Summary of the Conference Call Company and Industry Involved - The conference call involved Huayi Brothers and the health industry, specifically focusing on the collaboration with Le Yuan Zhong. Core Points and Arguments - The meeting was hosted by Huayi Brothers' analyst, Qin Jiawei, indicating a focus on strategic insights for investors [1]. - Julia, presumably a key executive, was invited to provide a business update, suggesting a significant emphasis on operational performance and future strategies [1]. Other Important but Possibly Overlooked Content - The presence of investment leaders from the health sector indicates a potential interest in cross-industry collaboration and investment opportunities [1]. - The format of the meeting suggests an interactive approach, allowing for direct engagement between investors and company representatives, which may enhance transparency and investor confidence [1].

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 4,712,107, an increase of 14.4% from RMB 4,119,478 in 2022[18]. - Gross profit for 2023 was RMB 414,698, up from RMB 337,352 in 2022, reflecting a gross margin improvement[18]. - The loss for the year narrowed to RMB 246,707 in 2023 from RMB 1,371,764 in 2022, indicating a significant reduction in losses[18]. - The adjusted loss for the year (non-IFRS measure) was RMB 150,095, an improvement from RMB 258,682 in 2022[18]. - Revenue growth and narrowing losses in 2023 validate the company's strategy of organic growth and quality control in service delivery[38]. - Gross profit increased from approximately RMB337.4 million in 2022 to approximately RMB414.7 million in 2023, representing a year-on-year increase of approximately 22.9%[94]. - Other income and gains rose by approximately 27.1% from approximately RMB60.2 million in 2022 to approximately RMB76.5 million in 2023, primarily due to increased interest income[96]. - Income tax expense decreased by approximately 68.7% from approximately RMB3.3 million in 2022 to approximately RMB1.0 million in 2023[107]. - The adjusted loss for the year 2023 was approximately RMB150.1 million, a significant improvement from the adjusted loss of RMB258.7 million in 2022, representing a reduction of about 42%[117]. Assets and Liabilities - Total assets as of December 31, 2023, were RMB 2,815,040, a decrease from RMB 2,929,554 in 2022[20]. - Total liabilities increased to RMB 1,183,889 in 2023 from RMB 1,095,422 in 2022, reflecting a rise in financial obligations[20]. - Equity attributable to owners of the Company was RMB 1,618,859 in 2023, down from RMB 1,836,901 in 2022[20]. - As of December 31, 2023, the company recorded net current assets of approximately RMB1,300.5 million, with a gearing ratio of approximately 42.1%, up from 37.4% in 2022[121]. - The company had cash and selected financial assets of approximately RMB1,452.3 million as of December 31, 2023[122]. Business Segments - The Specialty Pharmacy Business focuses on specialty medicines for oncology and critical diseases, providing unique services such as medication guidance and delivery[22]. - The company operates a nationwide specialty medicine management platform, differentiating itself from competitors[23]. - Specialty Pharmacy Business revenue increased by 14.4% year-on-year to RMB 4,188,080,000 in 2023[40]. - Physician Research Assistance Business revenue grew by 13.3% year-on-year to RMB 361,781,000 in 2023[40]. - Health Insurance Services Business revenue rose by 17.4% year-on-year to RMB 162,246,000 in 2023[40]. - The company has developed a national network of critical diseases specialists and a national network of medication management to enhance service offerings[36]. - The company’s health management capabilities are integrated into its health insurance products, differentiating it from industry peers[30]. Operational Efficiency - The workforce was optimized from 3,210 employees in December 2022 to 3,096 employees in December 2023[41]. - Selling and marketing expenses decreased by approximately 12.2% from approximately RMB332.9 million in 2022 to approximately RMB292.3 million in 2023[97]. - Administrative expenses decreased significantly by approximately 39.5% from approximately RMB575.0 million in 2022 to approximately RMB347.8 million in 2023, mainly due to reduced share-based payment compensation and the discontinuation of listing expenses[98]. - Research and development expenses decreased by approximately 26.7% from approximately RMB62.7 million in 2022 to approximately RMB45.9 million in 2023, reflecting a reduction in expenditure as prior investments paid off[99]. Strategic Initiatives - Future strategies include expanding the technology platform and enhancing operational capabilities to connect various stakeholders in China's healthcare system[22]. - The company aims to lead the digital transformation of China's healthcare industry by creating an integrated health management network to provide quality and accessible care[157][161]. - The company has established a "dual-drivers" model combining health insurance and healthcare management to enhance product design and manage healthcare expenditures effectively[34]. Corporate Governance - The Company has maintained a minimum public float of 25% as required under the Listing Rules[57]. - The Company has confirmed compliance with listing rules, ensuring no conflicts of interest among directors and management[192]. - The joint company secretaries have over 10 years of professional experience, contributing to the company's governance and compliance efforts[200]. Leadership and Management - The company has a strong leadership team with diverse backgrounds in healthcare and finance[172]. - The management team is well-educated, with degrees from reputable institutions, contributing to strategic decision-making[180]. - Mr. Ma has over 20 years of experience in sales, marketing, and management in the healthcare industry[165]. - Mr. Li has served as the President since March 2020 and has extensive experience in sales management[167]. - Mr. Fan has served as the CFO of Bilibili Inc. since September 2017, with prior experience at NetEase and KPMG[181]. Acquisitions and Investments - The company acquired an additional 45% equity interest in Hubei Siweite Pharmacy for a total cash consideration of RMB3,218,000, completing the acquisition on January 6, 2023[131]. - Following the acquisition, the company holds 80% of the equity interest in Smart Pharmacy, which became a wholly-owned subsidiary after acquiring an additional 20% on July 15, 2023[131]. - There were no significant investments or material acquisitions and disposals of subsidiaries during the reporting period[137][140]. Regulatory Compliance - The Company has adopted new contractual arrangements to comply with PRC laws and regulations regarding the operation of commercial internet information services[60]. - The New Contractual Arrangements are confirmed to fall within the scope of the VIE Waiver, exempting the Company from certain Listing Rules requirements[66].

Investment Rating - The report maintains an "OUTPERFORM" rating for the company with a target price of HKD 11.71, based on a current price of HKD 6.08 [3][11]. Core Insights - The company reported a full-year revenue of CNY 4.712 billion, representing a year-on-year growth of 14.4%. The gross margin was 8.8%, an increase of 0.6 percentage points. The adjusted net loss was CNY 150 million, a reduction of 42%, while the IFRS net loss was CNY 247 million, down 82% [11][12]. - The specialty pharmacy business showed stable revenue growth, with a total income of CNY 4.188 billion, up 14.4%, and a gross margin of 4.7% [12]. - The physician research assistance business (SMO) achieved significant gross margin growth, with revenue of CNY 362 million, up 13.3%, and a gross margin of 31.7%, an increase of 11 percentage points [12]. - The health insurance services business experienced rapid revenue growth, totaling CNY 162 million, up 17.4%, with a stable gross margin of 64.2% [12]. - The company anticipates continued organic growth in 2024, particularly in the health insurance sector, which is expected to focus on cost reduction and efficiency improvements [12][13]. Financial Projections - Revenue projections for 2024-2026 are adjusted to CNY 5.468 billion, CNY 6.293 billion, and CNY 7.185 billion, with year-on-year growth rates of 16%, 15%, and 14% respectively. The net income attributable to shareholders is projected to be -CNY 73 million, CNY 42 million, and CNY 106 million for the same period [13][8]. - The specialty pharmacy business is expected to generate revenues of CNY 4.845 billion, CNY 5.564 billion, and CNY 6.344 billion from 2024 to 2026, with growth rates of 16%, 15%, and 14% [13]. - The SMO business is projected to achieve revenues of CNY 420 million, CNY 478 million, and CNY 536 million, with growth rates of 16%, 14%, and 12% [13]. - The health insurance services business is expected to grow to CNY 203 million, CNY 250 million, and CNY 305 million, with growth rates of 25%, 23%, and 22% [13]. Valuation - The company is valued at CNY 82.02 billion based on a price-to-sales (PS) ratio of 1.5 times the 2024 revenue forecast, leading to a target price of HKD 11.71 [13].

