Financial Performance and Summary This section presents the company's financial performance, including key statements and the auditor's report, highlighting significant financial deterioration and going concern issues [Financial Statements](index=1&type=section&id=Financial%20Statements) The company's financial position significantly deteriorated for the year ended March 31, 2025, marked by a 35.1% revenue decline to HKD 38.94 million, widened loss, and a shift to net current liabilities Summary Consolidated Statement of Profit or Loss (HKD '000) | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 38,943 | 59,930 | -35.1% | | Gross Profit | 9,235 | 13,638 | -32.3% | | Operating Loss | (67,126) | (41,967) | +59.9% | | Loss for the Year | (67,821) | (42,497) | +59.6% | | Loss Attributable to Owners of the Company | (67,790) | (40,187) | +68.7% | | Basic Loss Per Share (HK cents) | (13.91) | (8.45) | +64.6% | Summary Consolidated Statement of Financial Position (HKD '000) | Metric | March 31, 2025 | March 31, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 32,728 | 63,333 | -48.3% | | Current Assets | 114,620 | 128,983 | -11.1% | | Current Liabilities | 131,965 | 112,107 | +17.7% | | Net Current (Liabilities)/Assets | (17,345) | 16,876 | N/A | | Net Assets | 95 | 59,753 | -99.8% | | Cash and Cash Equivalents | 1,048 | 4,013 | -73.9% | [Independent Auditor's Report and Management's Response](index=26&type=section&id=Independent%20Auditor's%20Report%20and%20Management's%20Response) The auditor issued a 'disclaimer of opinion' on the consolidated financial statements for the year ended March 31, 2025, due to significant uncertainties regarding the Group's going concern ability, including substantial losses and net current liabilities, while management is actively pursuing fundraising plans to address liquidity issues - The auditor issued a disclaimer of opinion on the financial statements due to insufficient appropriate audit evidence regarding the appropriateness of the going concern assumption[67](index=67&type=chunk)[70](index=70&type=chunk) - The basis for the disclaimer includes multiple material uncertainties: an annual loss of approximately **HKD 67.82 million**, net current liabilities of approximately **HKD 17.35 million**, significant short-term debt, and cash and cash equivalents of only approximately **HKD 1.05 million**[68](index=68&type=chunk) - To address liquidity pressure, management plans to raise approximately **HKD 70 million** through a subscription agreement and approximately **HKD 15 million** through a rights issue, while negotiating loan renewals and seeking new funds[71](index=71&type=chunk)[70](index=70&type=chunk) Management Discussion and Analysis This section provides management's perspective on the company's operational performance, financial condition, significant transactions, and future strategies for the reporting period [Overall Performance and Business Review](index=28&type=section&id=Overall%20Performance%20and%20Business%20Review) The Group's total revenue declined 35% to HKD 38.9 million, primarily due to reduced medical device distribution income, while loss attributable to owners widened to HKD 67.8 million, mainly due to a HKD 31.2 million litigation provision from an unfavorable appeal judgment - Annual revenue decreased by **35%** to **HKD 38.9 million**, primarily due to reduced income from medical devices and consumables distribution and services[73](index=73&type=chunk) - Loss attributable to owners widened to **HKD 67.8 million**, mainly due to a **USD 4 million** (approximately **HKD 31.2 million**) litigation expense provision resulting from an unfavorable appeal judgment[74](index=74&type=chunk) Summary of Segment Performance (HKD '000) | Business Segment | 2025 Revenue | 2024 Revenue | 2025 (Loss)/Profit | 2024 (Loss)/Profit | | :--- | :--- | :--- | :--- | :--- | | Medical Devices and Consumables Distribution | 27,700 | 45,800 | (400) | 400 | | Hospital Operations and Management | 11,200 | 14,100 | (14,200) | (20,200) | | Commercial Services | 0 | 0 | (14,700) | (10,600) | | Functional Food R&D and Sales | 0 | 0 | 1,000 | (13,100) | [Material Acquisitions and Disposals](index=33&type=section&id=Material%20Acquisitions%20%26%20Disposals) The Group terminated its Bochuang Fund investment, sold Golden Alliance Limited due to unmet profit guarantees, settled the Jinmei Group acquisition dispute, and terminated the Putian Fuxin Molecular Diagnostics acquisition - **Disposal of Golden Alliance**: The Group exercised its exit clause and completed the disposal of its **51%** equity interest on April 23, 2024, due to the target company's 2024 fiscal year loss and failure to meet profit guarantees, leading to the cancellation of the promissory note[94](index=94&type=chunk)[92](index=92&type=chunk) - **Disposal of Jinmei Group**: A legal dispute triggered a cross-default clause, leading to a settlement on July 3, 2025, where the Group will transfer its entire equity interest in Jinmei for a nominal consideration of **HKD 1** and issue a **HKD 12 million** settlement note to the vendor[83](index=83&type=chunk)[86](index=86&type=chunk)[64](index=64&type=chunk) - **Termination of Putian Fuxin Acquisition**: The agreement to acquire **100%** equity interest in Putian Fuxin Molecular Diagnostics was terminated as the conditions precedent were not fulfilled by the long stop date of June 30, 2025[99](index=99&type=chunk)[97](index=97&type=chunk) - **Termination of Bochuang Fund Investment**: On October 18, 2024, the Group entered into a termination agreement with Beijing Qihui, eliminating the need to pay the remaining **RMB 15 million** capital contribution and receiving a refund of the **RMB 15 million** advance payment[89](index=89&type=chunk)[88](index=88&type=chunk) [Liquidity, Capital Resources and Fundraising Activities](index=37&type=section&id=Liquidity%2C%20Capital%20Resources%20%26%20Fundraising) The Group faces a severe liquidity crisis with only HKD 1 million in cash and HKD 17.3 million in net current liabilities as of March 31, 2025, prompting a large-scale fundraising plan to raise approximately HKD 84.7 million through new share subscriptions and a rights issue for debt repayment and working capital Liquidity Indicators | Metric | March 31, 2025 (HKD) | March 31, 2024 (HKD) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,000,000 | 4,000,000 | | Net Current (Liabilities)/Assets | (17,300,000) | 16,900,000 | | Current Ratio | 0.88 | 1.15 | - The company plans to raise a total of approximately **HKD 84.7 million** through subscription agreements and a rights issue, with net proceeds of approximately **HKD 80.9 million**[105](index=105&type=chunk) - The net proceeds are intended to be used as follows: approximately **HKD 65.3 million** for repayment of payables, **HKD 12 million** for repayment of the settlement note, and approximately **HKD 3.6 million** for working capital[105](index=105&type=chunk) [Future Outlook](index=32&type=section&id=Future%20Outlook) Management acknowledges unprecedented challenges, including business