Xinhua News Agency, Beijing, August 20th Comprehensive Xinhua News Agency reporters abroad reported that the 6th BRICS Media High-end Forum was held in Johannesburg, South Africa on the 19th. About 200 representatives from about 100 media, think tanks and international organizations from nearly 30 BRICS and African countries held discussions on the theme of "BRICS and Africa: Strengthening Media Dialogue and Sharing a Fair Future", and gathered strong synergy for building high-quality BRICS partnerships and developing and strengthening the BRICS mechanism.

　　In an interview with Xinhua News Agency, a number of media people attending the forum said that in the face of the profound changes in the current international situation, the media in developing countries, including BRICS countries, should deepen cooperation and jointly shoulder the heavy responsibility of giving voice to emerging market countries and developing countries and promoting the construction of a just and reasonable international order.

　　Brian Sokutu, a senior reporter of South Africa’s Citizen, said that the forum was held at the right time. Sokutu said that in the fields of global governance, economy and finance, the voices of developing countries need to be respected and listened to. "Through this forum, we want to show the world the broad vision and unique views of media practitioners in developing countries, including BRICS countries."

　　Mahasha Lampedi, editor-in-chief of South Africa’s Africa Times, pointed out that there is an increasingly obvious tendency for western media to be driven by ideology rather than objective analysis. In this context, the media in developing countries, including the BRICS countries, should shoulder greater responsibilities, voice emerging market countries and developing countries, and make contributions to the construction of a just and rational international order.

　　According to Cavens Adehill, a Kenyan expert on international issues, the media in developing countries have played an important role in making a variety of voices and cracking the hegemonic discourse that the United States and other western countries have been pushing for decades. The media in developing countries should tell their own development stories well and resist the false narrative in the reports of western media. He believes that the media can contribute to the establishment of a positive understanding of cooperation among developing countries, and become an advocate, public opinion guide and policy discussion influencer of relevant cooperation, so as to better share the experiences and cases of cooperation among relevant countries. In addition, the media also plays an important role in promoting cultural exchanges and mutual understanding between BRICS countries and other developing countries.

　　Elio Doyle, president of Brazil Telecom, gave a positive evaluation of the forum. He said that the media in developing countries can play an active role by showing the world the pluralistic ideas that are difficult for western media to present. "If our media can continue to deepen understanding and cooperation, then the media from developing countries will make greater voices, and we will make more contributions to promoting the construction of a more open and inclusive international order."

　　Ranna Tolstokova, director of the Russian BRICS TV station, pointed out that the media in BRICS countries can build a bridge of cultural exchanges and promote mutual understanding among people of all countries by reporting on the culture and history of various countries. "I look forward to more professional forums for media people like the BRICS Media High-end Forum in the future."

　　People’s Daily Online, Beijing, April 24 (Fang Jinglun, Zhu Jiang) Recently, the 25th meeting of the Central Committee for Comprehensively Deepening Reform (hereinafter referred to as the meeting) deliberated and adopted the Guiding Opinions on Strengthening the Construction of Digital Government.

　　The meeting pointed out that strengthening the construction of digital government is an important measure to innovate the concept and mode of government governance, which is of great significance to accelerating the transformation of government functions and building a government ruled by law, a clean government and a service-oriented government.

　　"Digital government is an important support for promoting the modernization of the national governance system and governance capacity." Ouyang Kang, dean of the National Governance Research Institute of Huazhong University of Science and Technology, said that using data to lead, express, recognize and deal with various issues can form a powerful driving force for social governance.

　　Digital government will bring convenience to ordinary people.

　　The meeting pointed out that it is necessary to satisfy people’s yearning for a better life as the starting point and foothold of digital government construction, and to create a ubiquitous, intelligent, convenient, fair and inclusive digital service system, so that people can run less errands and run more data.

　　Liang Ma, a special researcher at the National Development and Strategy Institute of Renmin University of China and a professor at the School of Public Administration, said that the construction of digital government is people-centered, and everything starts from the needs of the people and provides high-quality public services through digital means. For example, design a simpler interactive interface and a more efficient workflow for government software.

　　"Further building a digital government can make the government’s service areas broader, service content richer, service methods smarter and more convenient, and service effects more humanized, so that people’s sense of acquisition, happiness and security can be significantly improved." Ouyang Kang, for example, in the face of the epidemic, a series of digital means, such as trip code and health code, provided strong support for timely monitoring the evolution of the epidemic, publishing the epidemic dynamics, judging the epidemic situation, and implementing epidemic prevention and control measures, and also made more people feel the value of the digital transformation of the government in improving social governance and public service capabilities.

　　The "Strong Observation" column of People’s Daily found that the related work of digital government construction in China is progressing steadily. China takes the national government service platform as the general hub, connects the government service platforms of various regions and departments, and forms a national integrated government service platform. By December 2021, the platform had more than 800 million real-name users. The Opinions of the General Office of the State Council on Accelerating the Expansion of the Application Fields of Electronic Certificates and National Mutual Recognition proposes that by the end of 2022, the certificates commonly used by enterprises and the masses will be basically electronic, issued and applied synchronously with the physical certificates, and the standards will be unified and mutually recognized nationwide … …

　　The construction of digital government will improve the efficiency of government governance

　　The meeting pointed out that it is necessary to use digital reform to help transform government functions, coordinate and promote the intensive construction, interconnection and collaborative linkage of government application systems in various industries and fields, and give play to the important supporting role of digitalization in the government’s performance of economic regulation, market supervision, social management, public services and ecological environmental protection, and build a coordinated and efficient government digital performance ability system.

　　Specifically, how to understand the transformation and support of government functions brought by the construction of digital government?

　　Ouyang Kang said that strengthening the construction of digital government can promote the accuracy of social cognition. Through big data, the government can fully, accurately and timely understand the real situation and evolution trend of all members of society, so as to make appropriate value judgments and trend analysis of social conditions and people’s feelings, and build good governance of the government on the basis of being more in line with social reality.

　　"At the same time, it can promote the scientific decision-making of the government." Ouyang Kang further stated that the government can use big data and intelligent decision-making system to intelligently compare various important decisions through various alternatives, make scientific pre-research and risk assessment on their possible consequences and their long-term effects, and strive for scientific decision-making, optimize decision-making and promote scientific decision-making.

　　There are also these key points in the construction of digital government.

　　The meeting pointed out that it is necessary to promote technology integration, business integration and data integration as a whole, and improve the collaborative management and service level across levels, regions, systems, departments and businesses.

　　Ouyang Kang said that the overall requirements and strategic measures put forward by the meeting will hopefully solve the problem of "information islands" formed by the lack of communication between all aspects and types of data, and help realize the integration and sharing of data.

　　In addition, the meeting pointed out that we should always tighten the string of data security, speed up the construction of an all-round security guarantee system for digital government, and comprehensively strengthen the security management responsibility of digital government.

　　"We must establish the bottom line thinking and regard digital security as the ‘ Lifeline ’ Incorporate into the overall national security concept system and implement it through legislation, establishment of technical security support system and digital security guarantee system. " Ouyang Kang said.

Tencent Video and TVB jointly produced the commercial war drama "Enterprise Strongman", with a total of 25 episodes. At present, Tencent video members have ushered in a grand finale. Produced by Marco Law and starring artists such as Chen Hao, Tan Junyan, Zhang Xiwen, Gong Jiaxin and John Chiang, the drama focuses on the rapid development of the logistics industry in the past decade, tells the different choices of different groups in the face of market opportunities and challenges, and staged a commercial war drama in the logistics industry.

Behind the commercial war is full of human feelings, and the little people are happy and sad to show the original flavor of Hong Kong opera.

TVB drama series has always been good at shooting group scenes, and "Corporate strongman" has also inherited this feature, satisfying the intense and exciting commercial drama, and at the same time, making the main body of the story lean towards ordinary people as much as possible.

Zhao Kai, played by Chen Hao, is the boss of a logistics company, and his running water is tens of millions, but this does not affect his down-to-earth entrepreneurial road. Zhao Kai believes that "a good entrepreneur should be people-oriented", and he always keeps in mind what his father said: "The most important thing in an enterprise is people".

Xu Daoming, played by Tan Junyan, is his opponent who is also an enemy and friend, and often has differences. The core of their contradiction lies in that Xu Daoming believes that employees are vassals of the company, but Zhao Kai firmly believes that "employees can grow with the company and talents are the soul of a company." He often stands up as a boss to protect the interests of employees, guarantees that he will not lay off employees, and even gives shares to grassroots employees, all of which make this drama pay more attention to ordinary people at the bottom.

Fang Fang, played by Gong Jiaxin, was originally a small boss of a courier station. The group she represents is a small person. The daily concern is that sending a piece can earn a few cents. The biggest crisis in business may be being complained by customers. She and the vast number of couriers behind her can best resonate with ordinary people. Fang Fang lives in Haitang Town, where people are closely related to each other. Many people grew up watching Fang Fang, and the warmth and warmth between neighbors are what we used to see in Hong Kong dramas.

There are both commercial war dramas on the tall side, and we can also pay attention to the sufferings, joys and sorrows of small people in a grounded way. Multi-dimensional expression can meet the different preferences of different audiences. "Enterprise strongman" is based on realism, concerned about the changes in the world, and completely exposed the major events and minor feelings of the logistics industry from top to bottom.

The rise of female roles, business and love win-win.

In the contemporary context, women are independent personalities who can control their own destiny, and female roles are no longer "edged green leaves" in film and television dramas, but pursue that every role is flesh and blood. Even if it is a love scene, it is no longer hard to sprinkle industrial saccharin, but based on strong logic.

There are also many emotional entanglements in "Enterprise Strongman", but each pair of CP is very clear, and the concept of love is very advanced.

Song Qiao, played by Zhang Xiwen, was originally Zhao Kai’s wife. They broke up peacefully because of different life plans. There is no drama of dog blood, just because "two people have only one car and want to go to different destinations, so one of them has to get off first".

After breaking up, Song Qiao and Xu Daoming came together by chance, but they were "undefined". Although they comforted each other, they were not boyfriend and girlfriend.

This kind of emotional mode depicted in "Enterprise Strongman" is common in reality, but not common in Chinese dramas, but it is extraordinarily bold and frank.

After Zhao Kai met Fang Fang, they fell in love. One is the "overbearing president" and the other is the "courier sister". They are originally from different classes, but they never get along with each other, not like they used to be in the "hegemony literature".

Zhao Kai has recognized Fang Fang’s working ability more than once, praising her for "having enthusiasm for her work and having light in her eyes", "a few words can appease the courier" and "she will become a female entrepreneur in the future", which is enough to prove that Zhao Kai really appreciates Fang Fang, and the affection between them was established on the basis of equality from the bud.

Fang Fang has never concealed her ambition for her career. Whether in her career or in love, she has never been a "fool", but she is truly independent, discerning and decisive. Every decision made by Fang Fang is ahead of schedule, from joining the "Generation Logistics" at the beginning of the drama to persuading Zhao Kai to cancel the contract with other franchisees. For Zhao Kai’s feelings, it is also from appreciation to being able to provide assistance to Zhao Kai until they are evenly matched.

This kind of feeling is the mature love between adults, which has both lingering attachment and mutual support. This time, "Enterprise strongman" has achieved the integration of love into business, without weakening the business drama because of love drama, and at the same time, it has also achieved innovative portrayal of female roles in the new era, focusing on sincerity in all aspects.

Linkage bay area innovation model,“unusual result"Industry opening themenew chapter

As a commercial war drama, Enterprise strongman broke the inherent mode of similar dramas in the past and put forward many innovations.

In the past, the story background of Hong Kong dramas was mostly in the local area, but the action track of the role of "Enterprise Strongman" was not only in Hong Kong, but also frequently traveled to and from Guangzhou, Shenzhen and Dongguan, connecting the whole Greater Bay Area with story lines, and often mentioning other provinces and cities in the Mainland. The timeline of the series is from 2010 to the present. In the past ten years, it happened to be a period of rapid development in Greater Bay Area and a golden period of rapid development in the logistics industry. Many changes have taken place in our society and even the whole world.

Zhao Kai’s business philosophy is inseparable from the social changes in reality. He knows that "every province, city and township in China is developing at a high speed." What "Generation Logistics" has to do is to "connect all places together with logistics." As an entrepreneur, his vision is far beyond those businessmen who cheat for the benefit in vanity fair. He can see that "a country must make the best use of its talents, make the best use of its materials, make the best use of its land, and smooth the flow of goods", and what he wants to do is to realize the "smooth flow of goods" for the whole country, which is the consciousness that a conscientious industrial entrepreneur with social responsibility should have.

