Financial Performance - Revenue for the six months ended June 30, 2023, was approximately $31.4 million, a decrease of 1.9% compared to $32.0 million for the same period in 2022[11]. - Gross profit for the same period was about $20.5 million, down 6.4% from $21.9 million in 2022, primarily due to rising raw material costs[11][13]. - Operating profit decreased by 17.8% to approximately $7.5 million from $9.2 million in the previous year, influenced by increased selling expenses[11][13]. - Profit attributable to owners of the Company was approximately $5.6 million, a decline of 17.4% compared to $6.8 million in the prior year[11][13]. - Gross profit margin decreased to 65.4% from 68.6% in the previous year, reflecting the impact of rising costs[11]. - The pharmaceutical segment recorded revenue of approximately US$30.7 million for the first half of 2023, a decrease of approximately 0.9% compared to US$31.0 million in the same period last year[17]. - The profit for the period amounted to approximately US$5.6 million, representing a decrease of approximately 17.4% compared to US$6.8 million in the same period last year[16]. - Total comprehensive income for the period was $2,132,000, compared to $1,780,000 for the same period in 2022, indicating an increase[144]. Assets and Liabilities - Total assets as of June 30, 2023, were $174.975 million, a decrease of 4.9% from $183.958 million at the end of 2022[11]. - Total liabilities decreased by 17.2% to $51.335 million from $62.008 million at the end of 2022[11]. - Cash and bank balances were approximately $74.796 million, down 2.0% from $76.305 million at the end of 2022[11]. - The Group's net current assets were approximately US$76.3 million as of June 30, 2023, compared to approximately US$72.5 million as of December 31, 2022, with a current ratio of 2.5[68]. - The Group's borrowings as of June 30, 2023, were approximately US$17.6 million, down from approximately US$18.2 million as of December 31, 2022, all repayable within one year[70]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $46,385,000 from $51,326,000, indicating a reduction in liquidity[148]. - The net decrease in cash and cash equivalents for the period was US$3,704,000, compared to an increase of US$22,089,000 in the same period last year[162]. - Cash flows from investing activities resulted in a net cash outflow of US$4,521,000, contrasting with a net cash inflow of US$2,774,000 in the prior year[162]. - Cash flows from financing activities showed a net cash outflow of US$642,000, compared to a net cash inflow of US$2,263,000 in the previous year[162]. Research and Development - Research and development costs for the period were $1,050,000, up from $959,000 in the previous year, indicating increased investment in R&D[142]. - The Group is focusing on strengthening research and development in rheumatology and dermatology, with significant progress in the core product Pafulin total glucosides of white peony capsules and the resumption of production for over 20 medicine products expected in the second half of 2023[48]. Market Strategy and Operations - The company continues to focus on expanding market channels and product coverage while optimizing raw material supply and production processes to reduce costs[26]. - The Group aims to expand its product coverage network through collaboration with branded distributors, maintaining product pricing and providing professional sales support to enhance distributor sales efficiency[31]. - The Group is implementing measures to reduce costs and improve production efficiency in response to rising raw material and labor costs, while also focusing on ESG strategies for sustainable development[38]. - The Group plans to explore business development opportunities in the ASEAN market and expects to complete product registration with a Korean supplier by 2024[51][60]. Shareholder and Corporate Governance - The interests of substantial shareholders included Cathay International Pharma with a beneficial interest of 217,281,593 shares, representing 51.82% of the issued share capital[102]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2023[118]. - The company has complied with the Corporate Governance Code during the reporting period[126]. - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2023[128]. Employee and Training - The total employee costs for the six months ended June 30, 2023, were approximately US$9,134,000, reflecting competitive salary levels[86]. - The Group encourages staff participation in training programs related to its business, enhancing career advancement opportunities[91].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生或因 倚賴該等內容而引致之任何損失承擔任何責任。 