decline and litigation, raising going concern doubts, but the board has taken decisive measures to stabilize finances through strategic investors and a rights issue, aiming to refocus on core businesses and pursue new opportunities for future growth - Management acknowledges unprecedented challenges, including declining business performance, difficulties in accounts receivable recovery, and unfavorable litigation outcomes, raising concerns about the going concern status[85](index=85&type=chunk) - To address these challenges, the company has entered into subscription agreements with strategic investors and proposed a rights issue to improve its financial position and support long-term growth[85](index=85&type=chunk) - Moving forward, with the support of new shareholders and capital, the Group plans to strengthen its core businesses and actively explore strategic collaborations, industry consolidation, and new business opportunities to create shareholder value[87](index=87&type=chunk) Key Notes to Financial Statements This section provides detailed explanations and disclosures for critical items within the financial statements, including going concern assumptions, material litigation, and equity changes [Going Concern](index=6&type=section&id=Going%20Concern) Note 2 highlights significant uncertainty regarding the Group's going concern ability, with an annual loss of HKD 67.82 million, net current liabilities of HKD 17.35 million, and substantial short-term debts against limited cash, making the success of management's mitigating actions uncertain - As of March 31, 2025, the Group recorded an annual loss of approximately **HKD 67.82 million**, net current liabilities of approximately **HKD 17.35 million**, and cash and cash equivalents of only **HKD 1.05 million**, indicating material uncertainties that may cast significant doubt on its going concern ability[9](index=9&type=chunk) - To address liquidity pressure, the Board is implementing several measures, including: (i) a subscription agreement to raise approximately **HKD 70 million**; (ii) a rights issue to raise approximately **HKD 15 million**; (iii) negotiating renewals with lenders; and (iv) seeking new funding[10](index=10&type=chunk) - The Group's ability to continue as a going concern depends on the successful implementation of these fundraising plans; if not, significant adjustments to the financial statements, such as asset write-downs and liability reclassifications, may be required and are not reflected in the current statements[11](index=11&type=chunk) [Material Litigation and Contingencies](index=18&type=section&id=Material%20Litigation%20%26%20Contingencies) During the period, the Group faced a significant lawsuit where an appeal court ruled against it for a USD 4 million loan note, leading to a HKD 31.2 million provision, while contingent consideration arrangements for acquisitions like Golden Alliance and Jinmei were complex due to unmet profit guarantees, resulting in disposals and settlements - Regarding the **USD 4 million** loan note dispute with Li Hong/Capital Foresight, the appeal court ruled against the company on October 18, 2024, requiring payment of **USD 4 million**, leading to a **HKD 31.2 million** provision for other payables recognized in profit or loss this year[51](index=51&type=chunk)[49](index=49&type=chunk) - The Group exercised its exit clause and terminated the acquisition agreement on April 23, 2024, as the Golden Alliance Group failed to achieve its profit guarantee[58](index=58&type=chunk)[57](index=57&type=chunk) - Following the acquisition of Jinmei Group, the aforementioned **USD 4 million** adverse judgment triggered a cross-default clause, leading to a dispute with the vendor, which was settled by the Group selling Jinmei and issuing a **HKD 12 million** settlement note, resulting in a **HKD 5.17 million** fair value change in contingent consideration recognized this year[61](index=61&type=chunk)[83](index=83&type=chunk) [Share Capital Changes and Subsequent Events](index=24&type=section&id=Share%20Capital%20Changes%20%26%20Subsequent%20Events) During the period, the company's share capital changed due to the issuance of 7.2 million consideration shares for Beijing Youkang's profit guarantee and a 12.65 million share placing, with the most significant post-reporting event being the July 3, 2025, settlement deed for the Jinmei Group disposal, involving a nominal HKD 1 transfer and a HKD 12 million settlement note - During the reporting period, the company's issued ordinary shares increased from **479 million** to **492 million**, primarily due to the issuance of consideration shares and placing of new shares[62](index=62&type=chunk) - Subsequent event: On July 3, 2025, the company entered into a settlement deed for the disposal of Jinmei Group, transferring its entire equity interest for a nominal consideration of **HKD 1** and issuing a **HKD 12 million** settlement note[64](index=64&type=chunk) Corporate Governance and Other Information This section covers the company's corporate governance practices, compliance with listing rules, and other relevant information, including dividend policy and trading status [Corporate Information and Compliance](index=40&type=section&id=Corporate%20Information%20%26%20Compliance) The company did not declare a final dividend for the year and generally complied with the Corporate Governance Code, though it noted a deviation regarding directors' liability insurance, which was rectified in June 2025, with the audit committee reviewing the annual results - The Directors do not recommend the payment of any final dividend (2024: nil)[72](index=72&type=chunk) - The company deviated from Corporate Governance Code Provision C.1.8 during the year by failing to procure liability insurance for Directors, but this was rectified in June 2025[114](index=114&type=chunk) - The Audit Committee has reviewed the audited annual results with management[116](index=116&type=chunk) [Resumption of Trading](index=42&type=section&id=Resumption%20of%20Trading) The company's shares were suspended from trading on July 2, 2025, pending the release of the annual results announcement, and an application for resumption of trading has been made for July 7, 2025 - The company's shares were suspended from trading effective July 2, 2025, and an application for resumption of trading has been made for July 7, 2025[118](index=118&type=chunk)

Core Viewpoint - The stock of China Health Group will be suspended from trading starting at 9 AM today [1] Group 1 - The announcement indicates a significant event affecting the company's stock trading status [1]

