Comments on the management of the board of directors of Lepu Medical in 2020.

The business review of the board of directors of Lepu Medical (300003) in the first half of 2020 is as follows:

I. Overview

During the reporting period, the company (including subsidiaries, the same below) realized an operating income of 4,237,839,200 yuan, an increase of 8.08% year-on-year; Operating profit1375.4093 million yuan, up by 3.50% year-on-year; The total profit was 65.438+39.2 million yuan, up 0.64% year-on-year; Net profit1183,982,700 yuan, up 215% year-on-year; The net profit attributable to shareholders of listed companies was 654.38+0.65,438+0.403.466 million yuan, a year-on-year decrease of 654.38+0.30%; After deducting non-recurring gains and losses, the net profit attributable to shareholders of listed companies was114496400 yuan, up by 21.20% year-on-year; The net cash flow from operating activities was 65,438+065,438+037,063 in 700 yuan, with a year-on-year increase of 665,438+0.72%; The weighted average return on equity was 14. 13%, down 2.80 percentage points from the same period of last year.

At the end of the reporting period, the company carefully assessed some technical intellectual property rights caused by the acquisition of in-vitro diagnosis business, and made provision for impairment of RMB56,307,700, which had an impact on the net profit attributable to shareholders of listed companies of RMB50,209,500.

During the reporting period, the impact of non-recurring gains and losses on the company's net profit attributable to shareholders of listed companies was 25,850,200 yuan, mainly due to the company's receipt of government subsidies; In the same period of last year, the non-recurring profit and loss, which was mainly generated by Junshi Bio-related income, was RMB 235,865,438+0.80, a significant decrease year-on-year. During the reporting period, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses increased by 265,438+0.20% compared with the same period of last year.

Excluding the above specific impairment and non-recurring business impact, the net profit attributable to shareholders of listed companies was1164,705,900 yuan, an increase of 26.66% compared with 919,565,800 yuan in the same period of last year.

At the end of the reporting period, the company's total assets were 65,438+0,778,765,438+0,654,38+0.70 million yuan, an increase of 65,438+065,438+0.69% compared with the beginning; The net assets attributable to shareholders of listed companies were RMB 8,436,543.38+0,334.7 million, an increase of 65,438+02.68% compared with the beginning of the period; The owner's equity is 965,438+067,295,600 yuan, an increase of 65,438+04.52% compared with the beginning.

During the reporting period, the company was affected by the COVID-19 epidemic in the first quarter, and its overall performance dropped sharply compared with the same period. In the second quarter, with the improvement of domestic epidemic situation, its operating conditions showed a good growth trend. Details are as follows:

(1) operating conditions

(1) medical devices

The medical equipment department is the largest part of the company's business. During the reporting period, the operating income of this sector reached 2,255,379,300 yuan, up by 29. 16% year-on-year, and continued to maintain a rapid growth trend. The company's self-produced equipment products include pan-cardiovascular core equipment and non-cardiovascular equipment. During the reporting period, the operating income of self-produced equipment products was 2,077,406,900 yuan, a year-on-year increase of 36.84%.

1. 1 self-produced instrument products

1) pan-cardiovascular core instrument

1. 1. 1 core cardiovascular intervention products

Including cardiac coronary intervention and peripheral intervention products. During the reporting period, the company's core cardiovascular intervention products achieved operating income of 677,858,400 yuan. Due to the sharp decline in the first quarter, the half-year turnover decreased by 25.4 1% year-on-year, although it rebounded in the second quarter.

During the reporting period, the revenue of intravascular drug-free stent system (Nano) increased steadily, accounting for 47.92% of the sales structure of metal stents. Bioabsorbable stents (NeoVas) have sold well, and have been implanted in hundreds of hospitals in 29 provinces, contributing new achievements.

1. 1.2 structure and cardiac rhythm instrument

Including structural heart disease instruments and heart rhythm instruments. During the reporting period, the company realized the operating income of structural and cardiac rhythm devices of 965,438,900 yuan, down 5.54% year-on-year, maintaining its leading position in the market. The company's self-produced dual-chamber pacemakers have completed the bidding and procurement work in Qinghai and Guizhou, and the number of provinces included in the recruitment has increased to 29.

