Author: Asia PEVC

Entered into the Second Phase of Strategical Development to Create GOME’s Own Integrated Online and Offline Retail Ecosystem

GOME Retail Holdings Limited (493.HK) today announced its unaudited interim results for the six months period ended 30 June 2020 (the “Reporting Period”).

“Home Living” Strategy Speeds Up at Its All-out Efforts and Successfully Completed the First Phase of Strategical Development

In the first half of 2020, the Group implemented steadily the strategy of developing into an Internet-based enterprise and strived to become an integrated solution, service solution and supply chain provider. During the Reporting Period, GOME made full use of the innovative platform of “Community + GOME APP” to capture chances brought by the rapid transformation of consumption pattern in “Stay Home Economy” and promote significantly the cash conversion rate of social media based online channels. As a result, the GMV of “Community + GOME APP” with GOME Retails’ genes grew by more than 70% year-on-year (“yoy”) and daily GMV occasionally exceeded RMB 1 billion. During the Reporting period, the number of online communities of the Group grew by over 40% yoy, representing a 65% increase yoy.

Explore Continuously New Retail Model and Create GOME’s New Growth Engine of Quality Live Streaming

During the Reporting Period, GOME has developed proactively its community marketing and leveraged fully GOME’s advantages on supply chain, logistics and community social interaction. As a result, the cash conversion rate of GOME online community reached 30%, significantly higher than the industry average, increasing by more than 150% yoy. Additionally, GOME capitalized on its resources and capabilities, creating a quality live streaming model characterized by “Knowledge-based contents + Premium IP with huge traffic + Immersive scenario”. In the first half of 2020, the Group already hosted over 2,000 live streaming events with various themes and scale, reaching over 100 million people. During the Reporting Period, in four of the super live streaming events, the Group’s sales revenue reached RMB2,500 million in total. In the second half of this year, the Group will continue to cooperate with top media platforms – CCTV News, and launch steadily live streaming events across 31 provinces nationwide, showcasing GOME’s “New Growth Engine” and its localized retail model to consumer across the country.

Open Supply Chain, Introduced Two Strategic Partners to Enjoy Mutual Benefits through Collaboration

The Group entered into strategic cooperation agreements with JD.com and Pinduoduo.com in the first half of the year. As of now, all parties have deployed in-depth cooperation at different areas. During the Reporting Period, the GMV of the Group generated from JD.com, Pinduoduo.com and other e-commerce platforms grew more than 100 times yoy. In August 2020, GOME and JD.com have strengthened their cooperation by signing up the joint procurement with an aggregate amount of RMB30 billion. This was ranked the largest year to date procurement in the home appliance and 3C industry in China. At the same time, GOME has been offered access to more than 20,000 non-home appliances SKU from JD.com. This line-up is expected to facilitate the sales of GOME’s full range of products. GOME will utilize the in-depth cooperation with JD.com and Pinduoduo.com to share edge resources from each other, develop continuously new retail model with online and offline integration, as well as realize greater synergy effects.

Coped Actively with the Impact of Pandemic and Cash-on-hand Maintained at a Healthy Level

The Group’s large home appliance business, which was affected seriously by COVID-19, recovered in the second quarter this year as reflected by a quarter-on-quarter increase of 103% in its sales revenue. On a positive note, sales revenue generated from large home appliance business remained resilient in June 2020 as compared with the corresponding period last year. In addition, overall gross profit margin also showed a trend of month-on-month recovery since the second quarter this year and rebounded to the pre-pandemic level of 16%. Moreover, the operating cost was reduced by 26% yoy. With regard to financial strength, the Group maintained sufficient capital after the full repayment of US$500 million overseas bonds during the Reporting Period. The Group’s cash and cash equivalents amounted to approximately RMB11.4 billion as at June-end, illustrating a healthy financial position.