As a new industry, logistics has not risen for a long time. Enterprise strongman is the first Hong Kong drama focusing on this industry. The drama reflects Zhao Kai’s entrepreneurial history in the past ten years by presenting the operating situation of "Generation Logistics", and also records the characteristics of the times with a lot of space.

From a macro perspective, the innovative thinking of Enterprise Strongman is of extraordinary significance to the ecology of Hong Kong drama. In addition to entertaining the public, film and television plays also have the important functions of witnessing history, reflecting social features and recording changes in social environment. When we pursue the drama, we can not only see the ups and downs of the characters in the drama, but also project our own experiences and review the changes of the times.

From this point of view, TVB has been keeping up with the pace of the times, shooting film and television dramas that are most in line with the current social environment, conveying the unique charm of Hong Kong dramas, and creating works that the audience really likes and has value. Thanks to the linkage of geographical advantages and Greater Bay Area, how can it not be a valuable attempt to combine Hong Kong dramas, which are good at efficient narration, with the mainland film and television drama industry with huge volume, to exchange and create a win-win situation?

The operating comments of the Board of Directors of Xinmai Medical in 2023 are as follows:

　　I. Discussion and analysis of business conditions

　　The company is a leading enterprise in the field of aortic and peripheral vascular intervention in China. In 2021, Tuomai Medical was established to engage in tumor intervention through human peripheral vascular intervention. In recent years, thanks to the policy support and the increase of per capita medical expenditure, endovascular interventional medical devices in China are in a high-speed development stage. With the aging of our population, the continuous development of aortic disease screening technology, the continuous improvement of clinical experience and the continuous improvement of people’s health awareness, the detection rate of aortic and peripheral vascular diseases has gradually increased, and the amount of surgery has shown a rapid growth trend.

　　While further maintaining the influence of the company’s products, the company firmly implements the sales strategy of channel sinking, further expands the sales team, strengthens the expansion of sales channels, and increases the medical education and training of innovative products approved in recent years, fully promotes market development, and further develops international market business. On the other hand, the company has always focused on the continuous innovation of products, continuously increased investment in research and development, and constantly promoted the effective transformation of innovative achievements. The market acceptance of innovative products has been continuously improved, which has promoted the sustained and rapid growth of the company’s sales performance.

　　(1) The overall financial situation during the reporting period

　　During the reporting period, the company achieved a total operating income of 1,187,204,500 yuan, an increase of 32.43% over the same period of last year; The operating cost was 279,578,000 yuan, an increase of 25.65% over the same period of last year; Compared with the same period of last year, sales expenses, management expenses and R&D expenses increased by 25.14%, 19.58% and 25.70% respectively. The operating profit was 573,854,300 yuan, an increase of 38.21% over the same period of last year, and the net profit attributable to the parent company was 492,432,000 yuan, an increase of 37.98% over the same period of last year. The company’s innovative products Castor branched aortic stent-graft and delivery system, Minos abdominal aortic stent-graft and delivery system, and ReewarmPTX drug balloon dilation catheter continued to exert their efforts. The number of new products Taos straight thoracic aortic stent-graft system and Fontus branched stent-graft system in operation increased rapidly, which promoted the steady growth of the company’s sales revenue and profits, further improved the company’s competitiveness in the aortic and peripheral vascular intervention market, and the above products continued to grow rapidly during the reporting period.

　　(two) adhere to technological innovation, product development and registration in an orderly manner.

　　During the reporting period, the company invested a total of 260,437,500 yuan in R&D, accounting for 21.94% of the company’s operating income in the same period.

　　In 2023, the company made significant progress in all R&D pipelines, and submitted registration materials for six products to National Medical Products Administration. The registration information of the occlusion balloon has been submitted to National Medical Products Administration. Cratos branched aortic covered stent and delivery system have been submitted for registration.

　　AegisII abdominal aortic covered stent system is in the pre-marketing clinical trial stage. The thoracic multi-branch covered stent system is in the single center clinical follow-up stage, and its clinical performance is excellent. Aortic flow-limiting rupture stent is in the follow-up stage of single-center clinical trial. In the peripheral business field, in terms of vein, the registration materials of Vfower vein stent and delivery system have been submitted, and the Vewatch vena cava filter and Fishhawk mechanical thrombectomy catheter have been implanted before marketing; On the arterial side, the new generation of peripheral bare balloon catheter and embolic coil with fiber wool are in the registration stage, and the below-knee drug balloon dilation catheter is in the pre-marketing clinical trial stage. In terms of tumor intervention, the microsphere products are in the pre-marketing clinical implantation stage, and the HepaFowTIPS covered stent system has been approved to enter () the special device review procedure ("green channel"), and is currently in the clinical follow-up stage. At the same time, the company explored the development of customized medical devices for the first time at home and abroad, obtained the first domestic customized thoracic aorta covered stent filing certificate and completed the first clinical application, realizing the customized sales of products overseas.

　　The company attaches great importance to the intellectual property rights and patent protection of products. By December 31st, 2023, a total of 693 patent applications had been submitted, and a total of 310 domestic and foreign patents had been authorized, including 205 domestic patents (including 62 invention patents, 134 utility model patents and 9 design patents) and 105 overseas patents (all invention patents). During the reporting period, 66 new patents were granted.

　　(3) Deepen market innovation and promote the market in an orderly manner.

　　The company continues to focus on the distribution of marketing channels in second-,third-and fourth-tier cities and some populous counties, intensifying the market sinking and deepening the market coverage of the company’s products. Build an academic exchange platform to contribute to the development of the industry. Xinmai Medical independently initiated the establishment of the "Xinmai Biomedical Micro Lecture Hall" to promote academic and technical exchanges between high-tech enterprises in the fields of biology, pharmacy and medical care, and between enterprises and institutions, scientific research institutes and medical institutions, and create a high-level academic exchange atmosphere. The company is committed to building a professional academic platform to promote the exchange of excellent clinical experience at home and abroad. Organize a number of activities around innovative products and hundreds of "star products" that have been listed, combine academic sharing with clinical treatment, provide a platform for more young and middle-aged clinicians to interact and learn, and continuously expand the market influence of cardiac artery and peripheral products.

　　As of the disclosure date of this report, the market coverage of the company’s products has been further improved. Among them, Castor branched aortic stent-graft and delivery system have covered more than 1,000 terminal hospitals, Minos abdominal aortic stent-graft and delivery system have covered more than 800 terminal hospitals, and ReewarmPTX drug balloon dilation catheter has covered more than 900 terminal hospitals.

　　In terms of international business, the company further promoted the development of the aforementioned innovative products in the international business market. During the reporting period, the overseas sales revenue increased by more than 55% compared with the same period of last year. By the end of the reporting period, the company has sold in 31 countries and expanded its business to Europe, Latin America and other countries and regions in Asia-Pacific. Among them, Castor branched covered stent and delivery system was first implanted in Singapore and several European countries, and has entered 16 countries in total; Minos abdominal aorta covered stent and delivery system was implanted for the first time in Turkey and other countries, and has entered 19 countries. HercuesLowProfie straight-tube covered stent and delivery system were implanted for the first time in Singapore and several European countries, and have entered 21 countries in total; ReewarmPTX drug balloon dilation catheter was implanted for the first time in Brazil.

　　(D) Pay attention to the construction of the staff, and the talent team is constantly improving.

　　During the reporting period, the company’s business scale still maintained a good growth, and the scale of employees was also expanding. By the end of the reporting period, the total number of employees in the company reached 908, with a net increase of 122 during the reporting period, with a growth rate of 15.52%. Among them, the recruitment of R&D personnel in the company was further strengthened, and the number of R&D personnel increased to 266 during the reporting period, accounting for 29.30% of the total number of R&D personnel, and there were 152 R&D personnel with a master’s degree or above, accounting for 57.14% of the total number of R&D personnel.

　　By gradually optimizing the human resource management system, the company has now formed a core professional team with multiple disciplines and subdivisions. By continuously gathering outstanding talents and strengthening the absorption and integration of human resources, it will provide a strong talent guarantee for the company’s long-term stable and sustainable development in the future.

　　(E) Strengthen internal control and improve the management level of enterprises.

　　The company has always adhered to the values of "quality, integrity, responsibility, efficiency, innovation, striving for the first place, dedication and cooperation". During the reporting period, the company strictly implemented the management concept of "controlling costs, grasping quality and improving efficiency", continuously improved the level of internal control management, continuously optimized the business processes of procurement, production, R&D and sales services and related internal controls, established and improved internal governance and organizational structure, and formed scientific decision-making and implementation.

　　During the reporting period, the company was rated as the National Enterprise Technology Center, the National Technology Innovation Demonstration Enterprise, and the two-in-one management system was rated as AA. Four projects, namely "Branched Intraoperative Stent System" and "Straight Thoracic Aorta Covered Stent System", were rated as the Shanghai High-tech Achievements Transformation Project, and "Design of an Aortic Stent Proximal’ Bird’s Mouth’" were selected as the innovation achievements of Pudong workers in 2023. In addition, Dr. Yuan Zhenyu was selected as the top-notch industrial platform of the Oriental Talents Program, Xu Huijun was awarded as the chief technician in Shanghai, and Zhu Yongfeng, Liwen Wang and Guo Fang were awarded as Pearl Engineers in Pudong New Area. The above honors fully reflect that the company has achieved remarkable quality, economic and social benefits in the work of enterprise operation, innovation ability, quality management and social responsibility.

　　

　　II. Description of the company’s main business, business model, industry and R&D during the reporting period.

　　(a) the main business, main products or services.

　　Xinmai Medical is mainly engaged in the research, development, production and sales of interventional medical devices for aorta and peripheral blood vessels. In the field of aortic interventional medical devices, the company is a domestic enterprise with complete product range, leading scale and competitive market. The main product of the company in this field is aortic covered stent system; In the field of peripheral vascular interventional medical devices, the company has been deeply involved for many years, and now has products such as peripheral drug balloon dilatation catheter and peripheral vascular stent system; In addition, the company has the only intraoperative stent system that can be used in thoracic aortic dissection surgery in China. The company adheres to the mission of "providing accessible, true, good and beautiful medical solutions for the treatment of blood circulation diseases" and is committed to becoming the world’s leading high-tech company in the field of interventional therapy of aorta and peripheral blood vessels.

　　The company always adheres to the product and technology orientation, insists on the research and development and innovation of products with independent intellectual property rights, and gradually realizes the role transformation from technology following to technology leading. After years of painstaking research and development, the company has mastered the core design and manufacturing technology of the covered stent system for treating aortic diseases, and successfully developed the first domestic covered stent for abdominal aorta and the only intraoperative stent system approved for marketing in China that can be used in thoracic aortic dissection surgery. Castor branched aortic covered stent independently developed by the company extends TEVAR surgical indications to aortic arch lesions for the first time, and is the first branched aortic stent approved for marketing in the world.

　　In 2014, the former china food and drug administration issued the "Special Approval Procedure for Innovative Medical Devices (Trial)", which set up a special approval channel for medical devices with China’s invention patents, domestic pioneering technology and international leading level, and significant clinical application value; At present, there are 8 products in the company’s listed and under research products entering the above channels, and the number of products entering the special approval channels ranks in the leading position among domestic medical device enterprises.

　　During the reporting period, there were no major changes in the company’s main business.

　　2. Main products of the company

　　(II) Main business models

　　The business model adopted by the company in the medical device industry is determined according to the characteristics of the industry. At present, the company has an independent and complete procurement, production, research and development, sales and service system. The company’s main business models are as follows:

　　1. Purchase mode:

　　The company sets up purchasing department to implement purchasing management, and uses information system to control and supervise the purchasing process. The production department and R&D department of the company are responsible for providing the purchase application of the required items. The purchasing department is mainly responsible for the procurement management of raw materials, consumables, fixed assets and outsourced services required for product production and R&D, the quality department is responsible for the inspection of purchased goods and services, and the financial department is responsible for reviewing and supervising the procurement budget and fund payment. The purchasing department regularly reevaluates qualified suppliers.