2) Non-cardiovascular equipment

Including in vitro diagnostic products, surgical instruments, anesthetic products, artificial intelligence medical related products and home medical devices.

During the reporting period, the company realized the operating income of non-cardiovascular devices1307,554,600 yuan, a year-on-year increase of 155.38%.

1.2 agent distribution of instrument products

Relying on Lepu Medical Power, Weikang Tongda, Lepu Hengtong and other companies, the company has carried out the agency and distribution business of equipment products in various regions, strived to build a high-quality agency and distribution platform for domestic high-end cardiovascular equipment products, and actively carried out the sales and distribution business of the company's own products and some agency products. During the reporting period, the income from agency distribution business was177,972,500 yuan, down by 2 1.95% compared with the same period of last year.

(2) drugs

The pharmaceutical sector is mainly divided into API business and preparation business (generic drugs), which is the company's long-term and stable cash flow business. During the reporting period, the pharmaceutical sector achieved operating income of1853,827,600 yuan, down 8.87% year-on-year; The business income of API was RMB 307.339 million, down by 24. 15% year-on-year.

During the reporting period, the pharmaceutical business realized an operating income of RMB 654,38+0,546,488,600, down 5.06% year-on-year. Due to centralized procurement, the sales prices of clopidogrel bisulfate and atorvastatin calcium in medical institutions have dropped significantly. Although the sales volume of the two products increased rapidly in medical institutions, the operating income decreased significantly, resulting in a significant decrease in the operating income of preparations in medical institutions. However, the above two drugs have achieved steady growth in retail pharmacies, and the operating income of their comprehensive preparation business has only decreased by 5%.

(3) Medical services

The medical service sector is a new business sector that the company is cultivating. At this stage, the main purpose is to increase the market share of this sector, realize the coordinated development with the equipment sector and the drug sector, and cause short-term operating losses. During the reporting period, affected by the epidemic situation in COVID-19, the medical service sector realized operating income of107778900 yuan, down by 7.69% year-on-year.

(4) New medical format

Internet medical care is one of the key points of the company's future development. The company is trying various business models and making breakthroughs in technology. The artificial intelligence system developed by the company is the support for the future development of this business. At present, no operating income has been realized.

The development of applied finance business has promoted the rapid development of the company's main business, which is also one of the business models that the company is currently trying, and has not achieved operating income.

(5) Total financial expenses of the Group

During the reporting period, while the company's existing business scale continued to expand, in order to further expand the above-mentioned high-end generic drugs, new biopharmaceuticals, third-generation insulin and other drugs, the parent company arranged financing as a whole, and assumed a large amount of financial expenses, which affected the parent company's current net profit.

(2) R&D innovation

1, medical equipment

The company is the only national engineering technology research center for interventional diagnosis and treatment of cardiovascular diseases in China awarded by the Ministry of Science and Technology. It is one of the few enterprises in the field of domestic high-end medical equipment that can form strong competition with foreign products, and it is the leading domestic high-end medical product industry group for interventional diagnosis and treatment of cardiovascular diseases. Cardiovascular interventional therapy, the core business of the company, is in the stage of technological transformation, mainly in the following aspects: 1. Interventional therapy has entered the era of non-implantation and less implantation, and the company's research and development focuses on the innovation of various instruments to meet the needs of non-implantation and less implantation interventional therapy, including implanted instruments for coronary intervention, peripheral intervention and congenital heart disease intervention and auxiliary instruments to realize the above process. 2. In the era of valve diseases changing from surgery to interventional therapy, the company will gather to develop various new instruments for aortic valve, mitral valve and tricuspid valve replacement or repair interventional therapy.

1. 1 Interventional therapy without implants and auxiliary devices

(1) therapeutic instrument for coronary heart disease

Clinical treatment products include certified drug stents (Partner/Guriater/Nano-metal drug stents, NeoVas fully absorbed drug stents), drug balloons (paclitaxel drug balloon Vesselin) and interventional accessories (guide wire/catheter/sheath /Y valve/pressure pump/compressor/syringe), as well as interventional implantation balloons (coronary artery /ACS/ in situ drug balloon, etc.). ) is under study.