Core Viewpoint - China Health Group (00673.HK) expects to report a net loss attributable to shareholders of approximately HKD 66 million to HKD 70 million for the fiscal year 2025, compared to a net loss of approximately HKD 40.2 million for the fiscal year 2024 [1] Group 1 - The increase in losses for the fiscal year 2025 is primarily due to several factors, including a provision for litigation expenses of USD 4 million related to a judgment from the appellate court regarding a claim by Capital Foresight Limited [2] - Other income from the "other payables reversal" account is expected to decrease from approximately HKD 31.2 million in fiscal year 2024 to about HKD 16.3 million in fiscal year 2025, due to the reversal of payables after the High Court's dismissal of the claim [2] - The gross profit for fiscal year 2025 is projected to decrease by approximately HKD 4.4 million to about HKD 9.2 million, compared to approximately HKD 13.6 million in fiscal year 2024 [2] Group 2 - The negative factors affecting the fiscal year 2025 results are partially offset by a reduction in sales, distribution, and administrative expenses, which are expected to decrease by approximately HKD 14.7 million to about HKD 37 million, compared to approximately HKD 51.7 million in fiscal year 2024 [2]

Core Viewpoint - China Health Group (00673) announced a subscription and rights issue to address financial challenges and capital needs for ongoing operations and future development [1][2] Group 1: Subscription Agreements - The company entered into Subscription Agreements A, B, and C on April 30, 2025, to issue a total of 700 million new shares at a subscription price of HKD 0.1 per share [1] - The subscription price represents a discount of approximately 28.6% compared to the closing price of HKD 0.140 per share on April 30 [1] - The total number of subscription shares represents about 142.4% of the existing shares as of the announcement date and approximately 52.3% of the expanded share capital post-issue [1] Group 2: Rights Issue Details - The company proposes a rights issue based on a ratio of 3 new shares for every 10 shares held at a price of HKD 0.1 per share, aiming to raise between approximately HKD 14.7 million and HKD 15 million [2] - The estimated gross proceeds from the subscription and rights issue are approximately HKD 84.7 million, with net proceeds expected to be around HKD 80.9 million [2] Group 3: Use of Proceeds - The net proceeds from the subscription and rights issue are planned to be used as follows: approximately HKD 65.3 million for settling payables, including HKD 31.2 million for judgment debts, HKD 15.5 million for loans, HKD 3.6 million for overdue employee salaries, HKD 5.1 million for overdue professional fees, and HKD 9.9 million for overdue director remuneration [2] - The remaining balance of approximately HKD 15.6 million will be allocated for the company's working capital [2] Group 4: Resumption of Trading - Following the announcement, the company has applied to resume trading of its shares starting from 9:00 AM on May 23, 2025 [2]

Financial Performance - For the six months ended September 30, 2024, the company reported a loss attributable to owners of the company of HKD 17,387,000, compared to a loss of HKD 15,060,000 in the same period of 2023, representing an increase in loss of approximately 15.5%[4] - Revenue for the six months ended September 30, 2024, was HKD 18,680,000, a decrease of 29.5% from HKD 28,268,000 in the same period of 2023[8] - Gross profit for the period was HKD 1,993,000, down 60.5% from HKD 5,035,000 in the previous year[8] - The company reported a total comprehensive loss of HKD 18,130 for the period, which includes a loss of HKD 17,387[32] - Revenue for the period was approximately HKD 13,200,000, a decrease of 39% compared to HKD 21,800,000 in the previous fiscal period[93] - The company recorded an operating loss of approximately HKD 700,000 for the period, an improvement from an operating loss of HKD 1,300,000 in the previous year[93] - The group recorded an operating loss of approximately HKD 3,200,000 for the hospital operations segment, compared to HKD 3,100,000 in the previous year[95] - The company has incurred an operating loss of approximately HKD 1,700,000 from its commercial factoring business during the reporting period, compared to a loss of HKD 600,000 in 2023[121] Cash Flow and Liquidity - The company reported a net cash outflow from operating activities of HKD 11,538,000 for the six months ended September 30, 2024, compared to an outflow of HKD 14,890,000 in the same period of 2023[13] - The company’s cash and cash equivalents decreased to HKD 2,409,000 from HKD 4,013,000 as of March 31, 2024, reflecting a decline of 40%[13] - The group’s current assets and net current assets were approximately HKD 124,900,000 and HKD 9,600,000, respectively, as of September 30, 2024[168] - The current ratio as of September 30, 2024, was 1.08, compared to 1.15 as of March 31, 2024[168] - The asset-liability ratio was 0.83 as of September 30, 2024, significantly higher than 0.11 as of March 31, 2024[169] Assets and Liabilities - Total assets as of September 30, 2024, were HKD 187,157,000, a decrease from HKD 192,316,000 as of March 31, 2024[10] - The company’s total liabilities increased to HKD 135,607,000 as of September 30, 2024, compared to HKD 132,563,000 as of March 31, 2024[11] - The company’s equity attributable to owners decreased to HKD 49,164,000 from HKD 47,899,000 as of March 31, 2024, indicating a slight increase of 2.6%[11] - As of September 30, 2024, the company had other payables of HKD 64,012,000, an increase from HKD 34,960,000 as of March 31, 2024[62] - The company has a provision of $4,000,000 (approximately HKD 31,100,000) included in other payables and accrued expenses as of September 30, 2024[191] Revenue Breakdown - Revenue from medical device and consumables distribution and services was HKD 13,209,000, down 39.4% from HKD 21,808,000 year-on-year[45] - The company provided hospital operation and management services revenue of HKD 5,471,000, down 15.3% from HKD 6,460,000 in the previous year[45] - Revenue from hospital operations and management services was approximately HKD 5,500,000, compared to HKD 6,500,000 in the previous year[115] - Revenue from China was HKD 18,680, a decrease of 33.4% compared to HKD 28,268 in the same period of 2023[23] Shareholder Information - The company reported a shareholder loss of approximately HKD 17,400,000 for the period, compared to HKD 15,100,000 in the previous fiscal period, with a basic loss per share of HKD 0.0354 (previous year: HKD 0.0319)[92] - The total number of shares issued as of the reporting date is 484,249,000[181] - The company issued 12,650,000 new shares at a subscription price of HKD 0.8 per share, completed on July 17, 2024[88] - The group raised approximately HKD 10,100,000 from the placement and subscription of 12,650,000 shares, with a net amount of approximately HKD 9,800,000 for general working capital[166] Operational Focus and Strategy - The company continues to focus on its operational segments, including the distribution and service of medical devices and consumables, commercial services, and the research and sale of functional foods[18] - The management is actively working to streamline operations and recover receivables while seeking new investors to improve cash flow[102] - The company plans to continue focusing on building a nationwide healthcare distribution platform, leveraging recent government