As of the end of 2016, the Company had a total of five subordinate pharmaceutical companies, including three production enterprises, one sales enterprise and one research and development enterprise. The pharmaceutical sector achieved an operating income of 627 million CNY as a whole, and its proportion in the Group's operating income was further improved.
Among the pharmaceutical companies, Haixin Pharmaceutical and Gannan Haixin have been listed in the new three boards, and the corporate quality is good. In 2016, Haixin Pharmaceutical achieved an annual operating income of 455 million CNY, and a net profit of 6.11 million CNY (The Company's consolidated net profit was 3.137 million CNY by the investment proportion). In 2016, Gannan Haixin achieved an annual operating income of 103 million CNY, and a net profit of 11.771 million CNY (The Company's consolidated net profit was 7.251 million CNY by the investment proportion). In 2016, Suzhong Pharmaceutical achieved an annual profit of 51.8 million CNY (The Company's consolidated net profit was 12.951 million CNY by the investment proportion).
In 2016, Haixin Pharmaceutical adhered to the principle of "Steady progress, Driven by innovation", and strived to build effective risk prevention and control mechanisms, and constantly improved the management system and internal control management system. In 2016, the Company successfully passed a total of seven inspections carried out by the drug regulatory department, including the new version GSP flight Inspection, special inspection, sampling and daily inspection. In 2016, the Company actively participated in the GPO competition in the Shanghai pharmaceutical market, and strived to expand the successful bidding rate of GPO products. In the whole year, it participated in three batches of GPO competitive bidding, and 84 commodities had been selected. After the introduction of the "Two-vote system", although the Company was faced with the situation that sales channel gradually was compressed and merged, the Company's management layer actively planned the layout, expanded business channels, and tried to minimize the adverse effects.
In 2016, Gannan Haixin's annual asset quality was further improved, and its assets ability to realization and short-term solvency were enhanced and had good ability to continue the operation. The Company's "new construction project of overall relocation" was progressing smoothly. As of the end of 2016, the construction of major projects, such as factory building, and research office building, had been completed. The tendering work of installation works including major equipment, technology and pipeline, and fire engineering project had been completed. In the year, the investment in the projects was 32.64 million CNY. During the reporting period, two-period shares were issued to the core employees, a total of 10 million shares were issued and 10.3 million CNY was raised. Enterprise development can be expected.
Phase Ⅲ clinical trials of Haixin biological APDC project were promoting according to the plan. In 2016, 19 subjects were randomly assigned. 13 hospitals from the 16 hospitals proposed to participate in Phase III clinical trials received ethical approval, 11 hospitals signed a clinical study contracts, 8 hospitals held a clinical kick-off meeting, and 6 hospitals achieved the cases into the group. As of the annual report disclosure date, 22 cases had entered the group of the project.