On the evening of October 27, Tonghua Dongbao Pharmaceutical Co., Ltd. (stock code: 600867, hereinafter referred to as "Tonghua Dongbao" or the "Company") released its quarterly report for Q3 2021. In the first three quarters of 2021, Tonghua Dongbao recorded operating revenue of RMB 2.455 billion, up 12.33% YoY, a net profit attributable to the parent company of RMB 1.068 billion, up 41.28% YoY, a net profit excluding non-recurring gains and losses attributable to the parent company of RMB 901 million, up 19.88% YoY. The basic earnings per share (EPS) in Q3 hit RMB 0.19, up 83.72% YoY.

Stable revenue growth and higher profitability

Revenue growth mainly comes from the Company's insulin products. Among them, sales revenue from its human insulin drug substances (DS) and injections was steadily growing, with a YoY increase of 10.55% in Q3, and insulin glargine DS and injections contributed sales revenue of more than RMB 120 million in Q3. Thanks to its expanded production scale, improved operational efficiency, and optimized product mix, the Company achieved a consolidated gross profit margin of 83.09%, up 4.49 percentage points YoY, and a net profit margin of 49.69%, up 19.77 percentage points YoY.

Multiple new drugs approved for sale and accelerated R&D pipeline

The Company has doubled down on R&D investment. The total R&D spending in the first three quarters increased by 56.88% YoY, and a number of new products are ready for market. Among them, Sitagliptin Phosphate, the Company's first oral hypoglycemic drug, was approved for sale in September, and Insulin Aspart Injection and Sitagliptin Metformin Tablets (II) were approved for registration in October. The above medicines further enrich the Company's product portfolios, exhibiting a good synergy with the Company's existing diabetes products. The R&D of other products is accelerated. The NDA applications for Insulin Aspart 30 and 50 Injections were accepted in July, the ultra-rapid-acting insulin lispro injection (BC Lispro) was approved for parallel phase III and phase I clinical trials in October, and the clinical application of URAT1 inhibitor, a novel gout (hyperuricemia) drug, was accepted in the same month. The Company's intensified efforts in novel endocrine drug development have greatly enhanced its industrial position and overall competitiveness.

Protecting shareholders' rights and interests and fulfilling social responsibility

Tonghua Dongbao has made active efforts to improve its corporate image, in order to enhance investor confidence and improve shareholder returns. In July, the Board of Directors of the Company approved a plan to buy back shares worth up to RMB 360 million and cancel them to return surplus cash to shareholders. This is the Company's second stock buyback this year. This move further demonstrates the management's recognition of the strategic transformation, confidence in the Company's future development, and determination to strengthen the return to shareholders and safeguard their interests.

Wide recognition and numerous awards

During the reporting period, the Company has won recognition from all walks of life and garnered a number of honors and awards. It is listed as one of the Top 20 Pharmaceutical Companies in China released by MENET, the Top 50 Companies with Strongest Biopharma R&D Capability in China for 2021 released by the Organizing Committee of Smart China Expo, and the Top 100 Most Valuable Mainboard-listed Companies released by Securities Times, and has been granted the 2021 China ESG Award for Best Environment Case by Cailianshe (CLS).

Tonghua Dongbao will keep improving its governance structure and expanding its product portfolios. While consolidating and expanding its competitive advantages in insulin products, the Company, guided by the philosophy of "Persist in innovation, build a global brand", will continue to focus on the R&D of cutting-edge and key technology for treating diabetes and other endocrine diseases and promote innovation to achieve its vision of becoming an explorer and leader in the R&D of novel endocrine medicines as soon as possible.