stimulus policies to enhance core competitiveness[125] - The company has entered into a cooperation framework agreement with Wuhan Mingcheng Wangda Pharmaceutical Co., Ltd. for comprehensive distribution projects in the healthcare sector[157] Acquisitions and Investments - The group completed the acquisition of 100% equity in Jinmei Development Limited for HKD 146,000,000, paid through the issuance of promissory notes[100] - The acquisition of 51% of Golden Alliance Limited was completed on June 16, 2023, for a total consideration of HKD 153,000,000[131] - The initial consideration for the acquisition of 100% of Putian Fuxin Molecular Diagnostics Co., Ltd. is HKD 46,666,667, with potential additional consideration of HKD 9,333,333 based on profit conditions[134] - The acquisition of 100% equity in Putian Fuxin (Tianjin) Molecular Diagnostic Technology Co., Ltd. is still pending completion[163] Employee and Operational Metrics - As of September 30, 2024, the group employed 118 staff members, down from 127 as of March 31, 2024[193] - Total employee costs, including director remuneration, were approximately HKD 6,800,000, compared to HKD 5,600,000 in the previous period, reflecting an increase of about 21.4%[193] - The group has established a share option scheme for employees, with 19,050,000 options remaining unexercised as of September 30, 2024[193] - The stock options granted to 14 business consultants are aimed at providing advice for business development and financial operations[187] Compliance and Standards - The company has not applied new or revised Hong Kong Financial Reporting Standards that have been issued but are not yet effective, which are not expected to have a significant impact on the financial statements[17] - The company has adopted all new and revised Hong Kong Financial Reporting Standards effective from April 1, 2024, with no significant changes to accounting policies[34] - The financial statements are prepared in accordance with the historical cost convention and presented in thousands of Hong Kong dollars[34] Legal and Contingent Liabilities - The company has no major litigation or contingent liabilities as of the reporting date[192] - There are no significant contingent liabilities as of September 30, 2024[192] - The company has no outstanding stock options available under the 2012 stock option plan as of the reporting date[181]

Financial Performance - The company reported a loss per share of (3.59) HKD for the six months ended September 30, 2024, correcting a previous figure of (3.54) HKD[4] - The weighted average number of ordinary shares used for calculating the basic loss per share is 484,249, not 491,645 as previously stated[12] Financial Reporting Accuracy - The company clarified that the financial period descriptions in the interim results announcement should refer to the six months ended September 30, 2024, rather than June 30, 2024[10] - The company has acknowledged the errors in the interim results announcement and has made necessary clarifications to ensure accuracy[10] - The company will ensure that all future announcements maintain accuracy and clarity in financial reporting[8] Regulatory Compliance - The financial statements for the six months ended September 30, 2024, will be included in the interim report, which will be published in accordance with listing rules[8] - The company is committed to adhering to the listing rules and providing timely disclosures to stakeholders[8] - The interim report will be published in a timely manner as per regulatory requirements[8] Governance Structure - The board of directors includes three executive directors and three independent non-executive directors, ensuring a diverse governance structure[13] Interim Results Summary - The interim results announcement includes a summary of comprehensive income and other comprehensive income for the specified period[3]

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 18,680,000, compared to HKD 28,268,000 for the same period in 2023, representing a decrease of 33.3%[3] - Gross profit for the period was HKD 1,993,000, down from HKD 5,035,000 in 2023, indicating a decline of 60.5%[3] - The net loss for the period was HKD 17,624,000, compared to a net loss of HKD 16,541,000 in the previous year, reflecting an increase in loss of 6.5%[5] - Total comprehensive loss for the period was HKD 18,130,000, compared to HKD 22,076,000 in 2023, showing a decrease of 17.5%[5] - The company reported a basic and diluted loss per share of HKD 3.54 for the period, compared to HKD 3.19 in the previous year, representing an increase in loss per share of 10.9%[5] - For the six months ended September 30, 2024, the total loss attributable to the company was HKD 63,152,000, compared to a loss of HKD 45,765,000 for the same period in 2023, representing an increase in loss of approximately 38%[14] Revenue Breakdown - Revenue from the medical device and consumables distribution and services segment was HKD 13,209,000, down 39% from HKD 21,808,000 in the previous year[22] - The hospital management services segment generated revenue of HKD 5,471,000, a decrease of 15% from HKD 6,460,000 in the same period last year[22] - The total revenue for the group for the six months ended September 30, 2024, was HKD 18,680,000, down from HKD 28,268,000 in the previous year, indicating a decline of approximately 34%[22] Cash Flow and Liquidity - Cash flow from operating activities for the six months was a net outflow of HKD 11,538,000, compared to an outflow of HKD 14,890,000 in 2023, indicating an improvement of 22.5%[11] - Cash and cash equivalents decreased to HKD 2,409,000 as of September 30, 2024, down from HKD 4,013,000 at the beginning of the period[11] - The company’s total equity as of September 30, 2024, was HKD 51,419,000, compared to HKD 59,753,000 as of the same date in 2023, indicating a decrease of approximately 14%[14] - The current ratio as of September 30, 2024, was 1.08, compared to 1.15 as of March 31, 2024[96] Assets and Liabilities - Non-current assets totaled HKD 62,276,000 as of September 30, 2024, compared to HKD 63,333,000 as of March 31, 2024[7] - Current liabilities increased to HKD 115,282,000 from HKD 112,107,000, reflecting a rise of 2.0%[9] - Total liabilities as of September 30, 2024, were HKD 135,738 thousand, an increase from HKD 132,563 thousand as of March 31, 2024[24] - The asset-liability ratio increased to 0.83 as of September 30, 2024, from 0.11 as of March 31, 2024, due to the inclusion of other payables of approximately HKD 31,100,000[99] Employee and Operational Metrics - As of September 30, 2024, the group employed 118 employees, down from 127 employees as of March 31, 2024[103] - Total employee costs, including director remuneration, were approximately HKD 6,800,000, compared to HKD 5,600,000 in the previous period, reflecting an increase of about 21.4%[103] Legal and Compliance Matters - The company has a contingent liability of USD 4,000,000 (approximately HKD 31,200,000) related to disputed dividends on redeemable convertible cumulative preference shares[49] - The company has ongoing litigation regarding the disputed amount, with a court ruling expected by December 27, 2023[54] - The company has maintained compliance with loan covenants, with no breaches reported as of the latest financial period[44] Strategic Initiatives - The company is enhancing its existing business operations, optimizing its product mix, and seeking new growth points, particularly in the pet vaccine market[67] - The group aims to build a nationwide healthcare distribution platform, leveraging recent government stimulus policies to enhance business opportunities[78] - The board is actively seeking new investors to raise funds and improve cash flow in the second half of the year[77]