Entered into the Second Strategic Phase of Open Sharing and Constructed GOME’s Own Integrated Online and Offline Retail Ecosystem

In the first half of this year, the Group’s business was impacted by the novel coronavirus outbreak. However, the Group withstood this stress test and successfully achieved the goal of the first phase of strategic development. Going forward, the Group will ride on its 33 years of industry experience and break new grounds in a bid to construct an integrated online and offline retail ecosystem featuring Social Interaction + Commerce + Sharing. GOME is the only enterprise in China with online and offline dual platform focused on “Social Interaction + Commerce + Sharing” covering a wide of products. With regard to offline platform, the Group has established a huge team of approximately 100,000 staffs, spanning across over 2,800 stores in the country. Leveraging the physical store as the center and the community in a grid network, the Group provides its services to users within three to five kilometers. Besides, leveraging the staff as the link, the Group realizes the face to face social communication with users. Turning to online platform, the Group owns e-commerce channels which supports the localized operational development, social sharing platforms, extensive communities and widespread users. In the past, by taking advantages of these resources, the Group maintained its leading position in vertical integrated home appliances sector. For future growth, the Group will be more open-minded to enter into the second phase of strategic development with a goal of achieving win-win synergy.

Focus on Local Retail and Create a New GOME Oriented by User, Platform and Technology

Capitalizing on the solid foundation of its current home appliances sales business, the Group plans to increase the business volume mainly through platforms, servicing external enterprises and the whole society. On the online platform, the Group will support the development of enterprises by empowering traffic, SaaS and intelligent management and decision system. Regarding the empowerment of traffic, the Group will share with the third parties its accumulated high-quality traffic with high conversion rate to facilitate their business development. With regard to the empowerment of SaaS, the Group will utilize its local retail operation and adopt the mode “one store one webpage” at the store end, “one community one webpage” at the community end, and “one people one webpage” at the user end to achieve coordinated development, significantly reducing their operation costs and helping them to diverse online traffic to offline. In the meantime, by offering digitalized artificial intelligence management tools, the Group will help them to enhance enterprise decision making and operation efficiency. In tandem with the ever-changing consumption pattern, online transaction has become a pronounced development trend. Therefore, e-commerce operation will emerge as the triggering point and remote control of industry development. The two core elements of offline platform were the showcase of quality products and life services. The Group will leverage fully the competitive advantages of its store network and provide strategic support selectively to those online enterprises which do not have offline outlets to showcase their quality products and associated scenarios. Moreover, the Group will strive to improve the offline supply chain operational efficiency of these enterprises by over 40%. Meanwhile, underpinned by various offline scenarios, the Group intends to bring in new operation model and content of home services. With the extension of home scenarios, namely living room, dining room, kitchen and showroom, and the theme of entertainment-styled marketing, the Group will provide users with various services related to catering, entertainment, shopping, leisure, etc., in the offline platform. Moreover, as a social interaction venue, the offline platform also provides users with quality time in social communication, meeting, relaxing and family gathering, thereby satisfying different demands from members of various ages and classes and of different families within the community. With its professional service team, GOME’s offline stores are able to provide comprehensive scenarios of In-store and In-home services at different time throughout the day. Leveraging the marketing of gridded community backed by life services and selected quality product showcases will render users in the community to become the loyalty member of GOME’s platforms, which serve users’ daily consumption needs and become cash conversion drivers.

Construct Diversified Vertical Supply Chain System through Stringent Selection

GOME will continue to strengthen its leading position in home appliances sector by deploying high efficiency and low-cost operation models. Moreover, the Group will continue to build up the supply chain system of home appliances with the advantages of rich product mix and bargaining prices. This would spearhead the Group to raise its market shares, regain its original position in the market and realize greater profitability in the shortest possible time. The Group strives to increase the number of offline stores by 20% next year or the first half of 2022 and realize the promotion of sales scale and profitability. In addition, the Group plans to share with the third parties its supply chain edges. This would be achieved by opening its supply chain system to the strategic partners and franchises in low tier markets. Leveraging the expansion drive of supply chain cooperation between the Company and strategic partners with same open-minded approach, this would enable all parties to consolidate their resources and create more opportunities through multiple channel sales, thus generating win-win situations for all parties. In third-tier to sixth-tier cities, the Group will continue to employ its asset-light business model to speed up the franchise expansion and explore profoundly the market potentials.

Meanwhile, the Group plans to expand its product mix to non-home appliance products through stringent selection. The Group currently completed the self-operated vertical sales trial of fresh foods, hotpot foods and home decoration services in its full industry chain. The Group has fine-tuned the operational process and improved the business model during these trials. The management expected to beef up efforts to promote such businesses in the future. Stringent selection use strict selection standard to further develop the integration advantages of upstream supply chain, expanding the customized category and scale. By providing the best quality goods and services, GOME can form a deep traffic interactive platform, transforming high-quality private sector traffic into public sector traffic of the platform, and improve the conversion rate of the platform.

