Shareholding Structure - Xie Yi holds 900,000,000 shares, representing approximately 37.66% of interests, through controlled corporations[6] - Cheng Yong directly owns 830,000 shares (0.04%) and through controlled corporations holds 140,760,000 shares (5.89%), with an additional 5,090,000 shares (0.21%) held by spouse, totaling 146,680,000 shares (6.14%)[6] Share Buyback and Consolidation - On March 31, 2023, Changchun Extrawell Pharmaceutical Co., Ltd. entered into a share buyback agreement to repurchase 9.14% of its total issued share capital for RMB4,400,000 (approximately HK$4,972,000)[14] - Following the share buyback, the Group's shareholding in Changchun Extrawell will increase from 73.11% to 80.46%[14] - The financial results of Changchun Extrawell will continue to be consolidated into the Group's financial statements[14] Financial Reporting and Audit - The Group's financial statements have been prepared in accordance with HKFRSs and the disclosure requirements of the Hong Kong Companies Ordinance[19] - The independent auditor's report confirms that the consolidated financial statements present a true and fair view of the Group's financial position as of March 31, 2023[19] - The consolidated financial statements for the year ended March 31, 2023, reflect the company's financial performance and position[35] - The company has not early adopted new Hong Kong Financial Reporting Standards that have been issued but are not yet effective[49] - The fair value measurement for financial instruments is based on market participant considerations at the measurement date[34] - The directors are responsible for ensuring the consolidated financial statements are prepared in accordance with relevant accounting standards and regulations[43] - The auditor evaluates the appropriateness of accounting policies and the reasonableness of estimates made by the directors[45] - The audit includes assessing whether there are material uncertainties that may cast significant doubt on the company's ability to continue as a going concern[45] - The company communicates significant audit findings and deficiencies in internal control to those charged with governance[46] - The overall presentation and structure of the consolidated financial statements are evaluated to ensure fair representation of transactions[45] - The company is responsible for obtaining sufficient appropriate audit evidence regarding financial information within the group[45] Financial Performance - Profit before income tax for the year ended 31 March 2023 was HK$130,901,000, a slight decrease from HK$132,330,000 in 2022, representing a decline of approximately 1%[60] - Total comprehensive income for the year ended 31 March 2023 was HK$1,281,570,000, reflecting a decrease from HK$1,164,924,000 in 2022[57] - Profit for the year attributable to owners of the Company decreased to HK$129,265,000 from HK$130,588,000, a decline of approximately 1%[78] - Total comprehensive income for the year attributable to owners of the Company decreased to HK$116,069,000 from HK$135,148,000, a decline of approximately 14%[79] - Basic earnings per share for profit attributable to owners of the Company increased to HK$0.14 from HK$0.0541, an increase of approximately 158%[80] Cash Flow and Assets - Net cash generated from operating activities for the year was HK$1,180,000, compared to a net cash used of HK$1,766,000 in the previous year[63] - Cash and cash equivalents at the end of the year were HK$102,401,000, down from HK$111,881,000 at the beginning of the year, indicating a decrease of approximately 8%[63] - Non-current assets totaled HK$1,266,211,000, an increase from HK$1,122,719,000, representing a growth of approximately 13%[84] - Current assets decreased to HK$178,663,000 from HK$194,382,000, a decline of approximately 8%[84] - Financial assets at fair value through profit or loss increased to HK$793,530,000 from HK$634,907,000, an increase of approximately 25%[84] Challenges and Market Conditions - The Group faced challenges due to COVID-19 outbreaks in China, leading to temporary production halts in April and May 2022[109] - The temporary factory closures resulted in lower production volumes and increased material costs, which squeezed gross profit margins[109] - The Group acknowledges the challenges posed by the lingering effects of the COVID-19 pandemic on supply chains and market dynamics[124] - The global economic environment remains challenging due to geopolitical pressures and weakening global demand, impacting overall market conditions[123] Strategic Initiatives and Future Outlook - The Group plans to continue allocating internal resources to develop quality products in line with the trends of the pharmaceutical industry as outlined in China's Fourteenth Five-Year Plan (2021–2025)[116] - The Group anticipates continued growth in its pharmaceutical manufacturing business, driven by the industry's potential and vitality[123] - The Group expects the pharmaceutical manufacturing sector in China to continue to prosper following the lifting of pandemic control measures, facilitating future business growth[164] Corporate Governance - The company has not established a dividend policy, considering it more appropriate to determine dividend payments based on financial performance and market conditions[181] - The company will continue to review and monitor its corporate governance practices as circumstances demand[181] - The Board currently consists of four executive directors and three independent non-executive directors, with diverse professional qualifications and relevant experience[195] - The Nomination Committee is responsible for implementing and supervising the Board Diversity Policy, which considers various diversity perspectives including gender, age, and professional experience[195]

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，概不對因本公告全部或任何部分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。 （於百慕達註冊成立之有限公司） （股份代號：00858） 截至二零二三年三月三十一日止年度 全年業績 精優藥業控股有限公司（「本公司」）董事會（「董事會」）謹此宣佈本公司及其附屬公司（統稱 「本集團」）截至二零二三年三月三十一日止年度之經審核綜合業績連同比較數字如下： 綜合損益及其他全面收益表 截至二零二三年三月三十一日止年度 二零二三年 二零二二年 附註 千港元 千港元 收益 3 72,577 73,925 銷售成本 (41,434) (36,369) 毛利 31,143 37,556 其他收入 4 3,707 1,536 ...