LANSEN PHARMACEUTICAL HOLDINGS LIMITED 朗生醫藥控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：503） 截至二零二三年六月三十日止六個月 中期業績公佈 財務摘要 截至 截至 二零二三年 二零二二年 六月三十日止 六月三十日止 | --- | --- | --- | --- | |----------------------|--------------|--------------|--------| | | 六個月 | 六個月 | 變動 | | | （未經審核） | （未經審核） | | | 業績（千美元）： | | | | | 收入 | 31,386 | 31,991 | -1.9% | | 毛利 | 20,540 | 21,936 | -6.4% | | 經營溢利 | 7,536 | 9,167 | -17.8% | | 除所得稅前溢利 | 6,7 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生 或因倚賴該等內容而引致之任何損失承擔任何責任。 LANSEN PHARMACEUTICAL HOLDINGS LIMITED 朗生醫藥控股有限公司 (於開曼群島註冊成立之有限公司) (股票代號: 503) 有關二零二二年年報之補充公告 茲提述朗生醫藥控股有限公司（「本公司」，連同附屬公司統稱「本集團」）於二零二 三年四月二十日刊發的截至二零二二年十二月三十一日止年度的年報（「二零二二年年 報」）。除文義另有所指外，本公告所用詞彙與二零二二年年報所用詞彙具有相同涵 義。 本公司謹就二零二三年四月二十日完成的根據一般授權配售49,520,000股新股（「配 售」）提供以下補充資料。本補充公告應當與二零二二年年報一併閱讀。 集資 配售之理由 誠如本公司日期為二零二二年四月七日的公告所披露，配售的原因是為本集團的業務發展 籌集額外資金，因為本公司擬將配售所得款項淨額用作 (i) 潛在的未來並購或項目，及 (ii) 補充營運資金和一般企業用途，以支持本公司的策略 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生 或因倚賴該等內容而引致之任何損失承擔任何責任。 LANSEN PHARMACEUTICAL HOLDINGS LIMITED 朗生醫藥控股有限公司 (於開曼群島註冊成立之有限公司) (股票代號: 503) 有關二零二二年年報之補充公告 茲提述朗生醫藥控股有限公司（「本公司」，連同附屬公司統稱「本集團」）於二零二 三年四月二十日刊發的截至二零二二年十二月三十一日止年度的年報（「二零二二年年 報」）。除文義另有所指外，本公告所用詞彙與二零二二年年報所用詞彙具有相同涵 義。 本公司謹就二零二三年四月二十日完成的根據一般授權配售49,520,000股新股（「配 售」）提供以下補充資料。本補充公告應當與二零二二年年報一併閱讀。 集資 配售之理由 誠如本公司日期為二零二二年四月七日的公告所披露，配售的原因是為本集團的業務發展 籌集額外資金，因為本公司擬將配售所得款項淨額用作 (i) 潛在的未來並購或項目，及 (ii) 補充營運資金和一般企業用途，以支持本公司的策略 ...

Financial Performance - Revenue for 2022 increased by 21.0% to US$65.558 million from US$54.180 million in 2021[12] - Gross profit rose by 28.7% to US$44.295 million, resulting in a gross profit margin of 67.6%[12] - Profit for the year surged by 852.0% to US$8.597 million, with a net profit margin increasing to 13.1%[30] - Profit before income tax increased by 312.4% to US$9.915 million compared to US$2.404 million in 2021[12] - Operating profit saw a substantial increase of 154.7% to US$14.158 million[12] - The basic earnings per share rose to 2.12 US cents from 0.23 US cents, marking a significant increase[12] - Revenue for the year ended December 31, 2022, increased to $65,558,000, up from $54,180,000 in 2021, representing a growth of approximately 21.9%[104] - Gross profit for the year was $44,295,000, compared to $34,409,000 in the previous year, indicating a year-over-year increase of about 28.7%[104] - Profit from operations rose significantly to $14,158,000, compared to $5,558,000 in 2021, reflecting an increase of approximately 154.5%[104] - Profit for the year reached $8,597,000, a substantial increase from $903,000 in 2021, marking a growth of around 855.5%[104] Assets and Cash Flow - Total assets increased by 6.8% to US$183.958 million, while net assets rose by 4.6% to US$121.950 million[20] - Cash and bank balances improved significantly by 57.4% to US$76.305 million[13] - Net cash generated from operating activities rose to $18,112,000 in 2022, compared to $9,017,000 in 2021, marking an increase of 101%[106] - Cash generated from operations was $20,972,000 in 2022, up from $13,461,000 in 2021, reflecting a growth of 56%[106] - Cash flows from investing activities generated a net amount of $3,821,000 in 2022, a significant decrease from $30,155,000 in 2021[106] Expenses - Research and development costs were $2,132,000, a decrease from $2,686,000 in the previous year, showing a reduction of about 20.6%[104] - Selling and distribution expenses increased to $19,458,000 from $17,366,000, which is an increase of approximately 12.0%[104] - Administrative expenses remained relatively stable at $9,630,000 compared to $9,538,000 in 2021, showing a slight increase of about 1.0%[104] - Other income for the year was reported at $1,193,000, up from $722,000 in 2021, representing an increase of approximately 65.4%[104] Corporate Governance - The Company has maintained the prescribed public float as required under Rule 8.08 of the Listing Rules [52] - The Company has complied with the Corporate Governance Code, except for a deviation from paragraph B.3.1 from January 1, 2022, to March 23, 2022[57] - The Board is comprised of a majority of non-executive Directors, ensuring a balance of power and authority[71] - The Company Secretary plays a crucial role in ensuring good information flow within the Board and compliance with board policies and procedures[171] - The Board conducted an annual review of the effectiveness of the Group's risk management and internal control systems, finding them satisfactory[188] Committees and Meetings - The Company has established an Audit Committee, Compensation Committee, Nomination Committee, and Executive Committee to provide recommendations to the Board[147] - The Audit Committee conducted three meetings during the year ended December 31, 2022, discussing significant judgments affecting the Group's consolidated financial statements[152] - The Remuneration Committee held one meeting during the year ended December 31, 2022, with all members in attendance[175] - The Nomination Committee determined the policy for the nomination of Directors and discussed the implementation of the