Financial Performance - The group reported a significant increase in revenue for the fiscal year ending March 31, 2024, with total revenue reaching HKD 1.2 billion, representing a 15% year-over-year growth[6]. - Revenue for the year ended March 31, 2024, was HKD 59,930,000, a decrease of 21.5% from HKD 76,414,000 in the previous year[57]. - Gross profit for the same period was HKD 13,638,000, down 49.8% from HKD 27,192,000 year-on-year[57]. - The company reported a net loss of HKD 42,497,000 for the year, compared to a net loss of HKD 39,560,000 in the previous year, representing a 4.9% increase in losses[60]. - The total comprehensive loss for the year was HKD 45,951,000, compared to HKD 51,387,000 in the previous year, showing a decrease of 10.6%[60]. - The company's cash and cash equivalents as of March 31, 2024, were approximately HKD 4,000,000, down from HKD 11,500,000 in the previous year[65]. - Current assets were approximately HKD 129,000,000, a decrease from HKD 142,100,000 year-on-year, while current liabilities were approximately HKD 16,900,000, up from HKD 14,900,000[65]. - The debt-to-equity ratio improved to 0.11 from 0.43 in the previous year, indicating a reduction in leverage[69]. - The company incurred a loss attributable to shareholders of approximately HKD 40.2 million, compared to a loss of HKD 42 million in the previous year, with a basic loss per share of HKD 0.0845[120]. - The company recorded revenue of approximately HKD 59.9 million for the fiscal year ending March 31, 2024, a decrease of 21.6% from HKD 76.4 million in the previous fiscal year[119]. User Growth and Market Expansion - User data showed an increase in active users by 20%, reaching 5 million users by the end of the reporting period[6]. - Market expansion plans include entering two new regions, which are projected to increase market share by 5% over the next year[6]. - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12% based on current market trends and user acquisition strategies[6]. Product Development and Innovation - New product launches are expected to contribute an additional HKD 200 million in revenue, with a focus on innovative healthcare solutions[6]. - The company is investing HKD 50 million in research and development for new technologies aimed at enhancing service delivery and operational efficiency[6]. - The company is focusing on optimizing its product mix and developing new customers and products to seek new business growth points[125]. - The company aims to leverage advancements in biotechnology and AI technology to enhance its business performance and achieve qualitative leaps in results[115]. Environmental Impact and Sustainability - The group has not used any packaging materials during the reporting period, emphasizing its commitment to environmental protection[30]. - The hospital's waste management showed no harmful waste consumption in 2024, maintaining a focus on sustainability[41]. - The total greenhouse gas emissions increased to 408 tons in 2024 from 294 tons in 2023, reflecting a 38.8% rise in emissions density per million revenue[49]. - The group has implemented energy management measures, including automatic lighting control systems, to reduce unnecessary energy consumption[34]. - The group emphasizes the use of environmentally friendly materials in daily operations to reduce environmental impact[139]. - The company is continuously monitoring waste management processes to ensure compliance with environmental regulations[194]. Operational Efficiency - The group has implemented new strategies to improve operational efficiency, aiming for a 10% reduction in operational costs by the end of the next fiscal year[6]. - The company reported a net profit margin of 12%, reflecting improved cost management and operational efficiencies[6]. - The group achieved a 50% business growth within six months by restructuring the hospital organization and optimizing business processes[27]. Acquisitions and Strategic Partnerships - The company completed the acquisition of 51% of Golden Alliance Limited, which engages in pharmaceutical product distribution and marketing, but did not record any revenue from this acquisition during the year[133]. - The company entered into an agreement to acquire 100% of Jinmei Development Limited for HKD 146 million, to be paid via promissory notes[185]. - The company acquired 51% of Golden Alliance Limited for HKD 153 million, with payment structured through HKD 47.125 million in promissory notes and up to 87.5 million shares at HKD 1.21 each[181]. Employee Management and Training - The company employed 127 staff members, down from 137 in the previous year, with total employee costs increasing to HKD 15,700,000 from HKD 10,200,000[72]. - The training participation rate for male employees is 17.78%, while for female employees it is 2.44%, indicating a significant gender disparity in training engagement[96]. - The group has established a comprehensive training system, ensuring that every employee has opportunities for personal and professional growth[92]. - The group has a policy requiring all employees, including management, to participate in training annually to maintain and enhance their professional skills[96]. Corporate Governance and Compliance - The group has not reported any incidents of forced labor or child labor during the reporting period, demonstrating a commitment to corporate social responsibility[100]. - The group adheres to health and safety regulations, ensuring a safe working environment and providing necessary protective measures to employees[101]. - The group has established a dedicated medical record management department to ensure compliance with privacy protection laws[149]. - No incidents of data privacy violations or significant security events were recorded during the reporting period, reflecting the group's commitment to data protection[154]. Future Outlook and Challenges - The group anticipates recovery and growth in business due to new government incentives and improved business environment, despite facing unprecedented challenges in the past year[173]. - Various risks, including operational and financial risks, may impact the company's financial performance and future outlook[196]. - The management discussion and analysis section provides detailed insights into the company's financial performance and future development plans[200].