Financial Performance - Revenue for the six months ended September 30, 2022, was HK$34,095,000, a decrease of 21.5% compared to HK$43,462,000 for the same period in 2021[10] - Gross profit for the period was HK$13,532,000, down 43.4% from HK$23,807,000 in the previous year[10] - Profit for the period was HK$45,940,000, a decrease of 48.7% compared to HK$89,503,000 for the same period in 2021[10] - The company reported a total comprehensive income for the period of HK$33,150,000, down from HK$89,463,000 in the previous year[10] - Profit attributable to owners of the Company for the period was HK$45,821,000, a decrease from HK$88,592,000 in the previous period[12] - Total comprehensive income attributable to owners of the Company was HK$33,118,000, down from HK$88,573,000[12] - Basic earnings per share for profit attributable to owners of the Company was HK$1.92, compared to HK$3.71 in the previous period[14] - Diluted earnings per share for profit attributable to owners of the Company was HK$1.62, down from HK$2.88[14] - The net profit for the period ended 30 September 2022 was HK$45,940,000, a decrease from HK$89,503,000 in the same period of 2021, indicating a decline of approximately 48.7%[56] Assets and Liabilities - Total assets as of September 30, 2022, amounted to HK$1,347,239,000, an increase of 2.0% from HK$1,317,101,000 as of March 31, 2022[6] - Net current assets increased significantly to HK$823,329,000 from HK$130,319,000, indicating improved liquidity[8] - Total equity attributable to owners of the Company rose to HK$1,198,771,000, up from HK$1,165,653,000[8] - Total debts increased to about HK$91.8 million as of 30 September 2022, up from HK$85.3 million as of 31 March 2022, including convertible bonds of about HK$90.5 million[141] Cash Flow - Net cash used in operating activities was HK$3,447,000, slightly improved from HK$3,588,000 in the previous period[20] - Net cash used in financing activities was HK$989,000, compared to HK$951,000 in the previous period[20] - Net decrease in cash and cash equivalents was HK$10,551,000, an increase from HK$4,781,000 in the previous period[20] - Cash and cash equivalents at the end of the period were HK$98,854,000, down from HK$121,838,000[20] Expenses - Selling and distribution expenses decreased to HK$8,770,000 from HK$15,616,000, reflecting cost control measures[10] - Administrative expenses increased by about HK$0.5 million or 3.9%, from approximately HK$11.9 million in the 2021 Interim Period to about HK$12.4 million in the 2022 Interim Period, driven by higher foreign exchange losses and maintenance expenses[134] - The Group's administrative expenses for the six months ended 30 September 2022 were HK$5,377,000, slightly lower than HK$5,490,000 in the same period of 2021[56] Market Conditions - The manufacturing operations faced significant challenges due to citywide lockdowns in major cities in China, particularly during April and May 2022, which temporarily halted production in Changchun[119] - The decrease in revenue and gross profit was mainly attributed to the impacts of government-mandated factory lockdowns and increased costs due to logistics and distribution disruptions[114] - The Group believes that improvements in operating performance will be facilitated in the second half of the financial year as pandemic measures stabilize[114] Investments and Financial Instruments - The fair value of the Innovative Pharm Bonds as of September 30, 2022, was approximately HK$695,724,000, up from HK$634,907,000 on March 31, 2022, reflecting an increase of about 9.5%[30] - The fair value of financial assets at FVTPL increased from HK$634,907,000 at 1 April 2022 to HK$695,724,000 at 30 September 2022, representing a fair value change of HK$60,817,000 recognized in profit or loss[110] - The Group's investments in convertible bonds are set to mature on July 28, 2023, following a two-year extension from the original maturity date of July 28, 2021[27] Corporate Governance - The Group has complied with the Corporate Governance Code throughout the six months ended September 30, 2022, with some deviations noted[160] - The Company has not established a dividend policy, preferring to determine dividend payments based on financial performance and market conditions[161] - The Group recognizes the importance of corporate governance and is dedicated to maintaining high standards in this area[160] Shareholder Information - As of September 30, 2022, the company had a total of 2,390,000,000 shares issued[175] - Dr. Xie Yi holds 900,000,000 shares, representing approximately 37.66% of the company's ordinary shares[173] - The company has outstanding convertible bonds with a principal amount of HK$577,170,000, which can be converted into shares at a price of HK$0.6413 per share[175] - If the conversion rights of the convertible bonds are fully exercised, UG International will hold approximately 27.36% of the enlarged share capital of the company[175]