Board diversity policy during the year ended 31 December 2022[180] Shareholder Information - A resolution will be proposed at the forthcoming AGM to re-appoint BDO Limited as auditor of the Company [54] - All resolutions presented at the 2022 Annual General Meeting were passed, with the results announced and published on the company's website[191] - The Company Secretary must receive written enquiries from shareholders regarding proposals for AGMs or EGMs[193] Audit and Compliance - The Audit Committee reviewed the effectiveness of the financial reporting, risk management, and internal control systems of the Group[171] - The Audit Committee reviewed the remuneration and terms of engagement of the external auditor and recommended the Board on the appointment of the external auditor[174] - The company’s independent auditor is expected to meet regularly at least three times per year[148] Transactions and Fees - The actual transaction amount for Jilin Haizi Guarantee for the year ended 31 December 2022 was RMB 130,000,000 (approximately US$18.7 million) [42] - The maximum commission fee payable by Lansen (BVI) was RMB 130,000,000 (approximately US$18.7 million) for the year ended 31 December 2022 [42] - The commission fee payable by Ningbo Liwah was RMB 650,000 (approximately US$96,000) [42] - The commission fee payable by Jilin Haizi was RMB 650,000 (approximately US$96,000) [42] - The company’s guarantee commission for the cross guarantee agreement is set at 0.5%, referencing the current market rate of approximately 2%[124] Director Information - As of December 31, 2022, the Board consisted of one executive managing Director, two non-executive Directors, and four independent non-executive Directors[62] - The independent non-executive Directors confirmed that the continuing connected transactions were entered into on normal commercial terms and in the interests of shareholders [44] - The Company has received annual confirmations of independence from all independent non-executive Directors, affirming their compliance with the independence guidelines[71] - Mr. Chan has served as an independent non-executive Director for more than nine years and was re-elected by shareholders on 23 June 2022[71] Intangible Assets and Impairment - The Group's intangible assets with indefinite useful lives amounted to US$21,213,000 and goodwill was US$6,824,000 as of December 31, 2022[196] - Management performed an impairment review in accordance with International Accounting Standards 36, focusing on cash-generating units' recoverable amounts based on value in use calculations[196] - The impairment assessment of intangible assets and goodwill was identified as a key audit matter due to its significance and the degree of judgment involved in estimating future cash flows and discount rates[196]

[Financial Highlights](index=1&type=section&id=Financial%E6%91%98%E8%A6%81) [Financial Highlights](index=1&type=section&id=Financial%E6%91%98%E8%A6%81) In 2022, the Group achieved total revenue of **$65.6 million**, a **21.0% year-on-year increase**, with operating profit surging **154.7% to $14.2 million** and profit attributable to owners of the company soaring **852.0% to $8.6 million**, driven by a significant improvement in profitability with gross margin rising from **63.5% to 67.6%** and net margin from **1.7% to 13.1%** 2022 Financial Highlights (Thousand USD) | Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | **Performance** | | | | | Revenue | 65,558 | 54,180 | 21.0% | | Gross Profit | 44,295 | 34,409 | 28.7% | | Operating Profit | 14,158 | 5,558 | 154.7% | | Profit Attributable to Owners of the Company | 8,597 | 903 | 852.0% | | **Profitability** | | | | | Gross Margin | 67.6% | 63.5% | 4.1% | | Net Margin | 13.1% | 1.7% | 11.4% | | Basic Earnings Per Share (US cents) | 2.12 | 0.23 | 1.89 | | **Financial Position** | | | | | Total Assets | 183,958 | 172,312 | 6.8% | | Equity Attributable to Owners of the Company | 121,950 | 116,601 | 4.6% | | Total Liabilities | 62,008 | 55,711 | 11.3% | | Cash and Bank Balances | 76,305 | 48,489 | 57.4% | [Chairman's Statement](index=2&type=section&id=Chairman%27s%20Statement) [2022 Review](index=2&type=section&id=2022%20Review) In 2022, the Group's business achieved recovery growth with total turnover of approximately **$65.6 million**, a **21.0% year-on-year increase**, primarily driven by core products Pavlin and Xinsiquede, while the Group focused resources on core pharmaceutical and health businesses by expanding sales coverage, enhancing cost efficiency, and pausing new investments in the beauty segment - Total turnover in 2022 was approximately **$65.6 million**, a **21.0% year-on-year increase**; operating profit was approximately **$14.2 million**, up **154.7% year-on-year**; and net profit was approximately **$8.6 million**, up **852.0% year-on-year**, primarily due to sales contributions