On January 13, 2022, Xintian Pharmaceutical (002873) issued an announcement stating: Huajin Securities Wei Yun, Haitong Securities Zheng Qin Wang, Zheng Yang, Dongxing Securities, Hu Boxin, Debon Securities, Chen Tielin, Chen Jin, GFa Securities, Luo Jiarong, Huatianfu Fund Zhang Wei, China Southern Fund Wang Zhengjiao, Guangfa Fund Duan Tao, Liang Dongxu, Wu Jiashuan, Industrial Fund Ying Jinshuai, Huabao Fund Qi Zhen, Wei Yangfan, Zhang Qiao Zhang, Tongyuan invests in Gu Xi Yuanjian, Chaos invests in Zhang Peipei, and CaiTong Asset Management Feng Xueyunyi Xiaojin Wang Xinyuan and Dongfanghong Asset Management Xie Jie visited our company on January 12, 2022.

Q: How can the company increase product sales in terms of prescription drug sales?

Answer: In terms of prescription drug sales, the company will continue to increase product sales from the following aspects: first, increase the coverage of various products in hospitals, districts and county terminals; second, continue to increase evidence-based medical research efforts to promote a wider range of products into authoritative diagnosis and treatment guidelines; third, increase professional academic promotion efforts to strengthen doctors' and patients' awareness and recognition of the company's products; fourth, continue to improve patient compliance and pedicure usage; fifth, continue to dig deeper into product potential and strengthen secondary research and development of existing varieties. Furthermore, the company has previously completed the institutional reform and performance mechanism incentive plan for the overall marketing team, including marketing system optimization, marketing team capacity improvement, marketing strategy optimization, and implementation of comprehensive management measures such as this round of equity incentives skewing towards the marketing system, with obvious results.

Q: How can the company increase product sales in terms of OTC sales?

A: The company established the OTC division in 2018. Currently, the company's products cover more than 80,000 pharmacies. The company will continue to adhere to the sales capacity of “driving the OTC channel market with clinical efficacy”; at the same time, it will continue to improve OTC sales from the following aspects: first, continue to increase single-store output, strengthen category sales, increase the proportion of multi-product stores, and launch new specifications and treatment packages in due course; second, continue to increase product coverage in pharmacy chains; third, continue to strengthen pharmaceutical brand building and continue to increase the brand influence of products among consumers to build and establish a strong “pharmaceutical brand”. The company began to lay out and expand the OTC market two years ago and achieved good expected results. In the future, the company will also further increase OTC market investment and brand building. Through the accumulation of clinical efficacy in the hospital market over the years and good market feedback on products, the company will continue to increase its share of the OTC market while ensuring the steady growth of the hospital market.

Q: Are the company's products being collected?

A: The company's main products are exclusive varieties. Existing products are currently not affected by relevant policies. The company will also follow up on relevant policies in real time, conduct a comprehensive assessment of sales volume and prices, and make appropriate responses. In addition, the company also calculates and analyzes costs and expenses for all products every year, and continuously optimizes cost and cost control. The impact of drug collection on the company is expected to be limited.

Q: What is the company's investment in R&D expenses?

A: The company's R&D investment has basically stabilized between 3% and 4% in recent years. From the perspective of overall planning, the company's R&D investment has continued to increase in recent years.

Q: What is the company's R&D status and progress?

Answer: The status of the products/projects completed and being developed by the company is as follows: (1) Three varieties of Longqin Pelvic Relief Granules, Shuyu Tong Granules, and Kuge Jieyin Capsules have completed phase III clinical research, and will submit marketing license applications one after another in line with the actual situation; (2) Research on classic traditional Chinese medicine recipes involving gynecology, pediatrics, geriatrics, and respiratory medicine is being carried out. It is planned to submit marketing license applications one after another after the relevant departments release key information on the corresponding formulations; (3) Continue to carry out the company's key varieties of Kuntai capsules, Ningtai capsules, and bitter ginseng gel, and xanthan gel Clinical medical research on herbal oral liquid, related products Conduct secondary development.

Q: Small molecule chemical project in which the company is a shareholder - Shanghai Huilun Biotech's business situation?

A: Since the beginning of 2020, the company has implemented strategic industrial investment in Huilun Biotech. The current investment amount is 290 million yuan. According to information, the operation and development of the Shanghai Huilun Biopharmaceutical Project is improving steadily. By the end of 2021, Huilun Biotech has been approved for production registration of more than 10 products, including exclusive, first imitations, and a large variety of products. The main varieties have achieved market sales on a corresponding scale, and the future market is promising.

Xintian Pharmaceutical's main business: research and development, production and sales of proprietary Chinese medicine products for urological diseases, gynecology, and other diseases with complex causes, to provide patients with safe and effective products.

Xintian Pharmaceutical's 2021 three-quarter report shows that the company's main revenue was 745 million yuan, up 37.54% year on year; net profit was 889.335 million yuan, up 45.66% year on year; non-net profit was 86.1777 million yuan, up 47.73% year on year; of these, in the third quarter of 2021, the company's main revenue for the single quarter was 291 million yuan, up 21.86% year on year; net profit for the single quarter was 42.0961 million yuan, up 17.42% year on year; non-net profit was 39.5869 million yuan, up 16.91% year on year; debt ratio 42.53%, financial expenses of 1,15824 million yuan, gross profit margin 79.38%.

The stock has been rated by 1 agency in the last 90 days, with 1 buying rating; according to the Securities Star valuation analysis tool, Xintian Pharmaceutical (002873) has a rating of 3 stars for a good company, a good price rating of 2 stars, and an overall valuation rating of 2.5 stars. (Rating range: 1 to 5 stars, maximum 5 stars)