Revenue and Profitability - Revenue for the year ended December 31, 2023, reached RMB 4,712,107 thousand, representing a 14.4% increase from RMB 4,119,478 thousand in 2022[2] - The adjusted net loss for 2023 was RMB (150,095) thousand, a 42.0% improvement compared to RMB (258,682) thousand in 2022[3] - Gross profit increased to RMB 414,698 thousand, reflecting a 22.9% growth from RMB 337,352 thousand in the previous year[2] - The specialty pharmacy business generated revenue of RMB 4,188,080 thousand, up 14.4% from RMB 3,661,809 thousand in 2022[2] - The health insurance services segment reported a revenue increase of 17.4%, reaching RMB 162,246 thousand compared to RMB 138,220 thousand in 2022[2] - Gross profit for 2023 was approximately RMB 414.7 million, a year-on-year increase of about 22.9% from RMB 337.4 million in 2022, with a slight increase in gross margin from 8.2% to 8.8%[29] - The health insurance services business generated revenue of RMB 162,246 thousand, an increase from RMB 138,220 thousand in 2022, representing a growth of approximately 17.4%[73] Expenses and Cost Management - Research and development expenses decreased by 21.9% to RMB 44,901 thousand, accounting for 1.0% of total revenue[2] - Selling and marketing expenses decreased by approximately 12.2% to about RMB 292.3 million in 2023, down from RMB 332.9 million in 2022[31] - Administrative expenses significantly reduced by approximately 39.5% to about RMB 347.8 million in 2023, compared to RMB 575.0 million in 2022, mainly due to a decrease in share-based payment expenses and cessation of listing expenses[32] - Research and development expenses decreased to RMB 45,947 thousand from RMB 62,650 thousand, showing a reduction of about 26.7%[56] - Total sales costs increased by approximately 13.6% to RMB 4,297.4 million in 2023 from RMB 3,782.1 million in 2022[28] Financial Position and Assets - Cash and specific financial assets totaled RMB 1,452,315 thousand, a decrease of 9.6% from RMB 1,606,770 thousand in 2022[3] - As of December 31, 2023, the company recorded a net current asset value of approximately RMB 1,300.5 million, with a debt-to-asset ratio of about 42.1%[39] - Total assets as of December 31, 2023, were RMB 2,815,040 thousand, compared to RMB 2,929,551 thousand in 2022, indicating a decrease of approximately 3.9%[58] - The company's cash and cash equivalents decreased significantly to RMB 495,425 thousand from RMB 1,455,454 thousand, a decline of about 66.0%[58] Shareholder and Corporate Governance - The company maintained the minimum public float of 25% as required under the listing rules as of the announcement date of the annual results[17] - The company has not adopted a dividend policy and plans to retain most of its available funds for business development and growth[91] - The company’s governance structure adheres to the corporate governance code, with a commitment to maintaining high standards of accountability and shareholder value[91] - The board of directors includes both executive and independent non-executive members, ensuring diverse governance[98] Strategic Initiatives and Future Plans - The company is establishing a "dual-engine" model combining health insurance and medical health management to enhance customer base and service quality[8] - The company aims to lead the digital transformation of the healthcare industry in China, establishing a comprehensive health management network to provide quality and accessible medical services[50] - The company plans to utilize approximately HKD 104.8 million for business expansion, including further development of specialty pharmacy and health insurance services[53] - The company is focused on expanding its market presence in mainland China, excluding Hong Kong, Macau, and Taiwan[97] Compliance and Regulatory Matters - The company has confirmed compliance with the standards set forth in the Securities Trading Code during the reporting period[93] - The company is committed to compliance with international financial reporting standards[98] - The company has made adjustments to its ownership structure in compliance with Chinese regulations, with Beijing Sipai Health Technology Co., Ltd. acquiring a 50% stake in Beijing Sipai Network[19] Employee and Workforce Management - The company optimized its workforce from 3,210 employees as of December 31, 2022, to 3,096 employees as of December 31, 2023, while achieving double-digit growth in revenue and gross profit[12] - As of December 31, 2023, the company had 3,096 employees, with a focus on competitive and fair compensation policies[49] Market and Operational Insights - The company operates 95 specialty pharmacies in mainland China, focusing on innovative drugs for cancer and other critical illnesses[5] - The company provides clinical trial-related services through its SMO, which has sufficient infrastructure and personnel[98] - The company is actively involved in clinical trial management to support medical device companies[98]