from key products Pavlin and Xinsiquede, increased revenue, and improved gross margin from cost reduction and efficiency enhancement[26](index=26&type=chunk) - The core strategy for the pharmaceutical business involves achieving full market and product coverage in sales, focusing on cost reduction and efficiency improvement in production, and expanding the product portfolio through R&D, resumption of production, and introduction of new products[222](index=222&type=chunk)[200](index=200&type=chunk) - The health business, leveraging associate company Cuijian as a platform, develops two main segments: plant extracts and finished health products, mitigating challenges in raw material procurement and exports for plant extracts by expanding domestic sales[204](index=204&type=chunk)[30](index=30&type=chunk)[10](index=10&type=chunk) - The Group decided to cease new resource investment in the beauty business, concentrating resources on the development of pharmaceutical and health businesses[227](index=227&type=chunk)[187](index=187&type=chunk) [2023 Outlook](index=5&type=section&id=2023%20Outlook) Looking ahead to 2023, the Group will seize post-pandemic opportunities by adhering to existing pharmaceutical and health business development strategies, including actively responding to national tiered diagnosis and treatment policies, continuously expanding market coverage, and strengthening the product portfolio through resumption of production, R&D, or M&A to drive sustained and stable business growth, all while enhancing cost efficiency - The Group will continue to adhere to its existing development strategies for the pharmaceutical and health businesses, adapting to industry transformation in the post-pandemic era[206](index=206&type=chunk) - Future plans include further expanding full market and product coverage, continuously improving cost efficiency, and introducing new products through resumption of production, R&D, or mergers and acquisitions to strengthen the product portfolio and promote sustained and stable business growth[32](index=32&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=20&type=section&id=Business%20Review) In 2022, the Group's business segments showed divergent performance, with the core pharmaceutical segment's revenue growing **23.8% to $63.6 million** and segment profit increasing **39.9%** due to successful "full market, full product coverage" strategy and increased hospital coverage, while the health business faced challenges with a **25.4% revenue decline** due to international conditions, and the beauty business saw a **72.2% revenue drop**, leading the Group to halt new investments and focus on existing inventory Revenue Performance by Business Segment (Million USD) | Business Segment | 2022 Revenue | 2021 Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Pharmaceutical | 63.6 | 51.4 | +23.8% | | Health Products | 1.9 | 2.6 | -25.4% | | Beauty Products | 0.1 | 0.2 | -72.2% | - By strengthening full market channel coverage, the number of target hospitals above Grade II with drug procurement increased by **3.3% to 2,597**, and the number of grassroots target hospitals increased by **9.0% to 1,552**[117](index=117&type=chunk)[202](index=202&type=chunk) - Production operations reduced costs while maintaining quality by optimizing the supply chain, utilizing energy-saving equipment, and implementing lean production scheduling, effectively addressing rising raw material and energy prices[137](index=137&type=chunk)[119](index=119&type=chunk) - During the year, the Group achieved its targets for resuming production of products such as Fukan Granules and Sanqi Capsules, and actively sought to introduce market-valuable products to strengthen its product portfolio[139](index=139&type=chunk)[122](index=122&type=chunk) [Financial Review](index=25&type=section&id=Financial%20Review) For fiscal year 2022, the Group demonstrated strong overall financial performance with total revenue growing **21.0% to $65.6 million** and gross profit increasing **28.7% to $44.3 million**, driven by an improved gross margin from **63.5% to 67.6%** primarily due to cost efficiency in pharmaceutical products, while effective expense control was evident as selling and administrative expenses decreased as a percentage of total revenue, resulting in a robust financial position with **$51.3 million** in cash and cash equivalents and a current ratio of **2.2** at year-end, further bolstered by a new share placement raising approximately **$7.6 million** in net proceeds during the year Key Financial Indicators Changes | Item | 2022 (Million USD) | 2021 (Million USD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 65.6 | 54.2 | +21.0% | | Gross Profit | 44.3 | 34.4 | +28.7% | | Gross Margin | 67.6% | 63.5% | +4.1 p.p. | | Selling and Distribution Expenses | 19.5 | 17.4 | +12.0% | | Administrative Expenses | 