[Financial Performance](index=1&type=section&id=Financial%20Performance) This section presents the Group's financial performance, including consolidated statements, detailed notes, segment results, significant litigation, and share capital changes [Consolidated Statement of Profit or Loss](index=1&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's revenue decreased by 21.6% to HK$59,930 thousands, with net loss widening to HK$42,500 thousands for the year ended March 31, 2024 Consolidated Statement of Profit or Loss Summary | Metric | For the Year Ended March 31, 2024 (HK$ thousands) | For the Year Ended March 31, 2023 (HK$ thousands) | | :--- | :--- | :--- | | **Revenue** | 59,930 | 76,414 | | **Gross Profit** | 13,638 | 27,192 | | **Loss Before Tax** | (42,294) | (39,383) | | **Loss for the Year** | (42,497) | (39,560) | | **Loss Attributable to Owners of the Company** | (40,187) | (42,046) | | **Basic and Diluted Loss Per Share (HK cents)** | (8.45) | (9.86) | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, total assets were HK$192,316 thousands, total liabilities HK$132,563 thousands, and net assets HK$59,753 thousands, a 36.4% decrease Consolidated Statement of Financial Position Summary | Metric | As of March 31, 2024 (HK$ thousands) | As of March 31, 2023 (HK$ thousands) | | :--- | :--- | :--- | | **Non-current Assets** | 63,333 | 79,050 | | **Current Assets** | 128,983 | 142,135 | | **Total Assets** | 192,316 | 221,185 | | **Current Liabilities** | 112,107 | 127,235 | | **Non-current Liabilities** | 20,456 | - | | **Total Liabilities** | 132,563 | 127,235 | | **Net Assets** | 59,753 | 93,950 | | **Equity Attributable to Owners of the Company** | 52,037 | 86,332 | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the financial statements, covering accounting policies, segment information, revenue and expense details, significant litigation, and share capital changes [Operating Segment Information](index=9&type=section&id=4.%20Operating%20Segment%20Information) The Group operates four segments, with medical device distribution as the main revenue source, while hospital operations, commercial services, and functional food segments incurred operating losses FY2024 Segment Performance (HK$ thousands) | Operating Segment | Revenue (HK$ thousands) | Segment Results (HK$ thousands) | | :--- | :--- | :--- | | Medical Device and Consumables Distribution and Services | 45,849 | 382 | | Hospital Operation and Management Services | 14,081 | (20,167) | | Commercial Services | – | (10,571) | | Functional Food R&D and Sales | – | (13,108) | - The Group's business units are categorized into four reportable operating segments based on products and services: medical device and consumables distribution and services, hospital operation and management services, commercial services, and functional food R&D and sales[190](index=190&type=chunk) [Significant Litigation](index=16&type=section&id=13.%20Other%20Payables%20and%20Accrued%20Expenses) The Group is involved in a lawsuit with Capital Foresight Limited regarding a US$4 million loan note, with the court dismissing the claim, but an appeal is scheduled for August 2024 - The court dismissed Capital Foresight's claim against the Company regarding the **US$4 million** loan note on December 20, 2023[210](index=210&type=chunk) - Capital Foresight has appealed the judgment to the Court of Appeal, with the hearing scheduled for **August 27, 2024**[59](index=59&type=chunk) - Based on the court's judgment and legal advice, the Company believes it has no obligation to repay the **US$4 million** loan note, which has been recognized in profit or loss[88](index=88&type=chunk) [Changes in Share Capital](index=19&type=section&id=14.%20Share%20Capital) During the year, the Group underwent a share capital reorganization, reducing the par value of issued shares from HK$1.00 to HK$0.10 to offset accumulated losses - The Company completed a share capital reorganization on **September 20, 2023**, including capital reduction, share split, and share premium reduction, to offset accumulated losses[92](index=92&type=chunk)[121](index=121&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's financial performance, business operations, significant transactions, liquidity, and future strategic outlook [Performance Review](index=21&type=section&id=Performance%20Review) This fiscal year, the Group's total revenue decreased by 21.6% to HK$59,900 thousands, gross profit fell by 50%, while loss attributable to shareholders narrowed to HK$40,200 thousands Performance Summary | Metric | For the Year Ended March 31, 2024 (HK$ thousands) | For the Year Ended March 31, 2023 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 59,900 | 76,400 | -21.6% | | **Gross Profit** | 13,600 | 27,200 | -50.0% | | **Loss Attributable to Shareholders** | (40,200) | (42,000) | -4.3% | - The Directors do not recommend the payment of any final dividend to shareholders[116](index=116&type=chunk) [Review of Business Operations](index=21&type=section&id=Review%20of%20Business%20Operations) All Group businesses faced challenges this year, with medical device distribution revenue down 15.5%, hospital operations incurring losses, and new acquisitions failing to generate revenue - Revenue from medical device and consumables distribution and services was approximately **HK$45,800 thousands**, a **15.5% year-on-year decrease**, with operating profit falling from HK$5,400 thousands to **HK$400 thousands**[68](index=68&type=chunk) - Revenue from hospital operation and management services was approximately **HK$14,100 thousands**, a **33.5% year-on-year decrease**, incurring an operating loss of approximately **HK$6,400 thousands**[96](index=96&type=chunk) - Commercial factoring business generated **no revenue** this year (HK$1,000 thousands last year), with operating loss widening to **HK$10,600 thousands**[72](index=72&type=chunk) - The pharmaceutical product distribution and marketing business (Golden Alliance) acquisition