Financial Performance - Sipai Health Technology Co., Ltd. reported a significant increase in revenue, achieving a total of $50 million for the first half of 2023, representing a 25% growth compared to the same period last year[3]. - Revenue for the six months ended June 30, 2023, increased by approximately 29.2% to approximately RMB 2,437.96 million compared to the same period last year[10]. - The total revenue for the company for the six months ended June 30, 2023, was approximately RMB 2,437.96 million, a 29.2% increase from approximately RMB 1,887.65 million for the same period in 2022[25]. - The Group reported a loss before tax of RMB 86,698 for the six months ended June 30, 2023, compared to a loss of RMB 344,441 in the same period of 2022, showing an improvement in financial performance[142]. - The loss attributable to ordinary equity holders of the parent was RMB 92,321,000 for the six months ended June 30, 2023, a significant improvement from RMB 346,327,000 in the prior year[163]. - The basic loss per share for the period was RMB 0.14, compared to RMB 3.50 for the same period in 2022, indicating a reduction in loss per share[163]. - The company reported a loss of RMB 92,321,000 for the period, compared to a loss of RMB 346,327,000 in the same period of the previous year[125]. - The total comprehensive expense for the period was RMB 75,980, a significant improvement compared to RMB 738,181 in the same period last year[114]. User Growth and Market Expansion - The company has expanded its user base to 1.2 million active users, marking a 30% increase year-over-year[3]. - Future outlook indicates a projected revenue growth of 20% for the second half of 2023, driven by new product launches and market expansion strategies[3]. - The company plans to enter two new markets in Southeast Asia by the end of 2023, which is expected to contribute an additional $5 million in revenue[3]. Research and Development - Sipai Health is investing $10 million in research and development for new technologies aimed at enhancing user experience and product offerings[3]. - Research and development expenses for the six months ended June 30, 2023, were RMB 23,863, indicating ongoing investment in innovation and product development[142]. Operational Efficiency - The gross profit margin improved to 45%, up from 40% in the previous year, reflecting better cost management and pricing strategies[3]. - The company has launched a new telehealth service, which has already attracted 100,000 users within the first month of its introduction[3]. - Sipai Health's operating expenses increased by 15% due to investments in marketing and technology, but the company remains committed to maintaining profitability[3]. - Selling and marketing expenses decreased by 4.6% to RMB 150,969, representing 6.2% of revenue for the six months ended June 30, 2023[8]. - Administrative expenses significantly decreased by approximately 30.5% from about RMB 252.33 million to about RMB 175.38 million, mainly due to staff cost reductions and the discontinuation of listing expenses[40]. Shareholder Information - As of June 30, 2023, the company had issued a total of 763,025,314 shares[71]. - The total shareholding interests reflect a concentrated ownership structure, with the top shareholders holding substantial percentages of the company's equity[79][80]. - The company operates employee incentive platforms through its subsidiaries incorporated in the BVI[72]. Cash Flow and Financial Position - The net cash flows used in operating activities for the six months ended June 30, 2023, was approximately RMB 145.98 million[52]. - The company had cash and cash equivalents amounting to approximately RMB 434.75 million as of June 30, 2023, along with total financial assets at fair value through profit or loss of approximately RMB 1,492.34 million[52]. - The company reported a net cash outflow from investing activities of RMB (866,762) thousand for the first half of 2023, compared to a net inflow of RMB 1,056,987 thousand in the prior year[128]. - Cash and cash equivalents at the end of the period were RMB 434,751 thousand, down from RMB 1,366,423 thousand at the end of June 2022[129]. Corporate Governance - The Company has complied with all applicable code provisions of the Corporate Governance Code during the reporting period, with some deviations noted[63]. - The roles of chairman and chief executive are held by the same individual, Mr. MA Xuguang, which the Board believes does not impair the balance of power and authority[63]. - The Board will continue to review the effectiveness of the corporate governance structure to assess whether separation of the roles of chairman and chief executive officer is necessary[63]. Segment Performance - Specialty Pharmacy Business revenue for the six months ended June 30, 2023, was RMB 2,437,956, a 29.2% increase from RMB 1,887,652 in the same period last year[8]. - The Physician Research Assistance Business generated segment revenue of RMB 170,506, compared to RMB 149,154 in the previous year, marking an increase of about 14%[148]. - Health Insurance Services Business reported segment revenue of RMB 108,693, up from RMB 92,110 in the same period last year, representing an increase of approximately 18%[148].