　　2. Production mode:

　　The company’s production mainly adopts the principle of fixed production by sales and proper stocking to guide the formulation of production plan. The production department makes a monthly production plan according to the monthly sales forecast and the current inventory situation, and ensures that the production plan is completed on time with the cooperation of all departments. The production department formulates the weekly production plan of each workshop according to the delivery speed, current finished product inventory, semi-finished product inventory, production capacity and R&D verification. According to different types of products, the inventory of finished products is kept at a reasonable level, generally 1 to 3 months. In the production process, the company has formulated and implemented relevant production and quality inspection systems in strict accordance with YY/T0287-2017 Requirements for Medical Device Quality Management System Used in Laws and Regulations, GB/T19001 Requirements for Quality Management System, Production Management Specification for Sterile Medical Devices, Quality Management System Specification for Medical Device Manufacturers-Implementation Rules for Implantable Medical Devices and other policy documents.

　　3. Sales mode:

　　The company mainly adopts the distribution model for sales, that is, the company sells products to dealers, and then the dealers sell them to hospitals and other medical institutions. By organizing or participating in academic promotion meetings, academic seminars, industry exhibitions, etc., the company introduces the principles, characteristics, usage methods and application effects of the company’s products, and promotes the products. The cooperation mode between the company and dealers is buyout distribution. After purchasing the company’s products, dealers sell them to hospitals directly or through distributors. Under normal circumstances, the hospital does not stock up. After the patient is admitted to the hospital, the hospital puts forward the product purchase demand, and the dealer or distributor transports the product to the hospital. In order to concentrate the sales force and strengthen the marketing function, the company established the marketing department and the sales department respectively. The marketing department is mainly responsible for brand promotion, academic promotion, product training and bidding. The sales department is mainly responsible for dealer management and providing product technical support.

　　4. R&D mode:

　　Due to the strict access system imposed by the industry authorities on the listing of Class III medical devices, the period from planning and design to final marketing of a new product may be as long as 5 to 10 years. The company rationally plans the short-term and long-term scientific research direction, rationally allocates the capital investment arrangement of each stage of the project, establishes a "market demand-oriented" R&D mechanism, determines the product R&D direction through market feedback and suggestions, and controls technical risks such as technology update iteration by combining R&D management systems such as "product life cycle management" and "milestone management", and effectively controls the R&D and registration process of new products through annual R&D budget and regular pre-analysis.

　　Through "product life cycle management", the company has established a forward-looking R&D system, combined with different life cycle stages of different products, timely grasped market demand, and ensured continuous product innovation capability and efficient new product iteration speed. Based on "milestone management", the company can effectively decompose the research and development objectives, and ensure the progress and quality of the project development process through the assessment and supervision of the roles and responsibilities of each person at each stage.

　　During the reporting period, there was no significant change in the company’s business model.

　　(3) the industry situation

　　1. The development stage, basic characteristics and main technical threshold of the industry.

　　(1) The industry and basic characteristics of the company

　　According to the Guidelines for Industry Classification of Listed Companies (revised in 2012) issued by China Securities Regulatory Commission, the company belongs to the special equipment manufacturing industry (classification code C35); According to the National Economic Industry Classification (GB/T4754-2017), the company belongs to the medical equipment and equipment manufacturing (classification code C358) in the special equipment manufacturing (classification code C35). According to the Classification of Strategic Emerging Industries (2018) (Order No.23 of the National Bureau of Statistics), the company belongs to "4.2.2 Implantation in Biomedical Materials and Equipment Manufacturing" in "4.2 Biomedical Engineering Industry". The medical device industry is closely related to life and health, the demand for medical devices is rigid, and the industry has strong anti-risk ability, so the cyclical characteristics of the industry are not obvious.

　　(2) Global medical device market

　　According to F. Jost Sullivan’s analysis, the global medical device market grew from $405 billion to $533.5 billion from 2017 to 2021, with a compound annual growth rate of 7.1%. Driven by the global aging population and the increasing medical expenditure, the global medical device market is expected to grow to 699.9 billion US dollars in 2025 and 916.7 billion US dollars in 2030, with compound annual growth rates of 7.0% and 5.5% respectively.

　　(3) Development of China’s medical device market

　　Compared with the global medical device market, the medical device market in China is developing relatively faster. On the one hand, with the aging of the population and the improvement of residents’ living standards and health awareness, the market demand for medical device products in China continues to grow; On the other hand, under the influence of the national medical device industry support policy, the domestic medical device industry as a whole has entered a stage of rapid growth.

　　According to Jost Sullivan’s analysis, from 2017 to 2021, the market size of medical devices in China increased from 440.3 billion yuan to 843.8 billion yuan, with a compound annual growth rate of 17.7%. With the continuous growth of the per capita disposable income of domestic residents and the strong support of government policies for domestic and innovative medical devices, the medical device market in China is expected to maintain a good momentum of rapid growth, and there is a vast room for future growth. The medical device market in China is expected to grow to 1,244.2 billion yuan in 2025 and 1,660.6 billion yuan in 2030, with compound annual growth rates of 10.2% and 5.9% respectively.

　　(4) The development of cardiovascular interventional devices market.

　　① Definition and classification of cardiovascular interventional instruments

　　Interventional therapy is a new treatment method in the field of cardiovascular diseases. In the field of cardiovascular diseases, interventional therapy has achieved minimally invasive, closed and digital in the process of disease diagnosis and treatment, and has gradually become the three pillar clinical disciplines alongside traditional internal medicine and surgery. At present, in clinical application, cardiovascular interventional instruments are mainly divided into the following categories according to the location where interventional products are used:

　　② Market size of cardiovascular interventional devices in China.

　　Because of the high mortality and disability rate of cardiovascular diseases, the unmet clinical needs have greatly promoted the development of related medical devices, and because of the advantages of minimally invasive and rapid recovery, interventional therapy for cardiovascular diseases has gradually become one of the preferred clinical methods, and the market of cardiovascular interventional devices in China has also been growing.

　　China is in the initial stage of development in some cardiovascular interventional medical devices, especially in the field of aortic and peripheral vascular interventional devices. With the technological innovation and the rise of domestic enterprises, China’s aortic and peripheral vascular interventional devices market has great development potential and space, and will gradually reach the international leading level.

　　According to Jost Sullivan’s analysis, according to the ex-factory price of products, the market size of cardiovascular interventional devices in China will be 37.2 billion yuan in 2021, and it is expected to reach 140.2 billion yuan in 2030, with a compound annual growth rate of 15.9% from 2021 to 2030.

　　(5) Market development of aortic interventional medical devices.

　　Aortic diseases mainly include aortic dissection and aortic aneurysm. Among them, aortic dissection means that the blood flow in the aortic lumen enters the aortic media from the tear of the aortic intima, which separates the media and expands along the long axis of the aorta to form the true and false chambers of the aortic wall. After the blood flows between the true and false chambers or forms a thrombus, it usually causes persistent unbearable chest pain, heart failure or cardiogenic shock, and the mortality rate is extremely high. Aortic aneurysm refers to the damage to the normal structure of the thoracic aorta wall caused by various reasons, which is manifested as local or diffuse expansion of the aorta, and the inner diameter reaches more than 1.5 times before expansion. It can be secondary to aortic dissection, trauma and infection. Blood pressure and blood flow shear force in thoracic aorta are extremely high. If rupture occurs after tumor formation, the bleeding speed and amount are very large and the mortality rate is extremely high.

　　At present, the clinical schemes for the treatment of aortic diseases in China are mainly conservative drug treatment, open surgical treatment and endovascular intervention. Endovascular interventional therapy is a rapidly developing clinical treatment technology in recent years, which is a combination of diagnosis and treatment by using a series of interventional instruments and materials and modern digital diagnosis and treatment equipment.

　　In recent years, intra-aortic interventional therapy has been highly recognized by clinicians and patients because of its advantages of less trauma, fewer complications, high safety and less pain for patients. According to F. Jost Sullivan’s analysis, the global market size of endovascular stent will reach $1.78 billion in 2021. Driven by the continuous technological innovation and accelerated product iteration of large medical device companies around the world, it is estimated that the global market size of endovascular stent will grow to $3.23 billion in 2030.

　　Due to the relatively low screening rate and medical treatment rate of diseases related to aortic intervention in China, there is still a big gap between China and developed countries such as the United States and Japan in terms of the proportion of aortic intervention operations to the corresponding total population, and the overall market size is also relatively large compared with mature foreign markets. According to F. Jost Sullivan’s analysis, China’s endovascular stent is still in the early stage of development. According to the ex-factory price of products, the market size of endovascular stent in China will be 2.4 billion yuan in 2021.

　　With the continuous development of screening technology for aortic diseases in China, the continuous improvement of clinical experience and the continuous improvement of residents’ health awareness, the market scale of aortic interventional medical devices in China will continue to increase in the future, and with the acceleration of research and development of medical device manufacturers, the iteration of product renewal will gradually accelerate, and the marketing and training of enterprises will go deep into hospitals, and the product penetration rate and market scale will continue to increase. According to Jost Sullivan’s analysis, it is estimated that by 2030, according to the ex-factory price of products, the overall market size of endovascular stent in China will grow to 4.31 billion yuan, and the compound annual growth rate of the overall market will be 6.7% from 2021 to 2030, in which the market size of thoracic aortic stent will grow to 2.29 billion yuan, abdominal aortic stent will grow to 2.02 billion yuan, and the market size of thoracic and abdominal aortic stent will grow to 6.7%.

　　According to F. Jost Sullivan’s analysis, in 2021, there will be 49,217 intra-aortic interventional operations in China, including 32,526 thoracic aortic operations and 16,691 abdominal aortic operations, with the ratio of operation volume being about 2:1. With the increasing number of patients with aortic diseases in China, it is predicted that the number of intra-aortic interventional operations will continue to increase in the future, and the overall aortic compound growth rate is expected to be 20.6% from 2021 to 2025.

　　(6) Market development of peripheral vascular interventional medical devices

　　Peripheral vascular diseases mainly include peripheral arterial diseases and venous diseases. Peripheral artery disease refers to the disease of ischemia caused by local stenosis or occlusion of peripheral artery. After stenosis or occlusion of lower extremity artery, it will cause intermittent claudication, leg or foot skin chills, chronic pain and gangrene. Venous diseases mainly include varicose veins, deep venous thrombosis and venous compression, which cause blood flow obstruction and limb swelling.

　　At present, the treatment methods of peripheral vascular diseases mainly include drug therapy, surgical treatment and interventional therapy. Among them, interventional therapy can open blocked blood vessels and restore smooth blood flow through the application of related interventional instruments, which has the advantages of less trauma and rapid recovery of patients. The products mainly include balloons, stents, plaque removal, embolectomy catheters and CTO opening instruments.

　　① Market analysis of peripheral arterial interventional therapy instruments in China.

　　Balloon angioplasty and peripheral artery stent implantation are two main non-surgical treatments for peripheral artery occlusion at present. Interventional instruments used in peripheral artery mainly include peripheral artery stent, balloon dilation catheter, distal protector, guide wire and guide catheter.

　　With the improvement of living standards of residents in China and the increasing emphasis on health, the number of interventional procedures for peripheral arteries in China will continue to increase in the future. With the increasing amount of peripheral artery interventional surgery abroad, the market of peripheral artery interventional stent and balloon abroad will also expand. According to F. Jost Sullivan’s analysis, according to the manufacturer’s shipment and ex-factory price, it is estimated that the market of interventional stents and balloons for peripheral arteries in China will grow to 6.80 billion yuan by 2030.

　　② Market analysis of peripheral vein interventional therapy instruments in China.

　　Compared with aortic diseases, the development of interventional therapy for venous diseases in China is at an earlier stage. The instruments used in interventional treatment of venous diseases are mainly imported manufacturers, and in clinical application, traditional surgical procedures such as vein stripping are still the most important treatment schemes for common venous diseases such as varicose veins and deep vein thrombosis.

　　At present, the market of interventional instruments for intravenous therapy in China is relatively limited, but the overall market shows a rapid growth trend. According to F. Jost Sullivan’s analysis, the market size of peripheral venous interventional devices in China will be about 1.01 billion yuan by 2021, with a compound annual growth rate of about 18.2% from 2017 to 2021, and this rapid growth trend will further increase rapidly with the growth of venous interventional surgery in clinical application, and the market size will reach 4.99 billion yuan by 2030, with a compound annual growth rate of 19.5% from 2021 to 2030.

　　(7) Market development of tumor interventional medical devices.

　　According to the forecast of Yiou think tank, from 2021 to 2025, the market size of tumor interventional devices in China will increase from 10.91 billion to 17.57 billion, with a compound annual growth rate of 12.7%.