NeoVas Bioabsorbable Stent: NeoVas Bioabsorbable Stent was approved and registered by NMPA of China on February 20 19 after more than ten years of research and five years of clinical experimental research. The company will carry out 2000 post-marketing clinical studies according to the requirements of the Evaluation Center of the State Administration of Pharmaceutical Products, and steadily explore the market of NeoVas stent products. At the same time, accelerate the development of a new generation of biodegradable stents.

(2) Peripheral therapeutic instruments

Degradable peripheral stent: In peripheral lesions, many lesions treated with metal stents can be replaced by degradable stents, especially for vascular stenosis and thrombosis below the knee. The company is developing a variety of biodegradable peripheral stents suitable for each lesion.

Peripheral drug balloon: At present, the mainstream method to treat peripheral vascular stenosis or thrombosis is ordinary balloon dilatation. In principle, most of the expansion of ordinary balloons should be replaced by drug balloons. At present, all the peripheral drug balloons on the market are high-dose (3μg/mm2) paclitaxel balloons, which will lead to high paclitaxel content in blood and increase the risk of death of patients when treating some large-diameter lesions or long lesions. The development direction of peripheral drug balloon includes reducing the drug loading of paclitaxel by drug balloon and developing rapamycin microsphere drug-loaded balloon.

The company has developed a variety of peripheral indications with significantly reduced drug loading (≤ 1.5μg/mm2), and most of them are expected to enter the clinical trial stage this year. The company has also developed a drug-loaded balloon around rapamycin microspheres, which is expected to enter clinical trials in the second half of next year.

(3) To realize the intervention without implanting auxiliary instruments.

The biggest difference between drug balloon and degradable stent implantation and metal stent and common balloon is to ensure that drug balloon and degradable stent are completely attached to the tube wall. The drug release of the drug balloon depends on the full adhesion of the drug balloon to transfer the drug on the balloon to the blood vessel wall, thus releasing a sufficient amount of drug and finally resisting restenosis. Full adhesion of biodegradable stent is the only way to reduce long-term thrombosis. Therefore, it is necessary to develop all kinds of auxiliary catheters to promote the full adhesion of drug balloons and biodegradable stents, and it is also necessary to monitor the blood vessel wall before and after implantation with monitoring catheters. The main products are as follows: cutting balloon: early use of cutting balloon to solve the treatment of stent restenosis. With the wide use of drug stents, the incidence of restenosis is obviously reduced, and the function of cutting balloon is also transferred from therapeutic products to auxiliary products. It is mainly used for the early cutting and remodeling of blood vessels, so that some common balloon catheters can not be fully pre-expanded, and drug balloons and degradable stents can not be placed at the target lesion. Because of the use of cutting balloon and vascular anatomical remodeling, it can treat drug balloon and degradable stent, and expand the application scope of drug balloon and degradable stent.

Acoustic balloon: The stenosis of a large number of blood vessels is accompanied by severe calcification of blood vessels, which hinders the full release and adhesion of drug balloons or degradable stents. Acoustic balloon is used to treat calcified lesions, and the local acoustic energy provided by acoustic balloon breaks the calcified layer of blood vessels, making it possible to implant drug balloon and degradable stent.

(4) Plugging tool of degradable structure

Interventional therapy of structural occluder is gradually developing towards non-implantation. Compared with the traditional occluder, the biodegradable occluder can be gradually replaced by its own tissue after being implanted into the human body. While treating the defect, there is no foreign body residue in the body and long-term complications are eliminated, which will bring good news to countless patients. This invention and application made by independent innovation in China marks a breakthrough in the field of completely degradable occluder in China. The company is developing various degradable structural plugs:

Degradable ventricular septal occluder system: suitable for the treatment of ventricular septal defect in congenital heart disease. At present, the fully degradable occluder system has completed all clinical trials and entered the group. At present, it is in the postoperative follow-up stage, and the clinical follow-up effect is good. Will be registered in the fourth quarter of 2020. Estimated certification time, the first quarter of 2022.