Revenue Growth - Revenue for the six months ended June 30, 2023, increased by 29.2% to approximately RMB 2,437.96 million compared to RMB 1,887.65 million for the same period in 2022[2] - The specialty pharmacy business generated revenue of RMB 2,158.76 million, reflecting a growth of 31.1% year-on-year[2] - The health insurance services business reported revenue of RMB 108.69 million, an 18.0% increase compared to RMB 92.11 million in the previous year[2] - Total revenue for the company reached approximately RMB 2,437.96 million, reflecting a year-on-year increase of about 29.2% from RMB 1,887.65 million[9] - Revenue for the six months ended June 30, 2023, was RMB 2,437,956 thousand, representing an increase of 29.1% compared to RMB 1,887,652 thousand for the same period in 2022[32] - The revenue breakdown includes RMB 2,158,757 thousand from the specialty pharmacy business, RMB 170,506 thousand from physician research assistance, and RMB 108,693 thousand from health insurance services[42][47] Profitability and Loss - Adjusted net loss for the six months ended June 30, 2023, decreased by 76.8% to RMB 33.19 million from RMB 143.11 million in the previous year[2] - Gross profit for the period was RMB 218.09 million, representing a 23.3% increase from RMB 176.94 million in the same period last year[2] - The gross margin slightly decreased to approximately 8.9% from 9.4% in the previous year, primarily due to an increase in lower-margin wholesale business[14] - The company reported a net loss of RMB 87,307 thousand for the six months ended June 30, 2023, compared to a net loss of RMB 345,987 thousand for the same period in 2022, reflecting a significant reduction in losses[32] - The group recorded a loss before tax of RMB 86,698 thousand for the six months ended June 30, 2023, compared to a loss of RMB 344,441 thousand for the same period in 2022, showing a significant reduction in losses[42][44] - The group reported a loss attributable to ordinary equity holders of the parent of RMB (92,321) thousand for the six months ended June 30, 2023, compared to a loss of RMB (346,327) thousand for the same period in 2022, indicating a significant improvement[55] - The basic loss per share for the six months ended June 30, 2023, was RMB (0.14), compared to RMB (3.50) for the same period in 2022, reflecting a reduction in loss per share[55] Expenses and Cost Management - Research and development expenses decreased by 32.9% to RMB 22.22 million, accounting for 0.9% of total revenue[2] - Sales and marketing expenses decreased by approximately 5.3% to about RMB 152.05 million from RMB 160.61 million for the same period last year[15] - Administrative expenses significantly reduced by approximately 30.5% to about RMB 175.38 million from RMB 252.33 million, attributed to improved efficiency and reduced costs[16] - Research and development expenses decreased by approximately 30.4% to about RMB 23.86 million from RMB 34.29 million, reflecting the effectiveness of prior investments[17] - The total operating expenses for the period included sales and marketing expenses of RMB 152,050 thousand, administrative expenses of RMB 175,380 thousand, and R&D expenses of RMB 23,863 thousand[42] Financial Position - Cash and cash equivalents, along with specific financial assets, totaled RMB 1,492.34 million, up from RMB 1,444.72 million in the previous year[2] - As of June 30, 2023, the net current assets amounted to approximately RMB 1,441.59 million, with a debt-to-asset ratio of approximately 38.5%, up from 37.4% as of December 31, 2022[22] - Total cash and cash equivalents as of June 30, 2023, were approximately RMB 434.75 million, along with other financial products totaling approximately RMB 1,492.34 million[23] - The total current assets as of June 30, 2023, were RMB 2,535,779 thousand, a decrease from RMB 2,695,335 thousand as of December 31, 2022[34] - The total liabilities as of June 30, 2023, were RMB 1,811,577 thousand, slightly down from RMB 1,834,132 thousand as of December 31, 2022[35] Corporate Governance and Compliance - The company has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions, except for the separation of the roles of Chairman and CEO, which are held by Mr. Ma Xuguang[62] - The company has not adopted a dividend policy as it intends to retain most, if not all, available funds for business development and growth[62] - The board believes that having the same person serve as both Chairman and CEO ensures consistent leadership and effective strategic planning[62] - The company has confirmed compliance with