　　(8) Main technical thresholds

　　The medical device industry in which the company is engaged in aortic and peripheral vascular intervention belongs to the field of high-value consumables for medical devices, and it is a high-tech industry with interdisciplinary, knowledge-intensive and capital-intensive. The products integrate many disciplines and technologies, such as medicine, materials science, biomechanics, machinery manufacturing, etc. The company’s main business corresponds to Class III medical device products, which have strict industry access standards and management regulations. It takes a long period from research and development to obtaining market access permits at home and abroad, usually 5-10 years. At the same time, in the process of product production, the requirements for production environment and product manufacturing technology are extremely high, and it is necessary to continuously optimize and improve product equipment in the long-term production process. It is difficult for enterprises that lack qualified process equipment and long-term experience in technology to produce qualified products with stable quality. Therefore, it is difficult for new entrants to quickly form competitiveness in a short time, and the barriers to entry in the industry are high.

　　2. Analysis of the industry position of the company and its changes.

　　At present, China’s aortic and peripheral vascular interventional medical device industry is still in a high-speed development stage. With the support of national policies and the continuous increase of R&D investment of enterprises, the performance of independent core products of some domestic manufacturers, such as Xinmai Medical, has partially reached the international advanced level, has strong market competitiveness, and has gradually realized import substitution.

　　Since its establishment, the company has been deeply involved in the field of aortic and peripheral vascular interventional medical devices. Through years of experience accumulation, the company has developed into a leading enterprise of aortic vascular interventional medical devices in China. In 2023, in the market of aortic interventional therapy in China, Cardiac Pulse Medical still has an absolute dominant market share. Except for the head enterprises, other competitors in the market are small in size and quantity, and the market competition pattern is clear.

　　In the field of peripheral vascular intervention, at present, the domestic market is basically occupied by international advanced enterprises such as Medtronic, Boston Science and Abbott. The company has been deployed in the field of peripheral vascular intervention earlier. CROWNUS of Xinmai Medical is the first approved peripheral arterial stent in China, and the company has successfully developed a series of related products including ReewarmPTX drug balloon dilation catheter. Vfower vein stent and delivery system, Vewatch vena cava filter, Fishhawk mechanical thrombectomy catheter, a new generation of peripheral bare balloon catheter, embolic spring coil with fiber wool, and below-knee drug balloon dilation catheter are in the research and development stage, and a complete product line layout has been gradually formed, but the overall competitiveness still lags behind that of international advanced enterprises.

　　3. The development of new technologies, (), new formats and new models during the reporting period and the future development trend.

　　In the field of aortic intervention, at present, the problems such as the lesions involving the arch and ascending aorta, the lesions involving the important branches of abdominal aorta, the extremely narrow and twisted approach, and the treatment of the distal stent rupture have not been completely solved. Therefore, the technical direction of aortic interventional medical device industry mainly focuses on developing products such as multi-branch stent system and ultra-fine stent system with external diameter, which can solve bow lesions and adapt to more patients. Castor branched covered stent system independently developed by the company is the first branched aortic stent approved for the treatment of aortic arch lesions in the world. Minos abdominal aortic stent approved in 2019 is one of the abdominal aortic stent products with the smallest outer sheath diameter in the domestic market. At the same time, the multi-branch thoracic aortic covered stent system independently developed by the company is in the single-center clinical follow-up stage, and has successfully completed the first overseas clinical application in Switzerland, and more research and development projects are progressing steadily.

　　In the field of peripheral arteries, lower extremity vascular diseases are characterized by long lesion length, tortuous lower extremity blood vessels and easy to be affected by the movement of muscle tissue. Therefore, after the bare stent of lower extremity artery is implanted, the stress on the stent is complicated and the long-term fracture rate is high, which leads to vascular restenosis. Therefore, for peripheral arterial diseases, the development trend of minimally invasive interventional instruments is how to better solve the problems of difficulty in opening lower extremity vascular diseases and high restenosis rate after operation. ReewarmPTX drug balloon dilation catheter independently developed by the company can effectively reduce the restenosis after the expansion of lower extremity stenosis. At present, ReewarmPTX drug balloon dilation catheter, high pressure balloon dilation catheter and other products have been marketed. At the same time, the company’s new generation of peripheral bare balloon catheter, embolic coil and below-knee drug balloon dilation catheter and a series of peripheral artery products are also steadily advancing.

　　In the field of peripheral veins, the obstruction of blood return caused by occlusion, stenosis or venous valve insufficiency of lower limbs and thrombus shedding may lead to pulmonary embolism, which is the main clinical problem at present. At present, venous embolectomy, iliac vein stent and venous valve repair are commonly used, all of which are new technologies introduced in recent years. At present, the company has started the research and development of many products, such as vena cava filter and vein embolectomy device. Among them, the iliac vein stent system has been submitted for registration, and the vena cava filter and mechanical thrombus removal catheter have been successfully implanted for the first time before the market. It is expected that the company’s related products in the peripheral vein field will obtain product registration certificates in the next two years, and the company will basically complete the layout of related products in the peripheral vein field.

　　In the field of tumor intervention, the company focuses on the research, development, production and sales of products used for tumor treatment through human peripheral vascular intervention. At present, the main products under research include TIPS covered stent, transjugular intrahepatic puncture system and various microsphere products. The TIPS covered stent system of our company adopts the design of covered cutting stent combined with braided stent, which has good radial supporting force and flexibility, can maintain good stent shape and patency, and reduces the risk of stenosis or occlusion of stent implants and damage to blood vessels. It is the first and only TIPS covered stent system with the combined design of covered cutting stent and braided bare stent in China.

　　(IV) Core technologies and R&D progress

　　1. Core technologies and their advanced features and changes during the reporting period.

　　The company has always been product-oriented and technology-oriented, adhered to the research and development and innovation of products with independent intellectual property rights, gradually realized the role transformation from technology following to technology leading, and committed to becoming the world’s leading high-tech company in the field of interventional therapy for aorta and peripheral blood vessels.

　　2. R&D achievements obtained during the reporting period

　　The company’s self-developed blocking balloon has submitted the registration information to National Medical Products Administration. Cratos branched aortic covered stent and delivery system have been submitted for registration. AegisII abdominal aortic covered stent system is in the pre-marketing clinical trial stage. The thoracic multi-branch covered stent system is in the single center clinical follow-up stage, and its clinical performance is excellent. Aortic flow-limiting rupture stent is in the follow-up stage of single-center clinical trial. In the peripheral business field, in terms of vein, the registration materials of Vfower vein stent and delivery system have been submitted, and the Vewatch vena cava filter and Fishhawk mechanical thrombectomy catheter have been implanted before marketing; On the arterial side, the new generation of peripheral bare balloon catheter and embolic coil with fiber wool are in the registration stage, and the below-knee drug balloon dilation catheter is in the pre-marketing clinical trial stage. In terms of tumor intervention, the microsphere products are in the pre-marketing clinical implantation stage, and the HepaFowTIPS covered stent system has been approved to enter the special review procedure of innovative medical devices ("green channel"), and is currently in the clinical follow-up stage.

　　By December 31st, 2023, a total of 693 patent applications had been submitted, and a total of 310 domestic and foreign patents had been authorized, including 205 domestic patents (including 62 invention patents, 134 utility model patents and 9 design patents) and 105 overseas patents (all invention patents). During the reporting period, 66 new patents were granted.

　　3. R&D investment table

　　Reasons for the significant changes in total R&D investment compared with the previous year.

　　During the reporting period, the Group’s R&D investment totaled 260,437,511.11 yuan, accounting for 21.94% of the operating income, up 51.18% over the same period of last year. The increase in R&D investment is mainly due to the company’s efforts in project R&D and the recruitment of R&D personnel at all levels, and further increase in R&D investment in peripheral vascular intervention and tumor intervention.

　　Reasons for the great change in the capitalization proportion of R&D investment and its rationality

　　In 2023, a number of R&D projects of the Group successfully completed the first human clinical trial and entered the clinical stage. Therefore, the capitalization proportion of R&D investment increased in this reporting period, up by 152.10% compared with the same period of last year.

　　4. Research projects

　　5. R&D personnel

　　6. Other explanations

　　

　　Iii. Analysis of core competitiveness during the reporting period

　　(A) analysis of core competitiveness

　　1. A stable and professional management team

　　The company has a professional, innovative and excellent management team with common values. The company’s main management personnel have more than 10 years’ experience in the medical device industry. Besides having a good technical foundation, they also have rich management experience in the medical device industry, have a deep understanding and comprehensive grasp of the medical device industry policy and future development trend, and have very rich experience in product research and development, production management, and marketing network construction and layout.

　　2. Excellent technical research and development capabilities

　　The company attaches great importance to the construction of R&D team, and continuously expands the talent pool by combining independent training with external introduction. At present, it has set up a highly competitive R&D team in the industry, and has a group of professional and technical personnel with rich R&D experience, strong innovation ability and diverse professional composition in the research and development of aortic and peripheral vascular interventional medical devices. In 2023, the company continued to increase the talent pool of R&D personnel and increase the recruitment of R&D personnel. By the end of 2023, the company had 266 R&D personnel, an increase of 43 compared with 2022, accounting for 29.30% of the total number of employees. Among the R&D personnel, there were 152 R&D personnel with master’s degree or above, accounting for 57.14% of all R&D personnel. The professional background of R&D personnel covers many disciplines such as materials science, mechanical design and manufacturing, automation, pharmacy, pharmaceutical preparations, textile engineering, etc. The multi-disciplinary staffing can meet the R&D needs of different core technologies of the company.

　　The company established a mature project evaluation system, regularly tracked and collected all kinds of industry data information, and timely evaluated the company’s existing technology and patient needs through classified analysis, providing a basis for the company to formulate short-term and medium-and long-term product development strategies. The company regularly evaluates the new technologies under development, conducts technical exchanges, product stage reviews and other activities, actively listens to the clinical needs of doctors and patients, deeply digs the clinical pain points of doctors, and develops innovative products that meet clinical needs through comprehensive analysis of patient needs, technology, registered clinic, production and other factors.

　　3. Leading product innovation ability

　　The company has mastered the core design and key manufacturing technology of the stent-graft system for aortic diseases. Relying on its excellent technical research and development capabilities, the company took the lead in developing aortic interventional medical devices with completely independent intellectual property rights in China and reached the international advanced level, and successfully realized large-scale industrialization, breaking the monopoly of foreign products and laying the foundation for the localization of medical devices in sub-fields.

　　In 2014, the former china food and drug administration issued the "Special Approval Procedure for Innovative Medical Devices (Trial)", which set up a special approval channel for medical devices with China’s invention patents, domestic pioneering technology and international leading level, and significant clinical application value. Up to now, there are 8 products listed and under research in the company that have entered the above channels, and the number of products entering the special approval channel ranks in the leading position among domestic medical device enterprises.

　　4. Marketing network with deep coverage

　　After years of development, the company’s products have covered 31 provinces, autonomous regions and municipalities directly under the central government, and are widely used in major terminal hospitals in China. The company has strong competitiveness in the number of dealers, terminal hospitals and sales area coverage. In addition, the company has laid out marketing channels in many second-,third-and fourth-tier cities. With the continuous improvement of residents’ living standards and medical consumption in China, the penetration rate of minimally invasive interventional therapy in these areas will be further improved, and the company can take the lead in benefiting from market expansion. By the end of the reporting period, the company’s products have entered more than 2,100 hospitals nationwide, and the domestic market share of aortic products has ranked first among domestic brands for many years.

　　In terms of international business, the company further promoted the development of the above innovative products in the international business market. By the end of the reporting period, the company has sold in 31 countries and expanded its business to Europe, Latin America and other countries and regions in Asia-Pacific. Among them, Castor branched covered stent and delivery system was first implanted in Singapore and several European countries, and has entered 16 countries in total; Minos abdominal aorta covered stent and delivery system was implanted for the first time in Turkey and other countries, and has entered 19 countries. HercuesLowProfie straight-tube covered stent and delivery system were implanted for the first time in Singapore and several European countries, and have entered 21 countries in total; ReewarmPTX drug balloon dilation catheter was implanted for the first time in Brazil.

　　5. Advanced quality management and manufacturing level

　　The company has established a complete quality management system in strict accordance with YY/T0287-2017 Requirements of Medical Device Quality Management System for Laws and Regulations, ENISO13485:2016 Medical Device Quality Management System, Medical Device Production Quality Management Specification (formerly china food and drug administration Announcement No.64 in 2014) and other standards, and has established a complete quality management system in research and development, clinical registration, procurement, production, sales and after-sales service. In 2017, the company passed the ENISO13485:2016 quality management system certification of German TV Sü ddeutsche Group.

