Huaxi Biotechnology Co., Ltd. (stock code: 688363) is an enterprise focusing on biotechnology and biomaterials, committed to continuously bringing healthy, beautiful and happy life experiences to humans. The company has a leading position in the field of synthetic biology. Its products cover various fields such as pharmaceutical-grade raw materials, cosmetic-grade raw materials, and food-grade raw materials. In 2023, in the face of a recovery in the national economy and a complex external environment, Huaxi Biotech will take the initiative to carry out management changes to push the company from rapid development to a new stage of high-quality development.

At the end of 2023, Huaxi Biotech's total assets were 8.470 billion yuan, a year-on-year decrease of 2.44%. Among them, the total assets at the end of the period were 8.470 billion yuan, and the beginning of the period was 8.682 billion yuan. Total liabilities amounted to $1,487 billion, down 25.61% year-on-year, to $1,999 billion at the beginning of the period. The goodwill balance at the end of the period was $251 million, a slight increase from $247 million at the beginning of the period. In terms of net assets, the balance at the end of the period was $6.944 billion, up 4.68% from $6.634 billion at the beginning of the period. The balance ratio fell from 23.02% in 2022 to 17.55% in 2023, showing that the company has achieved some results in reducing debt.

In terms of profit, Huaxi Biotech's revenue in 2023 was 6.076 billion yuan, a year-on-year decrease of 4.45%. Net profit attributable to shareholders of listed companies was 593 million yuan, down 38.97% year on year; net profit after deducting non-recurring profit and loss was 490 million yuan, down 42.44% year on year. Gross margin fell to 73.32% from 76.99% last year, and net margin fell from 15.12% to 9.59%. Return on net assets (ROE) declined from 15.52% to 8.53%. Operating costs were 1,621 billion yuan, up 10.78% year on year, resulting in a 3.67 percent drop in comprehensive gross margin. Among the four major sectors of pharmaceutical manufacturing, raw materials, medical terminal products, and functional skin care products, the operating income of medical terminal products increased the most, with a year-on-year increase of 58.95%.

In terms of cash flow, Huaxi Biotech's net cash flow from operating activities in 2023 was 699 million yuan, an increase of 10.15% over the previous year. Cash inflows from operating activities were $6.820 billion, down 3.36% year on year; cash outflow subtotal was $6.121 billion, down 4.70% year on year. Net cash flow from investing activities was -613 million yuan, and losses decreased. Net cash flow from fund-raising activities was -102 million yuan, a significant year-on-year decrease. Overall, the company's performance in terms of cash flow from operating activities is relatively steady, but further optimization is needed in terms of investment and fund-raising activities.

In summary, Huaxi Biotech faced complex external environment and internal management challenges in 2023, and achieved certain results through active management changes and strategic adjustments. Despite the decline in operating income and net profit, the company excelled in reducing liabilities and improving cash flow management. In the future, Huaxi Biotech will continue to focus on synthetic biology, promote high-quality development, and further consolidate its leading position in biotechnology and biomaterials.