Completely degradable atrial septal defect occluder: mainly used for interventional treatment of atrial septal defect complicated with congenital heart malformation. The occluder has a parachute locking structure with independent intellectual property rights, which ensures the safe and effective occlusion of atrial septal defect. At present, it has entered the pre-clinical preparation work. It is expected that the clinical trial will start in September 2020, the clinical trial report will be obtained in the fourth quarter of 2002/KLOC-0 and submitted to the State Administration of Medical Supplies for registration and acceptance, and the registration certificate will be obtained in the first quarter of 2023.

Biodegradable patent foramen ovale occluder: treating patent foramen ovale and preventing stroke. For the use and implantation of a new generation of products, product development has obtained a number of independent intellectual property patents in the aspects of degradable material weaving method, occluder structure design, occluder flower design, interventional delivery system design, delivery mode, etc., which fundamentally ensures the safety and effectiveness of implantation. The clinical trial of biodegradable patent foramen ovale occluder has started, and it is expected to enter the group at the end of August, and it will be completed in 202 1 and 1. The clinical summary report was obtained in the fourth quarter of 20021year and submitted to the State Administration of Medical Products for registration. It is expected to obtain the registration certificate in the first quarter of 2023.

Biodegradable left atrial appendage occluder: In order to prevent possible thromboembolism in the left atrial appendage, it is suitable for occlusion of the left atrial appendage in patients with nonvalvular atrial fibrillation who are not suitable for anticoagulant therapy. Based on the technology of the first generation left atrial appendage products and degradable materials, the second generation biodegradable left atrial appendage products have entered the stage of product project establishment and development.

1.2 interventional therapeutic instrument for valve diseases

The treatment of valve diseases has changed from surgery to interventional therapy, and the company will gather to develop various new instruments for aortic valve, mitral valve and tricuspid valve replacement or repair interventional therapy.

(2) Mitral and tricuspid valve repair or replacement systems and other products: On the basis of successful research and development of implantable aortic valve system via catheter, the company actively arranges interventional products that can treat mitral and tricuspid valve diseases, and its central apex mitral valve repair system and transcatheter mitral valve repair system are in the experimental research stage, while the transcatheter tricuspid valve repair system, transcatheter mitral valve replacement system and transcatheter tricuspid valve replacement system are in the research and development stage, and it is expected that they will enter the animal experimental research soon. The apical mitral valve repair system is in the stage of animal experiment and type inspection. It is planned to enter the domestic clinical trial stage after obtaining the animal experiment report and type inspection report in the second half of 2020. The preliminary experimental verification of the percutaneous mitral valve repair system with innovative design structure has been completed. In 2020, formal animal experimental research will be carried out, and type inspection will be carried out at the same time. It is expected that 202 1 will enter the clinical trial.

2. medicine

At present, the company mainly focuses on two aspects in drug research and development. First, it completed the atlas of diabetes drugs; Second, the research and development of high-end generic drugs.

2. 1 Complete the drug map of diabetes, and establish a closed loop of monitoring and drug treatment.

1) insulin glargine: it has been clinically tested in PK/PD;

2) insulin aspart: it has been clinically tested in PK/PD;

3) Dulotide biological analogues: at present, the preclinical research has been completed and the clinical application materials have been submitted;

4) Long-acting GLP- 1 receptor agonist: preclinical research is under way;

5) Continuous blood glucose monitoring: It is a technology that indirectly reflects the blood glucose concentration by monitoring the liquid glucose concentration between subcutaneous tissues, which can provide continuous, comprehensive and reliable all-weather blood glucose information. At present, the project has started preliminary animal experiments and will be sent for inspection soon.

2.2 Research and development of high-end generic drugs

The company already has commonly used drugs for pan-cardiovascular diseases, such as clopidogrel sulfate, tigrello, acarbose, valsartan, amlodipine besylate, atorvastatin, rivastatin and so on. In order to further establish the pharmaceutical ecology of pan-cardiovascular diseases, it is necessary to develop various high-end compound preparations, fill in the shortcomings, and focus on the following products:

1) compound of clopidogrel sulfate and aspirin: drug research stage, pilot production and production verification have been completed, and the stability is being investigated;

2) Losartan potassium hydrochlorothiazide: A large compound (100/25mg) has been developed, and the production site has been inspected, and supplementary information has been submitted in CDE Review; The newly added small-scale supplementary research (50/ 12.5mg) is in trial production;

3) Valsartan Amlodipine: Pharmaceutical research has been completed and clinical research is under way.