9.6 | 9.5 | +1.0% | | Research and Development Costs | 2.1 | 2.7 | -20.6% | | Profit Attributable to Shareholders | 8.6 | 0.9 | +852.0% | - Liquidity remained strong, with cash and cash equivalents of approximately **$51.3 million**, net current assets of approximately **$72.5 million**, and a current ratio of **2.2** as of December 31, 2022[178](index=178&type=chunk)[158](index=158&type=chunk) - In April 2022, the Group completed a placement of **49,520,000 new shares** at **HK$1.20 per share**, raising net proceeds of approximately **$7.6 million** for potential acquisitions and working capital replenishment[156](index=156&type=chunk)[157](index=157&type=chunk) - As of December 31, 2022, the Group's borrowings were approximately **$18.2 million**, a decrease from **$24.7 million** in the prior year[159](index=159&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2022, the Group's revenue was **$65.6 million**, a **21.0% year-on-year increase**, with gross profit at **$44.3 million**, up **28.7%**, and operating profit significantly increasing **154.7% to $14.2 million** due to revenue growth and effective cost control, resulting in a profit for the year of **$8.6 million**, an **852.0% increase** from **$0.9 million** last year, and basic earnings per share of **2.12 US cents** Consolidated Statement of Profit or Loss (Thousand USD) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Revenue | 65,558 | 54,180 | | Cost of Sales | (21,263) | (19,771) | | **Gross Profit** | **44,295** | **34,409** | | Other Income | 1,193 | 722 | | Selling and Distribution Expenses | (19,458) | (17,366) | | Administrative Expenses | (9,630) | (9,538) | | Research and Development Costs | (2,132) | (2,686) | | **Operating Profit** | **14,158** | **5,558** | | Profit Before Income Tax | 9,915 | 2,404 | | Income Tax Expense | (1,318) | (1,501) | | **Profit for the Year** | **8,597** | **903** | | **Profit Attributable to Owners of the Company** | **8,597** | **903** | | **Basic Earnings Per Share (US cents)** | **2.12** | **0.23** | [Consolidated Statement of Financial Position](index=8&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's total assets were **$184.0 million**, a **6.8% increase** from the previous year, with total liabilities at **$62.0 million**, up **11.3% year-on-year**, and equity attributable to owners of the company at **$122.0 million**, a **4.6% increase**, while net current assets rose from **$61.1 million to $72.5 million**, indicating enhanced short-term solvency Consolidated Statement of Financial Position Summary (Thousand USD) | Item | 2022 | 2021 | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 51,515 | 57,689 | | Current Assets | 132,443 | 114,623 | | **Total Assets** | **183,958** | **172,312** | | **Equity and Liabilities** | | | | Equity Attributable to Owners of the Company | 121,950 | 116,601 | | **Total Equity** | **121,950** | **116,601** | | Non-current Liabilities | 2,043 | 2,236 | | Current Liabilities | 59,965 | 53,475 | | **Total Liabilities** | **62,008** | **55,711** | | **Total Equity and Liabilities** | **183,958** | **172,312** | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [Segment Information](index=12&type=section&id=5.%20Segment%20Information) The Group's business is divided into three segments: pharmaceutical, beauty products, and health products, with the pharmaceutical segment being the primary source of revenue and profit in 2022, contributing **$63.6 million** in revenue and **$24.7 million** in segment profit, representing the vast majority of total segment profit, while health and beauty product segments contributed relatively less, and geographically, the vast majority of revenue, **97.5% of total**, originated from the Chinese mainland market 2022 Segment Performance (Thousand USD) | Item | Pharmaceutical | Beauty Products | Health Products | Total | | :--- | :--- | :--- | :--- | :--- | | Reportable Segment Revenue | 63,571 | 70 | 1,917 | 65,558 | | Reportable Segment Profit | 24,671 | 58 | 108 | 24,837 | 2021 Segment Performance (Thousand USD) | Item | Pharmaceutical | Beauty Products | Health Products | Total | | :--- | :--- | :--- | :--- | :--- | | Reportable Segment Revenue | 51,359 | 252 | 2,569 | 54,180 | | Reportable Segment Profit | 17,641 | (812) | 214 | 17,043 | Revenue by Major Geographic Market (Thousand USD) | Region | 2022 | 2021 | | :--- | :--- | :--- | | China (Resident) | 63,899 | 52,037 | | Hong Kong | 1,659 | 2,143 | | **Total** | **65,558** | **54,180** | [Dividends](index=17&type=section&id=10.