　　After years of painstaking research and development, the company has mastered the core design and manufacturing technology of aortic covered stent system. The company has introduced the advanced international production equipment for manufacturing stents and balloon catheters, forming a large-scale domestic production capacity of minimally invasive interventional medical products with reliable and stable product quality.

　　(II) Events that have seriously affected the core competitiveness of the company during the reporting period, impact analysis and countermeasures.

　　

　　Fourth, risk factors

　　(A) Not yet profitable risk

　　(2) Risk of sharp decline in performance or loss

　　(C) core competitiveness risks

　　1, new product development and registration risk

　　Aortic and peripheral vascular interventional medical device industry is a technology-intensive industry, which requires high product research and development and technological innovation ability and has a long research and development cycle. In order to ensure that the company continues to maintain its core competitiveness in R&D and innovation, the company needs to independently develop new technologies and new products on the basis of accurately and timely grasping market demand and industry technology development trends. In the process of new product research and development, the company may face the risk of deviation in research and development direction, high investment cost of new product research and development, slow research and development process and even failure of research and development. New product research and development must go through design verification, registration testing, clinical trials, registration approval and other stages, and obtain the product registration certificate issued by relevant domestic and foreign regulatory agencies before it can be put on the market for sale. Due to the large number of pre-registration procedures and long period of aortic and peripheral vascular interventional medical devices, the company may have the risk that the newly developed products cannot be registered in time, thus delaying the product marketing process and adversely affecting the company’s operating performance.

　　2. Iterative risk of technology update.

　　Aortic and peripheral vascular interventional medical device industry is a technology-intensive industry. With the continuous increase of R&D investment of enterprises in the industry, innovative products and technologies may emerge in the future. Although the company has established an industry-leading R&D team, it will have a negative impact on the issuer’s business if it can’t keep track of the development trend of industry technology and update the existing products in time in the future.

　　3. Risk of loss of core technical personnel

　　Aortic and peripheral vascular interventional medical device industry is a multidisciplinary and knowledge-intensive industry, which requires a large number of technical personnel. The company’s past development benefited from having a group of professional and technical personnel with rich experience, strong innovation ability, reasonable professional structure and relatively stable personnel composition. However, due to the late start of domestic related industries and the relative lack of compound talents, whether the existing R&D team can be maintained stable and outstanding technicians can be continuously attracted is related to whether the company can continue to maintain its technological leading edge in the industry and the stability and durability of production and operation. If the company’s talent training and introduction can’t meet the needs of the company’s business development, or even the loss of core technical personnel, it may lead to the risk of product technology leakage, the slowdown or termination of the research and development process, which will adversely affect the company’s sustainable development.

　　(4) Operational risks

　　1, the market competition risk

　　In recent years, with the rapid development of domestic aortic and peripheral vascular interventional medical device industry, many domestic and foreign manufacturers have been attracted to join the competition, and the competition in the industry has become increasingly fierce. Among them, multinational medical device companies such as Medtronic, Boco and other competitors occupy a relatively high market share in the Chinese market as a whole. At the same time, aortic and peripheral vascular interventional medical devices are one of the rapidly developing fields in the domestic medical device industry. Its broad market space and good economic returns may attract more enterprises to join this field, and the market competition may be further intensified. If the company can’t maintain its competitive advantage in product research and development, quality management and marketing channels in the future, or the above-mentioned multinational medical device companies change their market strategies and take measures such as price reduction and acquisition to seize the market, it may have an adverse impact on the company’s market share and gross profit margin.

　　2, the risk of product price decline

　　At present, domestic hospitals mainly purchase through provincial procurement platforms. The provincial procurement platform is responsible for accepting the product declaration or direct bidding of domestic medical consumables manufacturers and domestic general agents of imported medical consumables, and conducting qualification review or product review on them, and finally determining the variety and price of the net hanging (or winning the bid) in the procurement platform. The company set its own ex-factory sales price on the basis of referring to the terminal price, and the product sales price was relatively stable during the reporting period. If the company fails to keep up with the development of the industry in the future, continue to carry out technological innovation and product upgrading, and maintain its leading position in the industry, or the relevant national policies and market competition environment undergo major changes, the company may face risks such as falling product market prices and gross profit margins, which will adversely affect the company’s future profitability.

　　On March 13th, 2023, the Office of Medical Consumables Purchasing Alliance of Public Medical Institutions in Henan Province issued the "Notice on Establishing Medical Consumables Purchasing Alliance of Public Medical Institutions in Henan Province" to centrally purchase medical consumables of neurological intervention and peripheral intervention. On April 28th, 2023, Hebei Province Centralized Purchasing Center for Medical Medicines and Devices issued the Notice on Offering Quotations for 19 Kinds of Centralized Purchasing Medical Consumables, and collected 19 kinds of products including disposable sterile peripheral intravascular drug coated balloons, and the company was successfully selected. The centralized procurement policy being implemented by the state will also have a significant impact on price changes.

　　3, the risk of dealer sales model

　　During the reporting period, the company mainly adopted the distribution model for sales. Distribution mode is a common sales mode adopted by medical device manufacturers, which plays a positive role in improving product marketing efficiency and brand and market influence. If the company can’t improve the management ability of dealers in time, some dealers’ marketing activities may be inconsistent with the company’s brand purpose and business objectives, or dealers may have their own management confusion, violate laws and regulations, or even have disputes with dealers, which may lead to the damage of the company’s brand and reputation or the decline of regional sales of products, which will have an adverse impact on the company’s marketing.

　　4. Procurement risks of important raw materials

　　The raw materials required for the company’s production mainly include medical nickel-titanium metal, PET polymer materials and alloy developing points. In view of the fact that the company’s main products are strictly supervised medical devices, in order to ensure the quality and performance of products and the stability of procurement sources, some raw materials of the company are imported from Europe, America and other countries or regions. Some of the raw materials needed by the company have high requirements on production technology and product quality, and the number of domestic suppliers that can meet the company’s raw material procurement needs is small. If domestic suppliers encounter difficulties in production and operation in the future and cannot provide raw materials to the company, the company needs to purchase related raw materials from overseas suppliers. Because the price of imported raw materials is generally higher than that of domestic raw materials, the purchase price may rise and the purchase cycle may become longer, which will adversely affect the company’s production and operation. At the same time, if there is a trade friction between the countries where overseas suppliers are located and China in the future, the company may also face the situation that the purchase price will increase, the supply will not be timely, and even the supply will be cut off, thus adversely affecting the company’s production and operation.

　　(V) Financial risks

　　1. Risk of asset impairment

　　The intangible assets of the company are mainly composed of non-patented technology and software, in addition to land use rights. At the end of 2020, 2021, 2022 and December 2023, the book value of intangible assets of the company was 60,621,500 yuan, 76,074,800 yuan, 219,293,500 yuan and 207,627,000 yuan, respectively, accounting for 4.41%, 4.34% and 207,627,000 yuan of total assets. If the intangible assets such as non-patented technology are impaired due to changes in the market environment and technological upgrading, it will adversely affect the company’s profitability.

　　The company’s development expenditure is formed by capitalization of R&D investment after the product under research successfully completed the first human clinical trial. The relevant R&D investment will stop capitalization when the product is applied for clinical termination and the medical device registration certificate is obtained, and the development expenditure will be transferred to intangible assets and amortized. At the end of 2020, 2021, 2022 and December 2023, the company’s development expenditure was 41,513,100 yuan, 40,103,700 yuan, 51,093,400 yuan and 138,646,600 yuan respectively, accounting for 3.02%, 2.29% and 2.29% of the total assets. If the market environment changes, technological upgrading and other factors lead to impairment of development expenditure, it will adversely affect the company’s profitability.

　　As of December 31, 2023, the book value of the company’s long-term equity investment was 121,863,900 yuan, mainly for

　　OptimumMedicaDeviceInc invested, and the company holds 27.63% of its shares, which constitutes a joint venture and is accounted for by the equity method. If OptimumMedical Device Inc’s future business situation deteriorates or development fails to meet expectations, the company’s long-term equity investment in OptimumMedical Device Inc will be impaired, which will adversely affect the company’s assets and profitability.

　　2. Risk of fluctuation of gross profit margin

　　In 2020, 2021, 2022 and 2023, the gross profit margin of the company’s main business was 79.78%, 78.05%, 75.18% and 76.45% respectively, and the gross profit margin fluctuated. During the reporting period, the change of gross profit margin of the company’s main business was mainly affected by factors such as product structure change brought about by the continuous introduction of new products, fluctuation of raw material prices, and phased output reduction caused by site relocation.

　　If the macro-economy, relevant national policies and market competition change significantly in the future, resulting in a significant adverse impact on the sales price of the company’s products or the purchase price of raw materials, and the company fails to reduce production costs by improving production efficiency, technological innovation and expanding production scale, and fails to continuously carry out technological innovation and product upgrading, the company may face the risk that the gross profit margin of its main business will fluctuate greatly and its profitability will decline.

　　3. Tax preference risk

　　According to the Enterprise Income Tax Law of People’s Republic of China (PRC), the recognized high-tech enterprises enjoy the preferential tax rate of 15%. On November 2, 2018 and November 18, 2021, the company obtained high-tech enterprise certificates with numbers GR201831001199 and GR202131002383, respectively, with a validity period of three years. The company enjoys a preferential income tax rate of 15% from the year when it first obtained the high-tech enterprise certificate to 2023.

　　If the company can’t pass the qualification re-certification of high-tech enterprises in the future, or the state cancels the preferential corporate income tax policy for high-tech enterprises, the company can’t continue to enjoy the preferential tax rate for high-tech enterprises, and then it faces the risk of declining performance.

　　(VI) Industry risks

　　1. Risk of changes in industry policies or standards

　　The company is a medical device manufacturer, and the products it produces and sells are closely related to human health, so it is strictly supervised by National Medical Products Administration and other competent departments. In recent years, with the further deepening of the reform of medical and health system in China, relevant government departments have successively promulgated many laws and policies in terms of industry standards, bidding, centralized procurement, circulation system, etc., including two-vote system, centralized procurement of high-value medical consumables, DRGs payment policy, etc., which has a profound and extensive impact on the development of the industry. On June 4th, 2021, the National Medical Insurance Bureau and other eight departments issued the Guiding Opinions on Organizing the Centralized Procurement and Use of High-value Medical Consumables by the State (No.31 [2021] of Medical Insurance), which provided the overall norms and requirements for the centralized procurement of high-value medical consumables. On March 13th, 2023, the Office of Medical Consumables Purchasing Alliance of Public Medical Institutions in Henan Province issued the "Notice on Establishing Medical Consumables Purchasing Alliance of Public Medical Institutions in Henan Province" to centrally purchase medical consumables of neurological intervention and peripheral intervention. On April 28th, 2023, Hebei Province Centralized Purchasing Center for Medical Medicines and Devices issued the Notice on Offering Quotations for 19 Kinds of Centralized Purchasing Medical Consumables, and collected 19 kinds of products including disposable sterile peripheral intravascular drug coated balloons, and the company was successfully selected. The company has always closely followed the state regulatory trends, adjusted its business strategy in a timely manner, thoroughly studied domestic and foreign quality standards and constantly improved its products.However, if the relevant policies are implemented in the company’s field or the standards undergo unexpected major changes, the company’s products or business model need to be significantly adjusted, or the company fails to formulate effective countermeasures in time, which may adversely affect the company’s operating performance.

　　2. Product quality and liability risk of medical disputes

　　The company’s products are used in the field of interventional therapy of aorta and peripheral blood vessels, and belong to the national key medical device products. The safety and stability of the products are very important to the life and health of patients. The company has established a relatively complete quality management system and formulated and implemented strict quality control measures to ensure the safety and stability of product quality as much as possible. The company’s products are mainly used for interventional therapy of aorta and peripheral blood vessels. Many factors may affect the success or failure of the operation, such as product quality, appropriateness of product selection, doctor’s technical level, patient’s disease status, etc. If there is a problem in the operation using the company’s products, and the reasons and responsibility attribution are not clearly defined, it cannot be ruled out that the company may face litigation, arbitration, compensation or negative news reports, which will damage the company’s market reputation and adversely affect the company’s product sales and business performance.

　　(VII) Macro-environmental risks

　　Risk of exchange rate fluctuation

　　Some of the company’s product sales and raw material purchases are settled in foreign currency. With the continuous expansion of the company’s overseas sales and purchases in the future, if the RMB exchange rate changes greatly, it will cause fluctuations in the company’s product sales price or raw material purchase price denominated in foreign currency, and foreign exchange receipts and payments will generate exchange gains and losses accordingly, which will have an impact on the company’s operating performance.