(3) Important product pipeline

1) medical equipment

1. 1 cardiovascular series product layout

1) coronary artery series products

2. Peripheral products

3, structural heart disease series products

4. Heart failure management products

5. Heart rhythm management series products

6, ECG physiological series products

Two. IVD series product layout

Third, the layout of surgical products

2) drugs

(1) diabetes drugs

(2) High-end generic drugs and consistency evaluation

The company shall comply with the disclosure requirements of the Shenzhen Stock Exchange GEM Industry Information Disclosure GuidelinesNo. 10-Listed Companies Engaged in Medical Device Business.

By the end of the reporting period, the company and its subsidiaries had 378 registration certificates for Class II and Class III medical devices. The main product information is as follows:

The company is required to comply with the disclosure requirements of the "Shenzhen Stock Exchange GEM Industry Information Disclosure Criteria No.2-Listed Companies Engaged in Pharmaceutical and Biological Products Business".

During the reporting period, the company's core antithrombotic drug clopidogrel bisulfate belongs to six original research drugs, and the company has the invention patent "Clopidogrel bisulfate tablets and its preparation method". It is mainly used to prevent atherosclerotic thrombosis in patients with myocardial infarction (within a few days to 35 days), ischemic stroke (within 7 days to 6 months) or peripheral arterial disease; Patients with acute coronary syndrome-non-ST-segment elevation acute coronary syndrome (including unstable angina pectoris or non-Q-wave myocardial infarction), including patients with stent implantation after percutaneous coronary intervention, should be combined with aspirin; For patients with ST-segment elevation acute coronary syndrome, combined with aspirin, it can be used for thrombolytic therapy.

During the reporting period, atorvastatin calcium, the company's core drug for reducing blood lipid, was divided into six original drugs, mainly used for: 1, hypercholesterolemia: patients with primary hypercholesterolemia, including patients with familial hypercholesterolemia (heterozygous type) or mixed hyperlipidemia, can use this product to treat the increase of total cholesterol, low-density lipoprotein cholesterol, apolipoprotein B and triglyceride when the therapeutic effect of diet therapy and other non-drug treatments is not satisfactory. In patients with homozygous familial hypercholesterolemia, atorvastatin calcium can be combined with other lipid-lowering treatments (such as low-density lipoprotein plasma dialysis) or used alone (when there is no other treatment) to reduce total cholesterol and low-density lipoprotein cholesterol. 2. Coronary heart disease: patients with coronary heart disease or coronary heart disease and other critical diseases (such as diabetes, symptomatic atherosclerotic diseases, etc.). ) complicated with hypercholesterolemia or mixed dyslipidemia, this product is suitable for reducing the risk of nonfatal myocardial infarction, fatal and nonfatal stroke, vascular reconstruction, hospitalization due to congestive heart failure and angina pectoris.

From August, 2065438 to August, 2009, the Human Resources and Social Security Department of the National Health Insurance Bureau newly released the national drug list of basic medical insurance, industrial injury insurance and maternity insurance. There are 83 kinds of drugs listed in the 20 19 national medical insurance catalogue. The details are provided in the table below.