All business segments in the “Dual Platforms” ecosystem are expected to benefit from mutual complement, connection and interaction. Both users and retailers would be served by rapid developing models such as panic-buying in social media, bonus sharing, entertainment-styled marketing and one store one webpage strategy. This in turn would bring about cash conversion. All platforms would share information and all retailers in the platforms would converge their traffic. Thus, the private sector traffic would precipitate the inflow of public sector traffic, thereby creating a virtuous cycle of expansion.

Mr. Wang Junzhou, Chief Executive Officer of GOME concludes: “In the first half of 2020, the Group has continued to uphold the spirit of persevering amidst adversities and overcame the difficulties and challenges from the pandemic. Meanwhile, the Group has further enhanced its capabilities on business operation and the scope of services in virtue of its advantages gained over the years. In the future, the Group will consolidate and optimize its existing resources in order to exert the ‘multiplier effect’ and gain more resources, enabling the ‘leaping’ transformation from the self-operated retailer to become GOME ecosystem combining online and offline platform. GOME is the only domestic online and offline enterprise with full category of online and offline platforms, which is focused on ‘Social Interaction + Commerce + Sharing’. In the past, we have been leading the industry in the vertical field of household appliances around price advantage, service standard and brand reputation. Now, we are going to enter the second stage of strategy faster and more openly, with full confidence and expectation: focus on local retail, and create a new GOME oriented by user, platform and technology”.

Expand Operating Management Business to East China Region
Hydrogen Production Facility Commences Operation

China Risun Group Limited (“China Risun”, or the “Group”, stock code: 1907), the global leading integrated coke, coking chemical and refined chemical producer and supplier in China, has announced its interim results for the six months ended 30 June 2020 (“1H2020” or “the reporting period”).

Affected by the outbreak of COVID-19 and the decrease in international oil price, during the reporting period, the Group’s revenue recorded at RMB8,133.1 million. Gross profit amounted to RMB1,157.2 million and gross profit margin increased slightly to 14.2%. Profit attributable to owner of the Company was approximately RMB351.0 million. Basic earnings per share was RMB8.58 cents. Cash and cash equivalents amounted to RMB929.4 million.

To reward shareholders for their continuous support, the Board determined an interim dividend of RMB2.58 cents per share, with total interim dividend amount of approximately HK$119.4 million.

Leverage existing coal chemicals production capacity to tap into hydrogen market at lower production cost

The Group believes that hydrogen is one of the major strategic directions for the PRC’s energy transformation and the Group has huge advantage in refining the coking coal which contains hydrogen chemical element. By making use of its existing coal chemicals production capacity, the Group plans to focus on the pure hydrogen production and utilisation where the production bases are located at. During the reporting period, the Group co-operated with the People’s Government of Dingzhou City in relation to the production, storage and transportation of hydrogen and the construction and operation of hydrogen refueling stations. Such pure hydrogen production facility commenced to operation in July 2020.

In addition, we actively optimized the product portfolio of the refined chemical business and focused on products with positive market expectations. In Tangshan production base, the new styrene production project, which possesses annual production of 300,000 tons and was under construction since 2019, will commence production by the end of 2020.

Further strengthening leading position via JV and operation management services

By leveraging its vertically integrated production chain and extensive experience of more than 25 years in the coal chemical industry, the Group will continue to tap into the downstream refined chemicals markets, aiming of developing more sustainable and striving for the best benefits for all of its stakeholders.

During the Reporting Period, the Group obtained all necessary approvals from the People’s Governments in Liaoning Province and Lingyuan City after the establishment of a joint venture with Lingyuan Iron & Steel Co., Ltd. in December 2019 and subsequently consolidated into the Group after establishment. It is expected that the construction will commence in the second half of 2020.

Furthermore, the Group entered into one new operating management agreement with an independent third party in Jiangxi Province with annual coke production capacity of 1,300,000 tons. The project jn Jiangxi Province hallmarked a new phase that for the first time the Group has expanded its operation and management business footprint into the East China region. It also laid a solid foundation for the Group to further explore the local market. Meanwhile, several new operating management projects are proceeded steadily. Regarding to the new trading company established in Japan, the Group started to import coke from Japanese coke producers, which is remarkable in its history. The Group aimed to expand its trading business from merely export to import & export in future to increase its influence in international trading market.

