third terminal development for the product was affected by the low network price and competitive product price, and the market sales of the product in 2021 did not meet the expectations.
Product name and specification year sales volume unit price
(10000 pieces) month on month change range
449.57 0.06% – 5.62% in 2019
Thymopentin for Injection
(specification: 10mg) 314.58% – 30.03% – 39.14% in 2020
264.90% – 15.79% – 27.86% in 2021
At present, Sinopharm’s mannan peptide for injection is mainly sold through hospital channels. Since 2021, the product has been successively transferred out of the provincial medical insurance directory. According to the policy documents issued by various provinces and cities, it will gradually withdraw from the medical insurance directory of most provinces in China in 2022. It is expected that the sales volume of this product will decrease significantly after 2022. Based on the current policy and market environment, it is difficult for Sinopharm to restore the sales volume of the above main products to the historical level in the future. In view of the adverse factors of market competition, Sinopharm has actively taken various measures, such as accelerating the consistency evaluation of potential varieties, adjusting the R & D direction, increasing foreign cooperation and expanding sales channels outside the hospital. However, because product development and market development require a certain investment cycle, it is less likely to achieve significant improvement in operating benefits in the short term. According to the principle of prudence, it is estimated that the company plans to withdraw 29.0108 million yuan of impairment provision for its goodwill. 2. Sinopharm Jinshi plans to withdraw provision for goodwill impairment
Sinopharm Jinshi is mainly engaged in the R & D, production and sales of anti infective drugs. Affected by comprehensive factors such as medical insurance catalog adjustment, national centralized procurement and price linkage, and drug consistency evaluation, its profitability has been in a downward trend in recent years, and there was no significant improvement in 2021, which is far from the expected target.
Unit: 10000 yuan
Product categories / sales revenue 2019 2020 2021
Anti infection 39403.27 28300.38 28380.13
Nervous system drugs 1049.71 907.82 1019.87
Cardiovascular 1806.25 1585.77 1263.28
Securities code: 600420 securities abbreviation: Shanghai Shyndec Pharmaceutical Co.Ltd(600420) Announcement No.: 2022-007 bond Code: 110057 bond abbreviation: Modern convertible bond
Product categories / sales revenue 2019 2020 2021
Operating data 2019 2020 2021
Operating income 45532.74 34778.10 34127.98
Net profit 1128.94 272.37 401.24
Because the key product of Sinopharm Jinshi, cefdizime sodium for injection, was not included in the national medical insurance catalogue in 2021, the product gradually withdrew from several provincial medical insurance catalogues in 2021, and the sales volume decreased significantly, with a decrease of 40.88% in 2021 compared with 2019; Compared with 2019, the sales volume of cefuroxime axetil oral preparation decreased by 47.17%.
The consistency evaluation of cephalosporin injection varieties has not been started, and it will be difficult to be shortlisted for medical insurance and national volume procurement in the short term, resulting in the withdrawal of relevant products in hospital channels.
In addition, Sinopharm Jinshi’s existing plant was built in the early 1990s, with a small area. It is difficult to carry out capacity transformation and improvement of safety and environmental protection facilities, and it is difficult to implement new products. Relocation plan since the company received the land requisition deposit returned by the local government in 2021, Sinopharm Jinshi will not be able to continue to promote the relocation plan in the short term, which increases the difficulty for the expansion of Sinopharm Jinshi’s future production capacity and business scale. Based on the current product status and production and operation conditions of Sinopharm Jinshi, the company judges that there is a large gap between the foreseeable future performance and the prediction of goodwill generated by the merger and acquisition of Sinopharm Jinshi. Adhering to the principle of prudence, the company plans to make an impairment provision of 103.1354 million yuan for the goodwill of Sinopharm Jinshi.
3、 Impact of the proposed provision for goodwill impairment on the company
After the provision for impairment of goodwill is made this time, the book value of goodwill of Sinopharm Yixin and Sinopharm Jinshi is 0 yuan. The company plans to withdraw a total of 132.1462 million yuan of goodwill impairment provision, which is included in the company’s consolidated profit and loss in 2021, affecting the company’s consolidated net profit attributable to the shareholders of the listed company of -132.1462 million yuan in 2021, and correspondingly affecting the company’s consolidated owner’s equity attributable to the shareholders of the listed company of -132.1462 million yuan as of December 31, 2021.
The company’s proposed provision for goodwill impairment has not been confirmed by the asset appraisal institution and audited by the accounting firm. The final data shall be subject to the evaluation report and the data approved by the accounting firm.
4、 Risk tips
The amount of goodwill impairment provision to be withdrawn this time is obtained from the prediction and analysis of the impact of the company’s future market environment and business expectations on Sinopharm Yixin and Sinopharm Jinshi. Subsequently, the company will issue a special evaluation report on the goodwill test at the end of the reporting period according to the year-end final accounts, which will be confirmed after audit by the audit institution.
Please pay attention to investment risks.
Securities code: 600420 securities abbreviation: Shanghai Shyndec Pharmaceutical Co.Ltd(600420) Announcement No.: 2022-007 bond Code: 110057 bond abbreviation: Modern convertible bond
It is hereby announced.
Shanghai Shyndec Pharmaceutical Co.Ltd(600420) board of directors
January 15, 2022