the standards of conduct for securities trading during the reporting period[63] - The independent auditor has reviewed the interim financial information in accordance with the relevant standards[65] Shareholder Actions - The company repurchased a total of 420,000 shares for a total amount of HKD 3,192,840 between July 21 and July 28, 2023[28] - The net proceeds from the global offering amounted to approximately HKD 120.4 million after deducting professional fees and related expenses[29]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 4,119,478, an increase of 18.6% from RMB 3,473,930 in 2021[20] - Gross profit for 2022 was RMB 337,352, up from RMB 283,449 in 2021, reflecting a gross margin improvement[20] - The loss for the year narrowed to RMB 1,371,764 in 2022 from RMB 3,748,503 in 2021, indicating a significant reduction in losses[20] - Adjusted loss for the year (non-IFRS measure) was RMB 258,682, compared to RMB 365,084 in 2021, showing improved operational efficiency[20] - Total revenue for the company reached approximately RMB 4,119.5 million in 2022, reflecting an 18.6% year-on-year growth from RMB 3,473.9 million in 2021[70] - The cost of sales increased by approximately 18.5% from approximately RMB 3,190.5 million in 2021 to approximately RMB 3,782.1 million in 2022, primarily due to increased procurement costs for medicines and labor costs[78] - Other income and gains rose by approximately 17.8% from approximately RMB 51.1 million in 2021 to approximately RMB 60.2 million in 2022, driven by increases in bank interest income and government grants[85] - Selling and marketing expenses increased by approximately 14.2% from approximately RMB 291.5 million in 2021 to approximately RMB 332.9 million in 2022, mainly due to higher staff costs[87] - Administrative expenses decreased by approximately 14.2% from approximately RMB 670.0 million in 2021 to approximately RMB 575.0 million in 2022, attributed to a reduction in staff costs[89] - Research and development expenses increased by approximately 5.9% from approximately RMB 59.2 million in 2021 to approximately RMB 62.7 million in 2022, primarily due to higher staff costs[90] Assets and Liabilities - Total assets as of December 31, 2022, were RMB 2,929,554, slightly up from RMB 2,892,819 in 2021[21] - Total liabilities decreased significantly to RMB 1,095,422 in 2022 from RMB 8,323,729 in 2021, indicating improved financial health[21] - Equity attributable to owners of the Company improved to RMB 1,836,901 in 2022 from a deficit of RMB 5,429,224 in 2021[21] - As of December 31, 2022, the company recorded net current assets of approximately RMB 1,640.0 million, with a gearing ratio of 37.4%, a substantial decrease from 287.7% in 2021[112] - The company had cash and cash equivalents of approximately RMB 1,455.5 million as of December 31, 2022, which is expected to satisfy future liquidity requirements[113] Business Operations - The company operates three business lines: specialty pharmacy, physician research assistance, and health insurance services, leveraging a robust technology platform[35] - In 2022, approximately 12.5 million Hui Min Insurance policies were sold, alongside over 400,000 annual enterprise health plans[41] - The company maintains a 100% retention rate for its top 10 SMO clients, measured by revenue, and collaborates with over 280 pharmaceutical and biotech clients[37] - The company has achieved 100% coverage of 27 provincial specialized oncology hospitals and 5 national cancer treatment centers, with over 55,000 doctors across 1,200 Class III Grade A hospitals nationwide[40] - The company aims to lower out-of-pocket medical costs while improving health conditions and healthcare service experiences for its members[31] - The company is committed to acquiring more members through scientific planning and careful management of premiums and medical expenses[31] - The company completed 468 SMO projects and had 795 ongoing projects as of December 31, 2022, maintaining a 100% client retention rate with top ten SMO clients[46][49] - The health service provider network connected over 1,200 Class III Grade A hospitals and 55,000 doctors across more than 150 major cities in China[50][53] Market Presence and Strategy - The Company aims to enhance its market presence through new product development and strategic partnerships in the health technology sector[24] - Future outlook includes a focus on expanding user data analytics capabilities to drive growth and improve service offerings[24] - The company is focused on expanding its market presence