Looking forward, the Group will continue increasing its market share especially through both light and heavy asset approaches and further expand coke production business. For the refined chemicals, the Group is examining the whole refined chemicals production chain to further develop high potential products e.g. caprolactam to enhance profitability. With an aim of strengthening its leading position as a global coke and refined chemicals producer and supplier, the Group will make use of establishment of new subsidiaries/joint ventures, acquisition of existing coke and refined chemicals producers together with provision of operation management services to third parties in different provinces of China.

About China Risun Group Limited
China Risun Group Limited is the world’s largest independent producer and supplier of coke by volume in 2019, according to Frost & Sullivan. The Group is an integrated coke, coking chemicals and refined chemicals producer and supplier in China and holds leading positions in a number of refined chemicals sectors both in China and globally. The vertically-integrated business model together with more than 25 years of experience in the coal chemicals industry production chain has enabled the Group to further tap the downstream refined chemicals markets and hence diversify its income sources and create greater value.

China Risun has been listed on the main board of the Hong Kong Stock Exchange since March 2019 and is now included in various index series, including Hang Seng Composite Index, Hang Seng Stock Connect Hong Kong Index, Hang Seng Stock Connect Hong Kong MidCap & SmallCap Index, Hang Seng Stock Connect Hong Kong SmallCap Index, Hang Seng SCHK Mainland China Companies Index, and Hang Seng SCHK ex-AH Companies Index. For more details, please visit http://www.risun.com/En/

Outstanding Performance in 1H2020
Revenues: +24% YoY;
Profit Attributable to Equity Holders of the Company (Non-IFRS1): +669% YoY

Shenzhen Hepalink Pharmaceutical Co., Ltd. (Stock Code: 9989.HK; “Hepalink” or the “Group”) today announced the unaudited consolidated results for the first half year of 2020 (“1H2020”) ended June 30, 2020 (the “Reporting Period”).

Financial Highlights
For the six months ended 30 June 2020, the Group recorded:
– Total revenue was RMB2,635.6 million, an increase of 24.3% over the first half of 2019 (“YoY”);
– Gross profit was RMB1,085.8 million, an increase of 47.9% YoY;
– Gross margin amounted to 41.2%, an increase of 6.6 percentage point YoY;
– On a non-IFRS basis, net profit attributable to equity holders of the Group (net of non-recurring profit or loss) was RMB505 million, increased by 668.8%;
– The adjusted net profit attributable to equity holders of the Group after deduction of non-recurring profit or loss (excluding the listing expenses after tax of RMB32 million) was approximately RMB 532 million.

In the first half of 2020, the sudden outbreak of COVID-19 has impacted many industries in varying degree. During the Reporting Period, the Group maintained sound revenue growth and profitability. For the six months ended June 30, 2020, the Group’s total revenue amounted to RMB2,635.6 million, representing a year-on-year increase of 24.3%, while the gross profit of the Group increased 47.9% to RMB1,085.8 million; and recorded net profit attributable to equity holders of the Group (net of non-recurring profit or loss) of RMB505 million, representing a year-on-year increase of 668.8%.

Outstanding Performance of Our Businesses
The revenue from finished dose pharmaceutical products business increased by 37.1% to RMB631.3 million for the first half of 2020 on a year-on-year basis and accounted for 24.0% of the Group’s total sales revenue. Gross profit increased by 31.1% to RMB272.8 million, with a gross margin of 43.2%. During the Reporting Period, as the major market of enoxaparin finished dose, Europe was affected by the unexpected COVID-19 epidemic, and the Group encountered varying degrees of challenges. The Group proactively strengthened its marketing efforts by further promoting hospital sales channels in European countries and building our pharmacy channels with a spillover effects from hospital to pharmacy. In June 2020, the Group’s enoxaparin finished doses obtained the approval for marketing in Switzerland, which marked as an important step for the Group in EU market. The access to the Swiss market is a recognition of our excellence in the quality of products, and further accelerate the Group to achieve full coverage of European market.