%20Dividends) The Board has resolved to declare an interim dividend of **5.0 HK cents per share** for the year ended December 31, 2022, payable entirely by way of an allotment of new shares under a scrip dividend scheme, with no cash option for shareholders, and this dividend, not yet accounted for in the 2022 financial statements, will be reflected in 2023, contrasting with a special dividend of **HK$1.55 per share** paid in 2021 - The Board declared an interim dividend of **5.0 HK cents per share** (approximately **0.64 US cents**) for the year ended December 31, 2022, totaling approximately **$2.6 million**[55](index=55&type=chunk) - This interim dividend will be paid entirely by way of an allotment of fully paid shares (the "Scrip Dividend Scheme"), with no cash option offered[2](index=2&type=chunk)[55](index=55&type=chunk) - For comparison, for the year ended December 31, 2021, the company paid a special dividend of **HK$1.55 per share**, totaling approximately **$76.9 million**[54](index=54&type=chunk)[79](index=79&type=chunk) [Earnings Per Share](index=18&type=section&id=11.%20Earnings%20Per%20Share) For the year ended December 31, 2022, basic earnings per share significantly increased to **2.12 US cents** from **0.23 US cents** in 2021, primarily driven by the rise in consolidated profit attributable to owners of the company from **$903,000 to $8,597,000**, with the weighted average number of ordinary shares outstanding used for calculation being **406,331,000 shares**, and no potential dilutive shares existed in either year Basic Earnings Per Share Calculation | Item | 2022 | 2021 | | :--- | :--- | :--- | | Consolidated Profit Attributable to Owners of the Company (Thousand USD) | 8,597 | 903 | | Weighted Average Number of Ordinary Shares Outstanding (Thousand Shares) | 406,331 | 389,748 | | **Basic Earnings Per Share (US cents)** | **2.12** | **0.23** | - The Group had no potential dilutive shares in either year[82](index=82&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) [Interim Dividend and Scrip Dividend Scheme](index=30&type=section&id=Interim%20Dividend%20and%20Scrip%20Dividend%20Scheme) The company declared an interim dividend of **5.0 HK cents per share** for the year ended December 31, 2022, to be fully distributed via a scrip dividend scheme where shareholders will receive newly issued interim dividend shares based on their holdings, calculated at a reference price of **HK$1.406** (average closing price over five consecutive trading days), with the scheme subject to approval for listing and trading of the shares by the Stock Exchange - An interim dividend of **5.0 HK cents per share** was declared, payable via a scrip dividend scheme[2](index=2&type=chunk) - The reference price for calculating the number of interim dividend shares is **HK$1.406 per share**[129](index=129&type=chunk)[130](index=130&type=chunk) - The implementation of the scrip dividend scheme is subject to the approval by the Listing Committee of the Stock Exchange for the listing and trading of the interim dividend shares[102](index=102&type=chunk) [Purchases, Sales or Redemptions of Listed Securities](index=31&type=section&id=Purchases%2C%20Sales%20or%20Redemptions%20of%20Listed%20Securities) For the year ended December 31, 2022, the company repurchased a total of **18,478,000 of its own shares** on the Stock Exchange for a total consideration of approximately **HK$28.5 million**, and additionally, completed a placement in April 2022, issuing **49,520,000 new shares** at **HK$1.20 per share** 2022 Share Repurchase Details | Month | Number of Shares | Total Price Paid (HKD) | | :--- | :--- | :--- | | June 2022 | 6,400,000 | 10,062,570 | | September 2022 | 441,000 | 558,280 | | October 2022 | 7,620,000 | 11,909,900 | | November 2022 | 3,005,000 | 4,470,590 | | December 2022 | 1,012,000 | 1,502,910 | | **Total** | **18,478,000** | **28,504,250** | - In April 2022, the company completed a placement of **49,520,000 shares** at **HK$1.20 per share**[107](index=107&type=chunk) [Corporate Governance and Compliance](index=31&type=section&id=Corporate%20Governance%20and%20Compliance) The company largely complied with the Corporate Governance Code provisions during 2022, with a brief deviation from January 1 to March 23 due to the absence of a nomination committee, while the audit committee, comprising three independent non-executive directors, reviewed the annual results, all directors confirmed compliance with the standard code for securities transactions, and the auditor reconciled the financial data in the preliminary results announcement with the audited consolidated financial statements - The company consistently complied with the Corporate Governance Code during the year, with a deviation from Code Provision B.3.1 only between January 1 and March 23, 2022, due to the non-establishment of a nomination committee[108](index=108&type=chunk) - The Audit Committee, composed of three independent non-executive directors, has reviewed the audited consolidated annual results for the current year[111](index=111&type=chunk) - The auditor, BDO Limited, has reconciled the financial data in the preliminary results announcement with the audited consolidated financial statements for the year[36](index=36&type=chunk)