and developing new technologies in the healthcare sector[157] - The leadership team emphasizes the importance of strategic partnerships and acquisitions to drive growth[159] - The company aims to expand brand recognition and customer loyalty through strategic marketing and partnerships with medical institutions and pharmaceutical companies[61] - The three business lines—Specialty Pharmacy, Physician Research Assistance, and Health Insurance Services—create a symbiotic ecosystem that enhances customer traffic and business opportunities across segments[63] Corporate Governance and Leadership - The company is committed to maintaining high standards of corporate governance and financial transparency[168] - The company has a strong leadership team with extensive backgrounds in finance and investment, including Mr. Yao and Mr. Zhang, who have experience in major financial institutions[159][162] - The board includes members with significant academic and professional credentials, contributing to informed decision-making[173] - The company confirms that all directors do not hold any long or short positions in the shares or debentures of the company or any associated corporation[177] - There are no relationships between the directors and senior management or substantial shareholders that require disclosure[178] - All directors confirm they do not have any interests in businesses that compete with the company's business[178] Significant Events - The Company was listed on the Main Board of the Stock Exchange on December 23, 2022, marking a significant milestone[22] - The company disposed of its online hospital service on September 15, 2022, to improve operational efficiency and focus on core businesses[114] - On January 6, 2023, the company acquired an additional 45.00% equity interest in Smart Pharmacy for a total cash consideration of RMB3,218,000, increasing its ownership to 80.0%[141][144] - The principal place of business in Hong Kong has been changed to 14/F, Golden Centre, 188 Des Voeux Road Central, Hong Kong[150] - The company has appointed Ms. Li as the Joint Company Secretary and Authorized Representative effective March 13, 2023[150] - There were no significant events after the reporting period that require additional disclosures or adjustments[148] Employee and Workforce Management - The workforce size was optimized from 3,859 as of December 31, 2021, to 3,210 as of December 31, 2022, indicating a focus on operational efficiency[55] - As of December 31, 2022, the company employed a total of 3,210 employees, primarily in China, and maintains a competitive remuneration policy[131] - The company maintains competitive and fair compensation policies, conducting annual performance evaluations for employees[137] Research and Development - The company is focused on improving technology and digital infrastructure to support its operations and services across its business segments[59] - The company has established a national specialty drug management platform, enhancing its service offerings and differentiating it from peers[48] - The company has established the first and only nationwide specialty medicine management platform, offering follow-up assessment services under a unified system[200]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 4,119,478 thousand, representing an 18.6% increase from RMB 3,473,930 thousand in 2021[2] - Gross profit for the same period was RMB 337,352 thousand, reflecting a 19.0% increase compared to RMB 283,449 thousand in the previous year[2] - The net loss for the year was RMB (1,371,764) thousand, a 63.4% improvement from a net loss of RMB (3,748,503) thousand in 2021[2] - Adjusted net loss (non-IFRS measure) for the year was RMB (258,682) thousand, down 29.1% from RMB (365,084) thousand in the prior year[2] - Total revenue for 2022 reached approximately RMB 4,119.5 million, an increase of 18.6% compared to RMB 3,473.9 million in 2021[14] - The specialty pharmacy business generated revenue of RMB 3,661.8 million, up 16.7% from RMB 3,136.5 million in 2021, driven by an increase in store count from 91 to 96[15] - Revenue from the physician research assistance business rose by 30.5% to RMB 319.4 million, compared to RMB 244.9 million in 2021[16] - Health insurance services revenue surged by 49.3% to RMB 138.2 million, up from RMB 92.6 million in 2021, due to the expansion of corporate client business and new health insurance plans in various cities[16] - The gross margin for the specialty pharmacy business decreased slightly to 5.0% in 2022 from 5.9% in 2021, offset by an increase