The sale of heparin API business, which accounted for 55.4% of the Group’s total sales revenue, amounted to approximately RMB 1,459.1 million, representing a year-on-year increase of 30%. The gross profit increased by 67.9% to RMB656.3 million, with a gross margin increased to 45% from 34.7% compared to the same period in 2019. The API business achieved outstanding growth and profit performance in the first half of 2020, which was primarily driven by the effectiveness of new pricing scheme formulated by the Group and its customers. This enabled the effective transmission of upstream cost fluctuations, and the gross profit level of the heparin API business improved significantly as compared to the same period of last year.

The CDMO business increased by 11% to RMB 386.8 million, and accounted for 14.7% of the Group’s total sales revenue. The gross profit increased by 49% to RMB123.2 million, with the gross margin increased by 8.1 percentage point to 31.9% compared to the same period in 2019. The simultaneous enhancement of the Group’s production capacity in the microbial fermentation and mammalian cell culture business lines, the further enhancement of its operational capabilities, as well as the successful cooperation with multinational companies and the maintenance of revenue growth contributed to the development of CDMO business. The gross profit margin of CDMO business was improved because of the increased utilization of scientific research and development.

Development of New Drugs is Progressing Steadily
During the Reporting Period, the Group anchored its efforts on research and development of innovative drugs. The Group made remarkable progress in the research and development of its two new drugs, Oregovomab and RVX-208. Oregovomab, the world’s first immunotherapy drug, can be used to treat advanced ovarian cancer; the PFS of the phase I clinical trial group is 41.8 months, which was nearly 3.5 times in compared to the control group (12.2 months). The Group is making strenuous preparations for the III phase of the clinical trial, and it is expected that Oregovomab will become the most effective first-line treatment for advanced ovarian cancer after the completion of the phase III. Besides, RVX-208, which is intended to reduce major adverse cardiovascular events among high-risk cardiovascular disease patients with type 2 diabetes mellitus, was granted Breakthrough Therapy Designation by the FDA in February 2020. Its phase III clinical protocol was reapproved by the FDA in June 2020, indicating that the new drug pipeline of the Group was recognized and supported by the regulatory authorities.

Mr. Li Li, the Chairman of the Board of Shenzhen Hepalink Pharmaceutical Co., Ltd. stated, “The outbreak of COVID-19 is expected to have a significant impact on every industry this year. We believe it is confronted with the opportunities and challenges. We achieved high growth from pharmaceutical products, development of innovative drugs and CDMO business, which were primarily driven by our long-term competitiveness. The COVID-19 pandemic poses significant risks to public health, many countries start to implement policies on reservation of medical resources and equipment, which is expected to drive the demand in the medium to long term. In light of these uncertainties, we will continue to closely monitor the market and utilize our advantage of global operating model in order to seize the market opportunities and strengthen cooperation with customers.” With regard to the plans for the second half of 2020, he added, “We will remain flexible and adjust our strategies from time to time to ensure that the Group can deliver steady growth. At the same time, the Group will continue to execute its strategies and plans to reach our annual targets and to achieve our goal of becoming a leading international pharmaceutical enterprise in the future.”

About Shenzhen Hepalink Pharmaceutical Co., Ltd.
Shenzhen Hepalink Pharmaceutical Co., Ltd. is a global pharmaceutical company with business spanning the manufacture and sale of pharmaceutical products, development of innovative drugs and CDMO services. The Company’s sales of pharmaceutical products consists of finished does pharmaceutical products which include enoxaparin sodium injection; active pharmaceutical ingredient (“API”) products including heparin sodium API and enoxaparin sodium API; and other products mainly including pancreatin API. The Company has obtained exclusive development and commercial rights in Greater China for clinical stage innovative drug candidates which are being developed for the treatment of disease with an immune system axis. The Company are also developing a self-discovered proprietary drug candidate currently at preclinical stage. The Company operate a CDMO business providing R&D, manufacturing, quality management and program management services, through the Company’s wholly-owned subsidiaries Cytovance Biologics, Inc. (the “Cytovance”), which specializes in the development and manufacture of recombinant pharmaceutical products and critical non-viral vectors and intermediates for gene therapy, and SPL Acquisition Corp. (the “SPL”), which provides services in the development and manufacture of naturally derived pharmaceutical products.