　　(8) Risks related to depositary receipts

　　(9) Other major risks.

　　

　　V. Main operations during the reporting period

　　During the reporting period, the company achieved a total operating income of 1,187,204,500 yuan, an increase of 32.43% over the same period of last year; The operating cost was 279,578,000 yuan, an increase of 25.65% over the same period of last year; Compared with the same period of last year, sales expenses, management expenses and R&D expenses increased by 25.14%, 19.58% and 25.70% respectively. The operating profit was 573,854,300 yuan, an increase of 38.21% over the same period of last year, and the net profit attributable to the parent company was 492,432,000 yuan, an increase of 37.98% over the same period of last year.

　　

　　VI. The Company’s Discussion and Analysis on the Company’s Future Development

　　(A) the industry pattern and trends

　　At present, China’s aortic and peripheral vascular interventional medical device industry is still in a high-speed development stage. Foreign medical device companies represented by Medtronic and Gore have occupied a high market share in the domestic aortic and peripheral vascular interventional medical device market by virtue of their relatively complete product lines, leading technology and strong research and development capabilities. However, with the support of national policies and the increasing investment in R&D of enterprises, the performance of independent core products of some domestic production enterprises, such as Xinmai Medical, has partially reached the international advanced level, has strong market competitiveness, and has gradually realized import substitution. With the technical progress of medical device enterprises in China, the maturity of supporting industrial chain and the deepening of government support policies, the relevant medical needs will be released continuously, thus promoting the continuous expansion of the aortic and peripheral vascular intervention market.

　　(1) Industry policies are continuously introduced, and domestic substitution is gradually accelerated.

　　The development of China’s medical device industry, as an important part of our people’s life and health and medical and health undertakings, has been highly valued by the state. "Healthy China 2030" Planning Outline and "Made in China 2025" both promoted the development of medical devices to the strategic position of national development.

　　At the national level, policy dividends are frequently released to the medical device industry, which brings important development opportunities for excellent domestic brands with high cost performance and high technology content, including grading diagnosis and treatment system to divert patients to primary medical institutions, policies to encourage domestic devices to purchase first, select excellent products to establish benchmarks, etc., and the competitive advantages of domestic brands with high cost performance are gradually highlighted.

　　At the R&D level, the state has launched a green approval channel for innovative products to encourage the improvement of innovation and R&D capabilities in the medical device industry. With the continuous improvement of the technological innovation ability of domestic medical device manufacturers and the increasing brand awareness, the development potential of domestic medical devices is huge, and the import substitution process is expected to speed up.

　　(2) The detection rate and permeability of aortic and peripheral vascular diseases have increased, and the market capacity has expanded rapidly.

　　With the implementation of the "Healthy China" strategy, the reform of medical service system in China has been deepened, the level of diagnosis and treatment in medical and health institutions has been gradually improved, the awareness of health examination of the whole people has been continuously improved, the detection rate of aortic and peripheral vascular diseases has been gradually improved, and the amount of surgery has increased rapidly.

　　At present, the detection rate and treatment penetration rate of aortic and peripheral vascular diseases in China are still low compared with the mature international market. Under the background of increasingly rich medical resources, constantly improving the technical level of clinicians, and continuously improving the technology and safety of domestic brands, the detection rate of aortic and peripheral vascular diseases in China will continue to increase, the treatment penetration rate will be close to the international mature market, and there is huge room for market capacity improvement.

　　(3) The aging of population, the increase of medical expenditure, the deepening of medical insurance reform and the increase of medical demand.

　　The National Bureau of Statistics released the latest data in 2023 on January 17th. At the end of 2023, the population aged 60 and over was 296.97 million, accounting for 21.1%, of which the population aged 65 and over was 216.76 million, accounting for 15.4%. Compared with 2022, it has greatly improved. On September 20, 2022, the National Health and Wellness Commission held a press conference on the progress and effectiveness of the aging work since the 18th National Congress of the Communist Party of China. At the meeting, Wang Haidong, director of the Department of Aging of the National Health and Wellness Commission, said that it is estimated that the number of elderly people aged 60 and above will exceed 400 million around 2035, accounting for more than 30% of the total population, and they will enter a stage of severe aging. At the same time, due to the accelerated aging process of the population and the change of people’s lifestyle, the disease spectrum of Chinese residents is gradually changing, with hypertension, The trend of population aging and the change of disease spectrum make the market demand of medical device products in China expand continuously.

　　(II) Company development strategy

　　Xinmai Medical always pays attention to the personal feelings of every user, takes "providing accessible, true, good and beautiful medical solutions for treating circulatory diseases" as its mission, takes building a people-oriented global leading emerging high-tech medical group as its long-term vision, always puts technology research and development and innovation capacity building at the top of the company’s development, and insists on continuous investment in product research and development and production technology innovation. While maintaining and consolidating the competitive advantage in the field of aortic vascular intervention, We will continue to develop and improve the product line layout in the fields of peripheral vascular intervention and tumor intervention, further reduce the domestic medical costs in related fields by developing more new products with competitive technology and price, and continuously enhance the market influence of the company’s brand, and finally become the world-leading high-tech company in the field of aortic and peripheral vascular intervention.

　　(3) Business plan

　　In the future, the company will seize the historical opportunity of the rapid development of medical device industry at home and abroad, continue to be guided by customer demand, and constantly improve and give play to the company’s operating advantages in research and development, technology, manufacturing, quality, products, markets, channels and services through independent research and development and technological innovation, and continuously strengthen the company’s core competitiveness and profitability in order to achieve sustained and healthy growth.

　　The company will continue to focus on its main business, promote its strategic planning and business layout in an orderly manner, further strengthen its comprehensive capabilities in product research and development, market expansion and other aspects, and optimize production and management efficiency, with a view to maintaining a good growth trend in operating income and performance. The overall business plan of the company in 2024 is as follows:

　　1, innovation and research and development plan

　　The company will continue to keep up with the clinical market demand, continue to increase investment in research and development, and accelerate the improvement of product line layout. The company rapidly promotes the reserve of other new technologies and R&D projects. In the aortic business, the blocking balloon plan is approved for listing, Cratos will complete the registration and submission within the year, and other aortic products will be actively promoted as planned; In terms of peripheral intervention and tumor intervention, many products such as vena cava filter, vein stent, new generation naked balloon and puncture kit are planned to be listed and approved during the year.

　　In the future, the company will invest more human resources and funds in the field of peripheral vascular intervention and tumor intervention, and start with high-end products through independent research and development, investment mergers and acquisitions, and focus on research and development of products with good market prospects and effective solutions to clinical pain points, so as to build a competitive product portfolio in the peripheral vascular field as soon as possible.

　　2. Market development plan

　　The company will give full play to the existing customer resources and marketing network, and on the basis of consolidating the existing market, increase the coverage of marketing network, enhance the regional radiation ability, academic promotion ability and regional competitive advantage of marketing network, actively expand market share, improve product penetration rate, and provide effective support for the growth of the company’s operating performance.

　　In the domestic market, in order to cope with the continuous sinking of national medical resources, vigorously develop the county-level hospital market, and at the same time, combine the listing planning of several new products in the next few years, recruit and train excellent technical and sales personnel, provide a strong guarantee for the company to expand product sales scale, carry out market promotion and doctor training, enhance the company’s comprehensive service ability, and comprehensively strengthen the company’s brand promotion and enhance the company’s brand image.

　　In the international market, the company will continue to strengthen cooperation with leading customers in regional industries around the world, and promote the market access and promotion of some existing aortic and peripheral interventional products in Europe, Latin America, Asia Pacific and other countries. At the same time, the company will focus on collecting and analyzing the clinical data of listed products in the European market, and actively promote the pre-marketing clinical trials of innovative products in Europe and Japan. In addition, the company will also devote itself to the doctor education exchange, promote the interaction and academic sharing between overseas doctors and domestic doctors, so as to enhance the brand awareness and recognition in the international market and promote the promotion and sales of the company’s products in more countries and regions.

　　3, expand production capacity and reduce cost plan

　　With the rapid growth of product sales, the company will further expand the production scale to better meet the growing market demand and lay a solid foundation for the company’s future development and market expansion. At the same time, the company will pay more attention to product details, optimize production technology, further improve product quality and effectively reduce product costs.

　　In the future, the company will further devote itself to the development and application of intelligent manufacturing technology in the production process, further strengthen the company’s large-scale production capacity and improve production efficiency, so as to effectively cope with the unfavorable factors such as the increase of labor costs, production sites and management expenses.

　　4. Human resource planning

　　In order to achieve the company’s development goals, the company will continue to strengthen the introduction and training of talents, and continue to introduce specialized talents in marketing and academic promotion, research and development, clinical, production and comprehensive management on the basis of the existing talent team. The company will help the sustainable cultivation of internal talents by establishing a management mechanism for talent echelon construction, and establish an effective incentive mechanism and a salary system with market competitiveness to retain talents, further improve the training, evaluation and supervision mechanism of human resources, cultivate a talent echelon with outstanding business ability and reasonable knowledge age structure, and build a talent base for the company’s long-term sustainable development. At the same time, by establishing a high-quality talent team, the connotation of corporate culture will be further enriched, and corporate culture will become the internal driving force for the company’s sustainable growth in the future.

　　5. Investment and merger plan

　　According to the long-term development strategy and planning, combined with specific operational needs, the company will fully consider its own advantages and disadvantages in capital, technology and management, actively learn from the experience of overseas benchmark enterprises, and, based on the basic principle of being responsible to shareholders and beneficial to the company’s long-term development, when conditions are ripe, timely select asset targets related to the development of the company’s main business as investment and M&A targets, with a view to integrating cutting-edge technologies in the industry around the world, consolidating and upgrading existing businesses, further enriching and perfecting the company’s product line layout, and providing the company with.

　　6. Corporate governance

　　The Company will continue to strictly follow the Company Law, Securities Law and other relevant laws, regulations and normative documents, constantly improve the corporate governance structure, establish a scientific and effective decision-making mechanism and internal management mechanism, give full play to the roles of the board of directors, the board of supervisors and independent directors, and realize scientific decision-making and standardized operation. At the same time, the company will continue to optimize the existing business processes, sort out the new business management processes, achieve efficient management goals with the help of information tools, promote the sustained, healthy and stable development of the company, and earnestly safeguard the interests of listed companies and minority shareholders.

　　(4) Others

　　I. Description of corporate governance.

　　During the reporting period, the company continuously improved and optimized its corporate governance structure, established and improved its internal management and control system, and standardized its behavior in strict accordance with the requirements of the Company Law of People’s Republic of China (PRC), the Securities Law of People’s Republic of China (PRC), the Rules for the Listing of science and technology innovation board Stocks on Shanghai Stock Exchange, the Self-regulatory Guidance No.1 of science and technology innovation board Listed Companies on Shanghai Stock Exchange, and other relevant laws, regulations and departmental rules of China Securities Regulatory Commission and Shanghai Stock Exchange. The shareholders’ meeting, the board of directors (including special committees), the board of supervisors and the management of the company actively perform their respective duties according to the authority, responsibilities and obligations stipulated in the Articles of Association and various systems within the company, earnestly safeguard the interests of the company and all shareholders, and promote the long-term healthy development of the company. By the end of the reporting period, the responsibilities of the company’s "three meetings and one floor" were clear, and the actual situation of corporate governance met the requirements of the China Securities Regulatory Commission and the Shanghai Stock Exchange. The details of corporate governance are as follows:

　　(1) About shareholders and shareholders’ general meeting: The Company strictly follows the Company Law, Securities Law, Articles of Association and Rules of Procedure for Shareholders’ General Meeting, regulates the convening, convening and voting procedures of shareholders’ general meeting, treats all shareholders equally, and ensures that shareholders can fully exercise their rights. During the reporting period, the Company held an annual general meeting and three extraordinary general meetings, namely the first extraordinary general meeting in 2023, the second extraordinary general meeting in 2022, and the third extraordinary general meeting in 2023.

　　(2) About the company and the controlling shareholder: The company has independent business and independent operation ability, and the company and the controlling shareholder are independent in terms of assets, personnel, finance, institutions and business. The company has a complete and independent business system and the ability to open up business for the market, and an independent raw material procurement and product sales system. The board of directors, the board of supervisors and internal institutions of the company operate independently, exercise their management authority independently, and make major decisions according to the Articles of Association and other relevant laws and regulations.