in the gross margin for health insurance services to 63.5%[18] - The basic and diluted loss per share for the year was RMB 12.19, down from RMB 37.61 in 2021, indicating improved performance on a per-share basis[41] Operational Efficiency - The company operates 96 specialty pharmacies across all provincial-level administrative regions in mainland China, excluding Tibet and Qinghai[6] - The company has completed 468 SMO projects and has 795 ongoing SMO projects, maintaining a 100% client retention rate among the top ten SMO clients[7] - The health service provider network connects over 1,200 tertiary hospitals, 55,000 doctors, and 500 health check institutions across more than 150 major cities in China[8] - The company optimized its workforce from 3,859 employees at the end of 2021 to 3,210 employees by the end of 2022, enhancing operational efficiency[10] - The company sold its internet hospital services on September 15, 2022, to improve operational efficiency and focus on core business[30] Financial Position - As of December 31, 2022, the net current assets were approximately RMB 1,640.0 million, with a debt-to-asset ratio of approximately 37.4%[29] - Cash and cash equivalents as of December 31, 2022, were approximately RMB 1,455.5 million[29] - Total assets as of December 31, 2022, amounted to RMB 2,929,554 thousand, compared to RMB 2,892,819 thousand in 2021, showing a slight increase[42] - Cash and cash equivalents increased to RMB 1,455,454 thousand in 2022 from RMB 535,849 thousand in 2021, indicating improved liquidity[42] - The company’s non-current liabilities decreased significantly to RMB 40,080 thousand in 2022 from RMB 7,492,929 thousand in 2021, primarily due to the elimination of convertible redeemable preferred shares[44] - The company had contract liabilities totaling RMB 901,000,000 as of December 31, 2022, down from RMB 992,000,000 in 2021[60] Cost Management - Sales and marketing expenses increased by approximately 14.2% from RMB 291.5 million in 2021 to RMB 332.9 million in 2022, primarily due to an increase in employee costs related to specialty pharmacy business[21] - Administrative expenses decreased by approximately 14.2% from RMB 670.0 million in 2021 to RMB 575.0 million in 2022, mainly due to a reduction in employee costs resulting from functional adjustments and improved administrative efficiency[22] - Research and development expenses increased by approximately 5.9% from RMB 59.2 million in 2021 to RMB 62.7 million in 2022, primarily due to an increase in employee costs[23] - The total cost of goods sold for 2022 was RMB 3,478,464,000, an increase from RMB 2,942,987,000 in 2021[61] - The company’s employee costs (excluding directors and highest paid executives) totaled RMB 599,295,000 in 2022, slightly up from RMB 581,953,000 in 2021[61] Strategic Initiatives - The company emphasizes organic growth strategies, maintaining service quality control across standardized professional services[9] - The business model has demonstrated resilience and adaptability in response to challenges posed by the COVID-19 pandemic[9] - The company aims to lead the digital transformation of the healthcare industry in China, establishing a comprehensive health management network[34] - The company is focused on enhancing its technology and digital infrastructure to support operations and improve data processing and analysis capabilities[11] - The planned use of the net proceeds includes 87% for business expansion, with specific allocations for expanding specialty pharmacy operations (35% or HKD 42,200,000), doctor research assistance (28% or HKD 33,700,000), and health insurance services (24% or HKD 28,900,000)[38] Corporate Governance - The company has adopted the Corporate Governance Code as per the Stock Exchange Listing Rules and has complied with all applicable provisions during the reporting period, except for specific deviations noted[81] - The company plans to hold at least four board meetings annually, approximately once per quarter, in accordance with the Corporate Governance Code[82] - The company has not conducted any board meetings from its listing date on December 23, 2022, to December 31, 2022, due to its recent public listing[82] - The company will issue a detailed corporate governance report in its 2022 annual report, explaining its governance structure and application of the Corporate Governance Code[82] - The audit committee, along with the board and external auditors, reviewed the accounting standards and practices adopted by the group for the year ending December 31, 2022[84]