was terminated and disposed of after the fiscal year due to **failure to meet profit guarantee**[100](index=100&type=chunk) - The functional food R&D and sales business (Jinmei Development) acquisition was completed during the year but generated **no revenue** and incurred an operating loss of approximately **HK$13,100 thousands**[138](index=138&type=chunk) [Significant Acquisitions and Disposals](index=25&type=section&id=Significant%20Acquisitions%20and%20Disposals) The Group completed two significant transactions: acquiring 51% of Golden Alliance Limited, later terminated due to unmet profit guarantees, and 100% of Jinmei Development Limited - The Group completed the acquisition of **51%** equity in Golden Alliance Limited in **June 2023**, but terminated and disposed of it in **April 2024** due to failure to meet the **RMB12 million** profit guarantee[79](index=79&type=chunk)[80](index=80&type=chunk)[139](index=139&type=chunk) - The Group completed the acquisition of **100%** equity in Jinmei Development Limited in **November 2023** for **HK$146,000 thousands** paid by promissory notes, with profit guarantees for FY2024 and FY2025[81](index=81&type=chunk)[120](index=120&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The Group's liquidity tightened, with cash and cash equivalents significantly reduced to HK$4,000 thousands, while the gearing ratio decreased to 0.11 despite a slight improvement in the current ratio Liquidity Ratios | Metric | As of March 31, 2024 | As of March 31, 2023 | | :--- | :--- | :--- | | **Cash and Cash Equivalents** | Approx. HK$4,000 thousands | Approx. HK$11,500 thousands | | **Net Current Assets** | Approx. HK$16,900 thousands | Approx. HK$14,900 thousands | | **Current Ratio** | 1.15 | 1.12 | | **Gearing Ratio** | 0.11 | 0.43 | - There were **no fundraising activities** this year, and the net proceeds of approximately **HK$38,800 thousands** from previous convertible bond placements have been fully utilized as planned[40](index=40&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) [Future Outlook](index=24&type=section&id=Future%20Outlook) Despite macroeconomic challenges, management expects business recovery and growth, focusing on building a national healthcare distribution platform by integrating channels and diversifying product offerings - The strategic core is to build a **nationwide healthcare distribution platform**[76](index=76&type=chunk) - Strategies include expanding and integrating online and offline channel resources, and enriching product lines such as pharmaceuticals, health products, care products, and functional foods[76](index=76&type=chunk) - Management believes that despite China's economic recovery being below expectations, the healthcare industry holds **significant potential** for the Group's development[75](index=75&type=chunk) [Corporate Governance](index=32&type=section&id=Corporate%20Governance) This section details the Group's corporate governance practices, including compliance with the code and the Audit Committee's review of annual results [Corporate Governance Practices](index=32&type=section&id=Corporate%20Governance%20Code) The Group maintains high corporate governance standards, largely complying with the Listing Rules' Corporate Governance Code, with one deviation regarding directors' liability insurance - The Board believes the Company complied with applicable code provisions for the year ended March 31, 2024, with **one deviation**[22](index=22&type=chunk) - Per Code Provision C.1.8, the Company should arrange appropriate insurance for Directors, but it **could not find an insurer** to provide such coverage, constituting a deviation[22](index=22&type=chunk) [Review of Annual Results](index=32&type=section&id=Review%20of%20Annual%20Results) The Group's Audit Committee reviewed the audited annual results for the year ended March 31, 2024, discussing audit, internal controls, and financial reporting matters - The Audit Committee, comprising **three independent non-executive Directors**, has reviewed the audited annual results for the year[24](index=24&type=chunk) - The Company's independent auditor, Kaiyuan Xinde Certified Public Accountants Limited, confirmed that the figures in the results announcement align with the Group's consolidated financial statements[26](index=26&type=chunk)

Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 30,344,000, a decrease of 6.1% compared to HKD 32,324,000 in the same period of 2022[4] - Gross profit for the same period was HKD 9,275,000, representing a gross margin of 30.6%, compared to HKD 7,111,000 in 2022[4] - The company reported a loss before tax of HKD 16,485,000, an improvement of 40% from a loss of HKD 27,497,000 in the previous year[4] - Total comprehensive loss for the period was HKD 22,076,000, down from HKD 43,490,000 in the same period last year, indicating a 49.3% reduction[7] - The loss attributable to the owners of the company was HKD 27,611,000, compared to HKD 16,541,000 in the previous year[4] - The company reported a basic and diluted loss per share of HKD 6.61, compared to HKD 3.19 in the same period last year[4] - The comprehensive loss for the period was HKD 19,965,000 in 2023, compared to HKD 42,986,000 in the previous period, indicating an improvement in overall financial performance[14] - The group reported a pre-tax loss of HKD 27,497,000 in 2023, compared to a loss of HKD 16,485,000 in 2022, reflecting a worsening of 66.5%[45] - The group reported a loss attributable to shareholders of approximately HKD 5,100,000, an improvement from a loss of HKD 27,600,000 in the previous fiscal period[83] Assets and Liabilities - Non-current assets as of September 30, 2023, totaled HKD 79,050,000, compared to HKD 230,684,000 as of March 31, 2023[10] - Current assets increased to HKD 142,135,000 from HKD 136,670,000, reflecting a growth of 4.3%[10] - Total assets as of September 30, 2023, amounted to HKD 367,354,000, an increase from HKD 221,185,000 as of March 31, 2023[32] - Total liabilities