　　(3) Regarding directors and the board of directors: The company elects directors in strict accordance with the procedures stipulated in the Company Law, the Securities Law and the Articles of Association, and the number and composition of directors of the company meet the requirements of laws and regulations. During the reporting period, the Company revised the Rules of Procedure of the Board of Directors and the Work System for Independent Directors. All directors of the Company can conscientiously carry out their work in accordance with the requirements of laws and regulations and perform their duties and obligations diligently. When it comes to matters that need to be avoided from voting, all related directors avoid voting, and the decision-making procedures are reasonable, legal, compliant and objective. Independent directors can perform their duties independently, express independent opinions on major issues of the company, safeguard the overall interests of the company, and pay special attention to the legitimate rights and interests of minority shareholders. Directors shall be elected or replaced by the shareholders’ meeting, and the appointment of directors shall conform to the statutory procedures. The Board of Directors consists of a Strategy and Development Committee, an Audit Committee, a Nomination Committee and a Remuneration and Appraisal Committee. All members of the special committees are directors. Each committee gives full play to its professional advantages and makes use of its own expertise to make scientific and reasonable suggestions on major issues. As of the end of the reporting period, the company held nine board meetings throughout the year, all of which were convened and convened by the chairman.

　　(4) About the supervisors and the board of supervisors: The company operates in strict accordance with the Company Law, the Securities Law, the Articles of Association and the Rules of Procedure of the Board of Supervisors. The company has a board of supervisors, consisting of three supervisors. The board of supervisors shall have one chairman. All supervisors earnestly exercise their supervisory functions and safeguard the legitimate rights and interests of the company and shareholders. By the end of the reporting period, the Company held nine meetings of the Board of Supervisors throughout the year, all of which were convened and convened by the Chairman of the Board of Supervisors.

　　(5) Performance evaluation and incentive and restraint mechanism: The company has established a complete performance evaluation and incentive and restraint mechanism for directors, supervisors, senior managers, management and employees of the company. The procedures for the appointment of the company’s senior management personnel are open and transparent, and comply with the provisions of relevant laws and regulations.

　　(6) Information disclosure and transparency: The company strictly follows the provisions of the Information Disclosure Affairs Management System, Insider Information Management System and Investor Relations Management System to ensure the true, accurate, complete, timely and fair disclosure of company-related information. And through the designated media, china securities journal, shanghai securities news, Securities Times, Securities Daily and the official website of Shanghai Stock Exchange (http://www.sse.com.cn), we will make regular announcements and temporary announcements, and do a good job of confidentiality before information disclosure and registration of insiders of major events, earnestly fulfill the information disclosure obligations of listed companies and actively safeguard the legitimate rights and interests of companies and investors.

　　(7) Investor relations: During the reporting period, the company revised the Investor Relations Management System. Under the provisions of the system, the company strengthened the management of investor relations and actively broadened the channels of communication with investors. Through the interactive platform of investor relations, investor hotline, fax, e-mail, performance briefing, strategic meetings of major securities firms and on-site investigation of investors, the company responded to investors’ questions, actively contacted investors, strengthened information communication, promoted benign interaction with investors and improved the transparency of the company.

At the moment when the competition for talents is intensifying, the equity incentive plans of large technology companies are frequently searched.

On June 20th, Gree Electric (000651.SZ) released the first draft of employee stock ownership plan. It is reported that the price of shares repurchased by the employee stock ownership plan is 27.68 yuan/share, which is equivalent to 50% of the average price of shares repurchased by the company’s "Proposal on Repurchase of Some Public Shares", covering a maximum of 12,000 employees.

On July 2nd, Xiaomi Group (01810.HK) announced that its board of directors awarded a total of more than 70 million shares to 3,904 employees according to the share bonus plan. According to the share price of Xiaomi at that time, the value of this share bonus was as high as HK$ 1.8 billion or more. A few days later, it was announced that the first batch of technical experts, middle and high-level core managers and entrepreneurs in the new decade were selected, totaling 122 people, with a reward amount of nearly 2.579 billion yuan and a per capita income of 21.14 million yuan.

However, although the officials announced that they would "send red envelopes" to employees, the equity incentive plans of the two companies are quite different in terms of word of mouth and the direction of the secondary capital market.

Unlike the controversial Gree "half-price" employee stock ownership plan, Xiaomi was envied as "someone else’s company", and many people even left a message "Is Reebs still short of employees?". In the capital market, since the release of the draft equity incentive, Gree Electric’s share price has been ups and downs, and its market value hovers around 300 billion yuan.

Image source: car company official website

In the automobile circle, Great Wall Motor (601633.SH), a leading private automobile company, has an equity incentive plan that is even bigger in scale and intensity. On July 22nd, Great Wall Motor released the 2021 option and restricted stock incentive plan, covering nearly 10,000 incentive targets, involving over 390 million stock options and 34.05 million restricted shares, which is the largest equity incentive plan in its history.

Once the announcement was issued, Great Wall Motor’s share price soared. On July 23rd, Great Wall Motor’s A-share price rose by 7.68% to 54.95 yuan/share, and its total market value exceeded the 500 billion mark, reporting 505.698 billion yuan. In other words, the market value of a trading day rose by over 36 billion yuan.　

Why is the same equity incentive plan, and the plot is so different?

Stock right incentive hides gan Kun

Generally speaking, equity incentive, as one of the most commonly used methods to motivate employees at present, is a long-term incentive mechanism implemented by enterprises to motivate and retain core talents. Equity incentive mainly gives employees some shareholders’ rights and interests through additional conditions, so that they have a sense of ownership, thus forming a community of interests with enterprises, promoting the common growth of enterprises and employees, and helping enterprises achieve the long-term goal of stable development.

However, although they are both equity incentives, the incentive intensity is quite different due to the differences in incentive objects and restrictions of various companies. Some people in the industry said that Gree’s equity incentives focus on management and link management with future performance. The company expects to mobilize the enthusiasm of management and create better performance. The Great Wall and other companies are aimed at the company’s value employees and technical elites, focusing on the binding of their future service time, which is a long-distance running plan.

In fact, as for Gree, according to the draft, although the total number of employees to be involved is no more than 12,000, the maximum number of shares subscribed by Dong Mingzhu, the chairman and president of the company, is 30 million shares, and the maximum amount of proposed capital contribution is 830 million yuan, accounting for 27.68% of the plan. Based on its share price at that time, the increase is expected to make Dong Mingzhu earn 780 million yuan.

At the same time, there are still more controversial issues, that is, there are many conditions for employees to buy 50% off shares, sell them or get profits in the plan. It is reported that after purchasing 50% off shares, ordinary employees can’t exercise the corresponding voting rights according to their own wishes, and they need to retire to continue to enjoy the corresponding share income, and then they can sell shares after retirement.

Immediately, the draft caused an uproar. Some netizens even bluntly said, "Encourage employees not to object, and I don’t want to say 50% off the price, but Dong Mingzhu, who is about to retire, accounts for one-third. Who is this motivating?" The day after the draft employee stock ownership plan was released, Gree Electric closed at 51.11 yuan/share, the lowest in the year. As of that day, the total market value of Gree Electric had dropped by 65.1 billion yuan compared with the beginning of the year.

Image source: car company official website

On the other hand, Great Wall Motor, in terms of scale, its two-phase equity incentive plan has accumulated over 10,000 person-times, covering 50% of its core employees and achieving full coverage of all job levels, business fields and key positions.

In terms of strength, compared with the 50% discount of Gree’s participating employees, the employees who are motivated by Great Wall can buy more shares at least 30% discount. According to the announcement on the 22nd, it is planned to grant 43.184 million restricted shares to the incentive object, accounting for 0.469% of the total shares of the company at the time of the announcement of the draft incentive plan. The grant price of the restricted shares granted for the first time in the incentive plan is 16.78 yuan/share. This price is equivalent to 30% of the latest closing price of A shares of Great Wall Motor, in other words, it is equivalent to about 30% discount on shares.

At the same time, Great Wall Motor shares have high growth. Take last year’s equity incentive plan as an example. According to the announcement of Great Wall Motor in April this year, 23,998,700 restricted shares of the company were listed and circulated on the 27th of that month, accounting for 0.26% of the company’s total share capital, involving a total of 276 incentive targets. Based on the estimation of the A-share price of Great Wall Motor at that time, the floating profit of 276 employees was more than 7 times.　

And such a plan of "real money and silver" to motivate employees not only won a good reputation, but also won unanimous praise from the capital market.

In fact, after the release of the draft incentive plan with greater strength, scale and wider benefits on May 25 this year, Great Wall Motor’s share price once again "sat on the rocket". As of July 23, the share price rose by 93.18% compared with that day, and the total market value rose by more than 181.3 billion yuan in less than two months.

Accelerate the transformation to a global technology travel company

"People are the most important resource of an enterprise. It is employees who create performance, and the system cannot replace the active role of people. " Peter drucker, the father of modern management, once said.

In the industry’s view, equity incentive is not only "interest binding" and "interest incentive", but also plays a role in every level of talent demand: first, it can enable employees to realize their self-worth and gain a sense of accomplishment in making progress; Secondly, gain emotional respect and a sense of belonging and security; Finally, it is the financial return, which can play a comprehensive role in all aspects, and the effect of equity incentive will be the greatest.

The Great Wall’s equity incentive is a perfect combination of material and spiritual incentives. Judging from the performance assessment requirements of Great Wall Incentive Plan, the exercise assessment year of the incentive plan is three fiscal years from 2021 to 2023, and there are certain requirements for sales volume and net profit. Among them, the third exercise period, that is, the company’s automobile sales in 2023 are not less than 2.8 million, and the net profit in 2023 is not less than 11.5 billion yuan. Although it is challenging, it shows Great Wall’s determination to win the future.

Image source: car company official website

Xu Hui, the director-general of Great Wall Motor, recently said at the shareholders’ meeting that this goal is not only based on short-term goals, but also on the challenges of the market and the future development of the industry, and also based on the resources that Great Wall Motor now has, which is a comprehensive consideration. Although the goal is challenging, the company believes that it can still be achieved.

At the same time, the equity incentive plan comparable to Xiaomi further proves the scientific and technological attributes of Great Wall Motor. In fact, equity incentives have increasingly become the norm for technology companies, and under the circumstance that technology giants have cut into the intelligent and electrochemical track, the demand for talents in the fields of electrification, intelligence and autonomous driving has also surged. According to the data report of the first quarter of the recruitment, new energy vehicles are the fastest growing areas of new jobs, with a year-on-year increase of 103%.

Obviously, in the face of a great change in the automobile industry in the past century, only by mastering the core talents can we master the core competitiveness in the future. For listed companies, adopting equity incentives can make employees burst into a strong driving force in a short time, especially for Great Wall Motor, which is running forward on the road of globalization, it will undoubtedly convey stronger confidence in coping with the future internally and externally.

It is understood that the purpose of Great Wall Motor’s incentive plan is to further establish and improve the operating mechanism, establish and improve the incentive and restraint mechanism of the company and its senior managers, middle managers and core technology (business) backbones, form a "community of interests", effectively promote the transformation of employees from "migrant workers" to "partners", and turn "doing work" into "doing business", thus promoting Great Wall Motor to be sustained, steady and rapid in many ways.

In recent years, Great Wall Motor has launched "Ten Thousand Talents Plan" and "Global Talents Living Water Plan" in order to create a fair power and responsibility distribution mechanism, give employees diversified growth opportunities, and make enterprises and individuals more energetic and fighting capacity.

According to the 2025 strategy released by Great Wall Motor a few days ago, the cumulative R&D investment of Great Wall Motor will reach 100 billion yuan in the next five years. By 2023, the number of R&D personnel worldwide will double from the existing 15,000 to 30,000, including 10,000 software developers.

Image source: car company official website

After doing a good job in talent reserve and training, and preparing enough ammunition, Great Wall Motor is accelerating its transformation into a global technology travel company. It is reported that based on the new positioning of "global layout", "R&D investment", "enterprise transformation" and "user operation", Great Wall Motor will carry out comprehensive and thorough innovation and transformation, and achieve the goal of global annual sales of 4 million vehicles in 2025, of which 80% will be new energy vehicles, with operating income exceeding 600 billion yuan. Obviously, Great Wall Motor has a promising future.

　　Beijing, 13 Sept (Li Longyi, Lee Hung Ying) On 13 September, Wu Qian, spokesman of the Ministry of National Defense, made a speech on the 2020 Report on China’s Military and Security Development issued by the US Department of Defense. He said that this is another example of the US smearing and slandering the armies of China and China, and China expresses its strong dissatisfaction and resolute opposition. Facts have proved that the United States is the initiator of regional turmoil, the violator of international order and the destroyer of world peace.