Financial Performance - For the six months ended June 30, 2022, the company reported revenue of approximately HKD 150 million, representing a 20% increase compared to HKD 125 million for the same period in 2021[12]. - The company’s net profit for the six months ended June 30, 2022, was approximately HKD 30 million, a 50% increase from HKD 20 million in the previous year[12]. - Revenue for the six months ended June 30, 2022, was approximately US$32.0 million, representing a 36.2% increase compared to US$23.5 million for the same period in 2021[15]. - Profit from operations increased by approximately 229.6% to US$9.2 million, compared to US$2.8 million in the prior year[15]. - Profit attributable to owners of the Company reached approximately US$6.8 million, a 344.5% increase from US$1.5 million in the previous year[15]. - The reportable segment revenue for the six months ended June 30, 2022, was $31,991,000, an increase from $23,485,000 for the same period in 2021, representing a growth of approximately 36.4%[180]. - The reportable segment profit for the six months ended June 30, 2022, was $13,701,000, compared to $7,390,000 for the same period in 2021, indicating an increase of approximately 85.5%[181]. Cost Management and Profitability - The gross profit margin improved to 65% in the first half of 2022, up from 60% in the same period last year, indicating better cost management and pricing strategies[12]. - Gross profit for the same period was approximately US$21.9 million, up 44.8% from US$15.1 million year-over-year[15]. - Selling and distribution expenses increased to $8,235,000 from $7,758,000, reflecting a rise of 6.1%[145]. - Administrative expenses rose to $5,312,000 from $5,081,000, indicating an increase of 4.5%[145]. Market Expansion and Product Development - User data showed a 15% increase in active users, reaching 1.2 million by June 30, 2022, compared to 1.04 million in the same period last year[12]. - The company plans to launch two new products in Q4 2022, aiming to capture an additional 10% market share in the pharmaceutical sector[12]. - Future outlook includes a projected revenue growth of 25% for the full year 2022, driven by new product launches and market expansion efforts[12]. - The Group focused on strengthening its low-tier markets and increasing hospital coverage in response to new Chinese government policies impacting the pharmaceutical industry[27]. Research and Development - Research and development expenses increased by 30% to HKD 10 million, reflecting the company's commitment to innovation and new technology development[12]. - The Group will continue to increase R&D investment in its core product, Pafulin, focusing on its mechanism of action, new indications, and internationalization to maintain its leading therapeutic position[52]. - Research and development costs amounted to US$959,000 for the six months ended June 30, 2022, down from US$1,092,000 in 2021[195]. Strategic Partnerships and Acquisitions - The company is exploring potential acquisitions to enhance its product portfolio and expand its market presence in Asia[12]. - The Group is actively seeking products or companies for acquisition or strategic partnerships that align with its strategy[52]. Financial Position and Liquidity - Total assets decreased by 2.4% to US$168.3 million, while total liabilities dropped by 21.9% to US$43.5 million[15]. - The net current assets of the Group were approximately US$73.3 million as of June 30, 2022, compared to approximately US$61.1 million as of December 31, 2021, with a current ratio of 2.8[68]. - The cash and cash equivalents at the end of the period were US$53,170,000, down from US$103,000,000 at the end of June 2021[159]. Shareholder Information - The substantial shareholder Cathay International Holdings Limited holds 209,820,000 shares, representing 49.91% of the issued share capital[100]. - Cosmos Skyland Limited, another substantial shareholder, holds 66,440,000 shares, accounting for 15.80% of the issued share capital[100]. - The total interest of Mr. Wu Zhen Tao, including shares held through various entities, amounts to 276,260,000 shares, which is 65.71% of the issued share capital[100]. Corporate Governance and Compliance - The company complied with the Corporate Governance Code except for a deviation from paragraph B.3.1 from January 1, 2022, to March 23, 2022[132]. - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2022[134]. Employee Information - The company had over 621 employees as of June 30, 2022, with competitive remuneration packages reviewed annually[76]. - The company provides internal training and encourages employees to participate in relevant training courses for career advancement[80]. - The company will review employee compensation annually, considering labor market and economic conditions[80].