Three. Analysis of core competitiveness 1. Independent research and development of core heavyweight products in the field of cardiovascular medical devices has obvious technological advantages, especially the "interventional non-implantation" technology in the cardiovascular field, which leads the development of China and even the world; The market share of existing products continues to rise steadily, further expanding its leading position with competitors. The company's existing products and international innovative equipment products under research have formed leading technical competitiveness, and the market leading position has been stabilized and further expanded, further strengthening the "moat" from the two dimensions of technology and market. (1) Company, as the industry leader of bioabsorbable stent technology, further increased its leading edge, which not only deepened the technical barrier of the generation, but also broadened the technical moat of the company. (2) The company's new generation of drug balloons and rapamycin coated balloon catheters with lower dosage of paclitaxel will further enhance the safety and effectiveness of treatment and further enlarge and broaden the company's technical moat. (3) The left atrial appendage occluder for preventing and treating stroke caused by atrial fibrillation further enlarges and broadens the technical moat of the company. (4) The product combination of cutting balloon+drug balloon and cutting balloon+bioabsorbable stent has promoted the process of intervention in the non-implantation era and will further enlarge and broaden the company's technical moat. (5) As the industry leader of artificial intelligence ECG technology, the company further increased its leading edge and deepened and broadened the company's technical moat. 2. The management of Lepu realizes that in order to maintain the long-term, stable and sustainable development of the enterprise, it is necessary to strategically and prospectively judge the growth cycle of each business segment of the enterprise, establish the growth momentum of innovative products in each segment in time, and build new business segments in cardiovascular and related fields to hedge the future growth cycle of its business segments. After several years of practice, the company's strategy and tactics are very effective. After centralized procurement, the growth logic of the company has not been changed, which shows the importance and effectiveness of this strategy. Through unremitting innovative research and development of major devices, the first generation of pre-research, clinical generation and registered sales generation, the company will keep pace with the times, and arrange a series of major innovative devices in the cardiovascular field as new core growth drivers in the coming year according to the company's absorbable stent design and material manufacturing platform technology, valve design, completely recyclable repositioning delivery platform technology, occluder design and precision manufacturing platform technology. It is related to five platforms, such as drug balloon precision manufacturing and drug coating platform technology, and AI-ECG artificial intelligence ECG diagnosis and monitoring platform technology, and the related non-cardiovascular innovation business is limited, which will continue to ensure the stable growth of future annual performance. 3. Under the centralized purchasing policy of national medical insurance drugs, the growth of hospitals and retail stores in grass-roots cities and counties in the future will be the main battlefield for the growth of medical industry in China. Grassroots hospitals and physical pharmacies who have greater competitive advantages will take the lead in future growth; Lepu Medical is the first equipment enterprise to go to a city or county hospital. At present, there are 90 cooperative cardiovascular intervention medical centers in cities and counties/KLOC-0. In the future, the company will vigorously promote the project process of grassroots intervention in medical centers; The pilot and popularization of national DRGs' payment by disease diagnosis will lead to the gradual transfer of hospital drug sales, especially the sales of oral drugs for chronic diseases, from hospitals to retail stores. The competitive advantage of enterprises in retail stores can ensure the future growth of the company. Lepu Medical is also the first professional prescription drug manufacturer to establish a separate OTC marketing team, which mainly cultivates the drug retail market. The implementation and promotion of the centralized drug procurement policy of the National Medical Insurance Bureau further makes the high-end generic drugs transition to generic drugs quickly, and accelerates the demand for such drugs by primary medical institutions and ordinary patients. In the next 2-3 years, the drug consumption in the primary market will continue to increase substantially, which will bring new market opportunities for the company's drug marketing. The company's first-Mover advantage in cardiovascular disease treatment and OTC terminal sales in primary hospitals has established a strong moat for the company in the primary market. 4. Drugs on the market and under study cover the whole field of cardiovascular diseases. Under the background of medical insurance cost control, the company's various types and varieties of cardiovascular drugs are more prominent and more sustainable than a single variety of enterprises. With the successful national centralized bidding of the company's heavy drugs, clopidogrel and atorvastatin calcium, the company has declared and is developing a variety of cardiovascular drug pipelines with antithrombotic, hypolipidemic, hypotensive, hypoglycemic and anti-heart failure effects. The above two advantages have brought new development opportunities for the company's pharmaceutical business, further ensuring the stable and sustained growth of the pharmaceutical business. Moreover, the company's pharmaceutical pipeline has obvious synergistic effect, obvious comprehensive competitive advantage and increasingly rich products. The industrial chain synergy of the integration of various preparations and raw materials, testing and drug use will gradually emerge under the new policy background, establishing a new market moat for the company.