　　Wu Qian said that on September 2nd, Beijing time, the U.S. Department of Defense released the 2020 Report on China’s Military and Security Development, which distorted the military relations between the Communist Party of China (CPC) and China, misinterpreted China’s national defense policy and military strategy, played up the so-called "China’s military threat", talked about China’s national defense and military modernization, and made unwarranted accusations on defense expenditure, nuclear policy, Taiwan Province and other issues. This is another example of the US smearing and slandering the armies of China and China. The publication of such reports by the US for 20 years in a row is a naked hegemonic act and a provocative act, which has seriously damaged the relations between the two countries and their armed forces. China expressed strong dissatisfaction and resolute opposition to this and made solemn representations to the US.

　　Wu Qian said that the China People’s Liberation Army is a people’s army under the leadership of the Communist Party of China. The Constitution of People’s Republic of China (PRC) clearly stipulates that the Communist Party of China (CPC)’s leadership is the most essential feature of Socialism with Chinese characteristics. People’s Republic of China (PRC)’s armed forces belong to the people. Upholding the party’s absolute leadership over the army is the eternal soul of the people’s army. As an armed force founded and led by the Communist Party of China (CPC), the purpose of the China People’s Liberation Army has always been to serve the people wholeheartedly, make great sacrifices for national independence and people’s liberation, and make outstanding contributions to economic construction, coping with major natural disasters and safeguarding people’s lives and property.

　　Wu Qian said that China adheres to the path of peaceful development and firmly pursues a defensive national defense policy and a military strategy of active defense. China’s military development is entirely out of the need to safeguard national sovereignty, security and development interests, and it is not aimed at any country, nor will it pose a threat to any country. The development and construction of weapons and equipment in China always adheres to the principles of independence, self-reliance and independent innovation, and mainly relies on its own strength for research and production. When China’s army went to the world, it brought security, not threats, but opportunities, not challenges. China’s army has always been a staunch force for maintaining world peace. In recent years, it has increasingly carried out overseas military tasks such as peacekeeping, escort and disaster relief. Since the outbreak of the COVID-19 epidemic, China’s armed forces have actively promoted international military cooperation by exchanging letters, exchanging telephone calls, carrying out video exchange of anti-epidemic experience, and providing medical aid, so as to assume the responsibility of a big country and fulfill international obligations with practical actions.

　　Wu Qian said that there is only one China in the world and Taiwan Province is an inalienable part of China. The root cause of the current tension in the Taiwan Strait is that the Democratic Progressive Party authorities are trying to rely on foreign countries’ self-respect and refuse reunification by force, and that external anti-China forces are trying to "control China with Taiwan" and split China. We must solemnly point out that "Taiwan independence" is a dead end. If anyone dares to try to split Taiwan Province from China, the PLA will take all necessary measures to resolutely thwart any attempt or act to interfere in China’s internal affairs and undermine peace and stability in the Taiwan Strait, and resolutely defend national sovereignty and territorial integrity.

　　Wu Qian said that in the past 20 years, the United States has illegally launched wars and military actions against Iraq, Syria, Libya and other countries, resulting in more than 800,000 deaths and tens of millions of people being displaced. The international community has long had a public opinion on this. Instead of reflecting on itself, the United States published a so-called report, which made irresponsible comments on China’s normal national defense and army building, and made irresponsible remarks on China’s legitimate actions to safeguard its sovereignty and security interests. We demand that the US take an objective and rational view of China’s national defense and army building, stop publishing false statements and relevant reports, and take practical actions to safeguard the healthy development of relations between the two countries and their armed forces.

　　Wu Qian said that China’s army will faithfully implement the concept of a community of human destiny, firmly uphold the purposes and principles of the UN Charter, actively carry out regional security cooperation, provide international public safety products in a timely manner, and always be a builder of world peace, a contributor to global development and a defender of the international order.

Recently, a blogger sent a video questioning the lip-synching of some songs in the concert held by the men’s band in Shanghai on November 16th, May. In response to this, the brokerage company said that there was no lip-synching in Mayday’s tour. It is reported that the Law Enforcement Corps of Shanghai Cultural Tourism Bureau attaches great importance to the public opinion of the Mayday concert, and has requested the organizers to cooperate with the investigation in accordance with the Regulations on the Administration of Commercial Performances. At present, the original video and audio of the concert have been submitted to the law enforcement corps, which will be scientifically evaluated and analyzed and the survey results will be published.

Is there lip-synching in the Mayday concert? How to identify lip-synching technically? What are the legal consequences once verified? The Beijing Youth Daily reporter consulted relevant professionals to analyze and interpret the issues that netizens care about.

Bloggers post videos.

Some songs in the Mayday concert were accused of lip-synching.

On November 30th, the blogger Farmer in the Rye released a video saying that by analyzing the audio of 12 singing songs provided by netizens at the Shanghai Stadium concert on November 16th, May, it was found that five of them were lip-synching, including Cheers, Falling in Love, Missing Lover, Writing This Song for You, Don’t Listen to Slow Songs for Sad People, and some songs were actually sung before, followed by lip-synching. Once the video is released, it plays more than one million times. Subsequently, the blogger analyzed the songs of the concert in London, England on November 28th, May, and thought that some songs of the concert were lip-synched.

From November 12th to 14th, November 16th to 18th, and November 20th to 21st, 8 concerts of "I really want to see you" were held in Shanghai Stadium on May Day. The concert tickets were priced at 355 yuan, 655 yuan, 855 yuan, 1055 yuan, 1555 yuan and 1855 yuan, and the number of people attending the eight concerts exceeded 360,000. Subsequently, the series of concerts were held in London, England and Berlin, Germany, respectively. On December 7, the last concert of the series will be held in Paris, France.

On the evening of December 3rd, Mayday’s agent sent a message through the Weibo account of "Believe in Music Bin-Music", saying that the concert to be held in Paris on December 7th will be broadcast live for three hours from 3 am Beijing time on December 8th.

Question 1: Is there lip synching? Brokerage companies deny lip-synching and actively cooperate with relevant investigations.

In response to the question of lip-synching at the Mayday concert, the staff of the Law Enforcement Corps of the Shanghai Cultural Tourism Bureau said that the video of lip-synching identified by online transmission has not been verified yet, and the relevant departments will further verify it.

On the morning of December 4th, the reporter of Beiqing Daily called Mayday’s brokerage company to believe in Music International Co., Ltd. and asked the blogger "Farmer in the Wheat Field" about the lip-synching of Mayday. The staff did not respond to this. The staff said that Mayday’s overseas concert is still going on, and its team is also overseas. "Believe in Music" also has a company in Beijing. If there is any relevant news, it will be announced through official channels. At the same time, the reporter of Beiqing Daily called the Shanghai 12345 hotline as a consumer. The staff said that if you want to complain about lip-synching and refund of the concert, you need to register the concert number, place, ticket purchase channel and order number or mobile phone number of the ticket purchase, which will be forwarded to the relevant departments for follow-up treatment.

Subsequently, I believe that Music Culture Media (Beijing) Co., Ltd. issued a statement saying that there was no lip-synching in Mayday’s tour, and the comments on "lip-synching in Mayday" on the Internet were malicious attacks, rumors and slander, which seriously damaged the artist image of the company. The company is actively cooperating with relevant law enforcement departments to carry out investigations, and I believe relevant departments will give a fair result. The company said that Mayday has been adhering to the theme of "youth, dreams, friendship and love" for 24 years since its debut, and is seriously, persistently and intently committed to presenting the best music to the fans, and will continue to promote the innovation and development of Chinese music in the future. "Please believe in Mayday and music!"

According to Xinhua News Agency, the Law Enforcement Corps of Shanghai Cultural Tourism Bureau has paid attention to the public opinion that the Mayday concert was questioned and lip-synched. In November this year, Shanghai Yunhua Culture Development Co., Ltd. held eight May Day "I really want to see you" concerts in Shanghai Stadium. According to the management mechanism of large-scale commercial performances, during the performance, each performance is supervised by cultural law enforcement staff at the municipal and district levels. The Law Enforcement Corps of the Municipal Bureau of Culture and Tourism attaches great importance to this alleged "lip-synching" sensation, and has requested the organizers to cooperate with the investigation in accordance with the Regulations on the Administration of Commercial Performances. After the relevant situation is verified according to law, it will respond to the concerns of netizens in a timely manner.

According to CCTV news reports, the original video and audio of the "Mayday" concert in Shanghai have been submitted to the Law Enforcement Corps of Shanghai Culture and Tourism Bureau, and the audio and video content provided will be scientifically evaluated and analyzed, and the investigation results will be published.

Question 2: How to identify lip-synching? Identifying lip-synching videos requires certain technical means.

How to define lip-synching The staff of the Shanghai Citizen Service Hotline said that lip-synching refers to lip-synching. If you want to complain about lip-synching, you need to provide a list of specific lip-synching personnel, dates and song titles.

Lawyer Chang Sha of Beijing Kyoto Law Firm believes that "lip-synching" refers to a singer playing a pre-recorded song during a live performance, and matching it with a lip shape that is actually silent. Therefore, if you use rehearsal audio, record audio in a recording studio, and others lip-synch for you, it is all lip-synching. However, the "half-open" singing adopted by some singers during the performance is similar to the original singing in KTV, but the volume of the original singing track is low, and the audience hears a mixed effect, including both the original singing part recorded in advance and the live singing part, which can cover up some problems such as breath and intonation. The singer did sing the whole song live. From the legal point of view, it is hard to say that "half-opening the wheat" is an act of "replacing live singing with pre-recorded songs", and it is hard to be recognized as lip-synching.

Is the appraisal method of the blogger "Farmer in the Wheat Field" scientific? In this regard, the reporter of Beiqing Daily also consulted Feng Jinshuo, a teacher of Music and recording arts College of China Communication University and a member of Electronic Music Society of China Musicians Association. Teacher Feng introduced that from the video released by the "Farmer in the Rye" blogger, the blogger first separated the concert video from the lead singer by artificial intelligence, and then got the dry voice (that is, the voice of the singer singing) after separation, and then put it in the software for pitch analysis for comparison. On the premise that the video of the concert used and the appraisal process are not fraudulent, the technical means used are reasonable.

Teacher Feng believes that it is not reliable to judge whether singing is true or false only by watching videos and listening to sound effects without technical means. In many cases, it is impossible to directly distinguish whether it is lip-synching. "Live singing will have many effects, such as reverberation effect. Some singers pull the wheat when singing, but the effect of the audience’s sound has not changed. This situation may also be related to the effect device. The songs that netizens think are "real singing" and have poor effects may be recorded in the recording studio in advance, and some defects are reserved when the songs are processed, and the sound is not so accurate when being repaired, so as to obtain a more realistic "live feeling". So we can’t directly judge whether it is true or false by watching a video. "

Question 3: What are the legal consequences of lip-synching? If you lip-synch, you may face administrative punishment and compensation for breach of contract.

If lip-synching is verified, what legal responsibilities should Mayday, its brokerage company and concert organizers bear? In this regard, Yue Shenshan, a lawyer from Beijing Yuecheng Law Firm, and Changsha, a lawyer from Beijing Kyoto Law Firm, both believe that if lip-synching is verified, performers, brokerage companies and concert organizers should bear administrative and civil responsibilities, that is, they will face administrative punishment from the management department and compensation for breach of contract to consumers.

Lawyer Chang Sha said that first of all, in terms of administrative responsibility, according to the punishment provisions of the Regulations on the Administration of Commercial Performances, the performance organizer may have its commercial performance license revoked, and the individual actor may have its business license revoked. At the same time, concert organizers and actors may also face a fine of more than 50 thousand yuan and less than 100 thousand yuan. Secondly, in terms of civil liability, concert organizers should compensate consumers for their losses, and the compensation already paid can be recovered from performers and brokerage companies.

If consumers spend money to buy concert tickets but encounter lip-synching, how to protect their rights? Lawyer Chang Sha said that lip-synching may be suspected of fraud if it is identified as false propaganda or commercial fraud, and consumers’ right to know has also been violated. Consumers can first negotiate with the organizers to solve the problem. If they can’t solve it, they can report it to the regulatory authorities through administrative channels. After the facts of lip-synching are confirmed by the relevant departments, consumers can sue for rights protection.

Text/reporter Dai Youqing Intern Tan Danyu Miao Yuning