Financial Performance - Revenue for the year ended December 31, 2021, was US$54,180, a decrease of 0.4% compared to US$54,386 in 2020[8] - Gross profit for 2021 was US$34,409, down 2.2% from US$35,179 in 2020[8] - Profit before income tax significantly decreased by 97.4% to US$2,404 from US$91,402 in 2020[8] - Profit for the year attributable to owners of the company dropped by 99.0% to US$903 from US$88,205 in 2020[8] - Total assets decreased by 31.8% to US$172,312 from US$252,778 in 2020[8] - Equity attributable to owners of the company fell by 40.9% to US$116,601 from US$197,282 in 2020[8] - Cash and bank balances decreased by 50.3% to US$48,489 from US$97,553 in 2020[8] - Current ratio declined to 2.1 from 3.7 in the previous year[8] - Net profit margin for 2021 was 1.7%, a decrease of 160.5% from 162.2% in 2020[15] - Basic earnings per share for 2021 was US$0.23, down from US$22.21 in 2020[8] Revenue Breakdown - Revenue from the pharmaceutical segment amounted to approximately US$51.4 million, a decrease of 0.3% from 2020, and a decrease of 6.7% when excluding RMB appreciation[32] - Revenue from the cosmetic products segment increased by 90.9% to approximately US$0.2 million, with a gross profit of approximately US$0.1 million[32] - Revenue from the healthcare business, excluding Natural Dailyhealth, was approximately US$2.6 million, a decrease of 6.6% from 2020, while gross profit increased by 301.5% to approximately US$0.5 million[32] Operational Challenges - The Group recorded total revenue of approximately US$54.2 million for the financial year ended December 31, 2021, representing a decrease of 0.4% year-on-year, and a 7% decrease after excluding the effect of RMB appreciation against USD[18] - Operating profit for 2021 was approximately US$5.6 million, a decline of 36.7% from the previous year, primarily due to the decrease in revenue[18] - Net profit for 2021 was approximately US$0.9 million, reflecting a significant decrease of about 99.0% year-on-year, mainly due to lower operating profit and a loss of approximately US$1.1 million related to shares of Zhejiang Starry Pharmaceutical Co., Ltd.[18] - The plant extract business of the associate, Natural Dailyhealth, faced challenges, resulting in continual pressure on gross profit and delays in developing new customers[21] Strategic Adjustments - The Group has adjusted its sales strategy in response to declining sales volumes of core products, including Pafulin and Sicorten Plus, and is implementing targeted adjustments[18] - The Group plans to reduce investment in the cosmetic business due to ineffective sales from pilot operations and will focus on selling skin care products through agency outlets[21] - The Group is integrating its sales and marketing resources to enhance coverage in lower-tier cities and improve sales channels[18] - The Group plans to focus on the development of its pharmaceutical business in 2022, particularly through the promotion of Pafulin and Sicorten Plus in dermatology[23] Sustainability and ESG Initiatives - The Group is gradually integrating sustainable development strategies into its overall development strategy as it expands[63] - The Group emphasizes standardized ESG management to ensure health and sustainable development[64] - The Group has identified 28 ESG issues related to its operations, with 14 topics prioritized as highly material[72] - The Group plans to establish a dedicated ESG working group in 2022 to enhance sustainability governance[1] - Stakeholder engagement is considered integral to the development of the Group's sustainability strategy[69] Energy and Environmental Performance - Total electricity consumption in 2021 was 6,197,932 kWh, a decrease of 5.7% compared to 2020's 5,865,569 kWh[93] - Total natural gas consumption increased by 26.0% from 123,241 Nm3 in 2020 to 155,268 Nm3 in 2021[93] - Total GHG emissions for 2021 were 10,819 tonnes CO2 equivalent, a decrease of 21.7% from 2020[112] - GHG emissions per revenue decreased by 25% from 0.20 tonnes CO2 equivalent in 2020 to 0.16 tonnes in 2021[112] Employee and Labor Practices - Employee costs for the Group were approximately US$17.1 million for the year ended December 31, 2021, with over 591 employees[55] - The employee turnover rate is 32.4% for males and 19.8% for females, indicating a significant gender disparity in retention[151] - The company emphasizes a diverse workforce, hiring employees of various genders, ages, skills, and backgrounds to achieve an optimal structure[147] - The Group has implemented safety measures in production environments, including dust and noise cancellation equipment, and conducts annual fire drills to enhance employee safety awareness[153] Supply Chain Management - The Group has established an effective Supply Chain Management System to enhance product quality and operational efficiency, focusing on procurement, storage, logistics, sales, and dispatching processes[161] - The Group conducts annual quality reviews of all products and suppliers to ensure compliance with national regulatory quality requirements[163] - The Group prioritizes suppliers that adopt sustainable products and services during the selection process, which is a crucial criterion in annual supplier assessments[163] - The Group has passed supplier and product qualification assessments for all suppliers, ensuring compliance with quality management standards[169]