increased to HKD 286,854,000 as of September 30, 2023, compared to HKD 127,235,000 as of March 31, 2023[33] - The total equity as of September 30, 2023, was HKD 80,500,000, compared to HKD 62,524,000 as of September 30, 2022, showing an increase in total equity[14] - The accumulated losses as of September 30, 2023, were HKD (973,594,000), reflecting ongoing challenges in profitability[14] - The group’s total liabilities included HKD 220,795,000 in corporate and other unallocated liabilities as of September 30, 2023[32] Cash Flow - For the six months ended September 30, 2023, the net cash flow used in operating activities was HKD (14,890,000), compared to HKD (5,320,000) for the same period in 2022, indicating a decline in operational cash flow[16] - The net cash flow used in investing activities was HKD (4,726,000) in 2022, with no data provided for 2023[16] - The net cash flow from financing activities decreased to HKD (271,000) in 2023 from HKD 23,098,000 in 2022, reflecting a significant reduction in financing inflows[16] - The total cash and cash equivalents decreased by HKD 8,089,000 in 2023, compared to an increase of HKD 13,052,000 in 2022[16] - As of September 30, 2023, the cash and bank balances stood at HKD 22,746,000, a decrease from HKD 3,255,000 at the same time in 2022[16] - As of September 30, 2023, the group's cash and cash equivalents were approximately HKD 3,300,000, down from HKD 11,500,000 on March 31, 2023[115] Revenue Breakdown - Revenue from medical device and consumables distribution and services reached HKD 21,808,000 in 2023, a slight increase from HKD 21,683,000 in 2022[38] - Revenue from hospital management services was HKD 10,641,000 in 2023, compared to HKD 6,460,000 in 2022, indicating a growth of 65.5%[38] - Total revenue from pharmaceutical product distribution and marketing was HKD 2,076,000 in 2023, while there was no revenue reported in 2022[38] - The total revenue for the group was HKD 30,344,000 in 2023, down from HKD 32,324,000 in 2022, representing a decrease of 6.1%[35] - Revenue from the distribution of medical devices and consumables was approximately HKD 21,800,000, slightly up from HKD 21,700,000 in the previous year[85] - Revenue from hospital management services decreased to approximately HKD 6,500,000 from HKD 10,600,000 in the previous year, resulting in an operating loss of approximately HKD 3,100,000[88] - The group recorded revenue of approximately HKD 2,100,000 from pharmaceutical product distribution and marketing, with an equivalent operating loss[92] Share Capital and Equity - The company issued new shares amounting to HKD 8,925,000 during the period, contributing to the increase in equity[14] - As of September 30, 2023, the company has issued a total of 478,994,763 shares with a capital of 47,900 thousand HKD after a capital reduction[73] - The company completed the acquisition of 51% of Golden Alliance Limited for a total consideration of 153,000,000 HKD, which includes the issuance of shares and promissory notes[75] - The company has undergone a capital reduction, decreasing the par value of shares from 1.00 HKD to 0.10 HKD, effective September 20, 2023[73] - The company proposed a capital reduction by canceling paid-up capital of HKD 0.90 per share, reducing the par value of each issued share from HKD 1.00 to HKD 0.10[109] - After the capital reduction and share split, the authorized share capital will be HKD 10,000,000,000, divided into 100,000,000,000 new shares with a par value of HKD 0.10 each[110] Legal and Regulatory Matters - The company has indicated that the litigation announcement of $4,000,000 is attributed to it, based on the alleged breach of fiduciary duty by former director Li and unauthorized signing of the Capital Foresight agreement[69] - The court ruling regarding the litigation cases HCA2549/2017 and HCA2569/2017 is expected by December 27, 2023[70] - The company is involved in ongoing legal disputes concerning the validity of loan notes issued to Li Hong, which are under serious contention[69] - There were no significant contingent liabilities or major litigation as of September 30, 2023[119][118] Strategic Focus and Future Outlook - The company is focusing on expanding its market presence and enhancing its product offerings to drive future growth[5] - The group continues to operate its commercial factoring business, providing stable income and profits while improving service quality in hospitals[93] - The group has strengthened its existing business, optimized its product portfolio, and sought new growth points, particularly in the promotion of pet vaccines[87] - The healthcare industry in China is expected to continue its diversified growth due to urbanization and aging population, creating significant development potential for the group[95] - The group anticipates business recovery and growth in the second half of the year, supported by new government incentive policies aimed at improving the overall business environment[95] - The group plans to focus on building a nationwide healthcare distribution platform, integrating offline and online resources, and enhancing product offerings in pharmaceuticals, health products, and functional foods[96] Employee and Share Option Information - The total employee cost for the group was approximately HKD 5,600,000, compared to HKD 5,100,000 in the previous period, with 133 employees as of September 30, 2023[122] - The company has 19,050,000 unexercised share options as of September 30, 2023[122] - The 2023 Share Option Scheme allows for the issuance of up to 47,899,476 shares, which is 10% of the total issued shares as of September 30, 2023[134] - No share options were granted, exercised, cancelled, or lapsed under the 2023 Share Option Scheme between September 18, 2023, and September 30, 2023[136] - The 2012 Share Option Scheme remains unchanged during the reporting period[132] - The 2023 Share Option Scheme was approved by shareholders on September 18, 2023, and is effective for 10 years[133]