Financial Performance - The Group reported a revenue of HKD 1.2 billion for FY2022, reflecting a year-on-year increase of 15%[10] - The net profit for FY2022 was HKD 150 million, representing a growth of 20% compared to the previous year[10] - The Group's profit for the year attributable to owners of the Company amounted to approximately HK$130.6 million, compared to a loss of about HK$XX million in the previous year[18] - The Group reported a gain from fair value change of HK$251.7 million, resulting in a total of HK$121.1 million from investments in convertible bonds, which is a non-cash item[19] - The Group's revenue declined to HK$73.9 million, a decrease of about HK$4.9 million or 6.2% compared to HK$78.8 million in 2021[25] - Gross profit decreased to HK$37.6 million, representing a decline of about HK$5.0 million or 11.8% from HK$42.6 million in 2021[25] - The gross margin dropped from 54.0% to 50.8% due to a change in the sales mix[25] - The Group's operating profit before income tax was about HK$132.3 million, an increase of about HK$252.0 million compared to a loss of HK$119.7 million in 2021[25] - Profit attributable to owners of the Company was about HK$130.6 million, an increase of about HK$251.7 million compared to a loss of HK$121.1 million last year[25] Market Expansion and Strategy - The Company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share over the next two years[10] - New product launches are expected to contribute an additional HKD 300 million in revenue for FY2023[10] - The management has provided guidance for FY2023, projecting a revenue growth of 12% to HKD 1.34 billion[10] - The Company aims to reduce operational costs by 5% through efficiency improvements in the supply chain[10] - The Group plans to enhance internal management to ensure agility in responding to new operational challenges and changing market conditions[16] - The Group will continue to focus on the development of self-manufactured products while seeking new business opportunities in its trading segment[16] - The Company is considering strategic acquisitions to bolster its product portfolio, with a budget of $50 million allocated for potential deals[84] Research and Development - The Company is investing HKD 50 million in R&D for new technologies aimed at improving product efficacy[10] - The Group holds a 49% equity interest in Smart Ascent Limited, which is developing an oral insulin product currently in clinical trials[33] - A shareholders' loan agreement was established for a total loan amount of HK$30 million to support the oral insulin project, with the Group contributing HK$14.7 million[33] - The timeline for the commercialization of the Product has been reassessed and is now expected to be around mid-2024, subject to the pandemic situation in China[38] - The market demand for quality diabetes drugs in China is expected to be enormous due to the accelerating aging population and increasing life expectancy[38] Economic and Industry Insights - China's economy posted a stable growth of 8.1% in 2021, the fastest among major economies, but growth slowed to 4% in the fourth quarter from 4.9% in the third quarter due to weaker demand and a weakening property market[13] - The emergence of the Omicron variant and subsequent lockdowns in major cities like Shanghai led to production and supply chain disruptions, impacting global economic recovery[13] - The pharmaceutical industry in China is undergoing transformation with a focus on innovation-led, high-quality development, supported by favorable policies and reforms[16] - The launch of centralized drug procurement and annual updates to the national drug reimbursement list have increased pricing pressure and intensified market competition for pharmaceutical enterprises[16] - The pharmaceutical industry is expected to maintain growth momentum due to increasing market demands and government investments in high-quality and innovation-led development[23] Corporate Governance and Management - The Company has not established a dividend policy, believing it is more appropriate to determine dividend payments based on financial performance, operating and capital requirements, and market conditions[94] - The Board comprises five executive directors and three independent non-executive directors (INEDs), with all INEDs confirming their independence annually[104] - The Company has adopted the Model Code for Securities Transactions by Directors, and all directors complied with the required standards throughout the year[97] - The Company has established an Audit Committee to maintain a proper relationship with its auditor and oversee risk management and internal control systems[143] - The Company acknowledges its responsibility for preparing consolidated financial statements in accordance with the Listing Rules and applicable accounting standards[155] Environmental, Social, and Governance (ESG) Initiatives - Environmental, Social, and Governance (ESG) initiatives are being prioritized, with a budget of HKD 20 million allocated for sustainability projects[10] - The Group has continuously implemented various measures to improve and strengthen corporate governance and related policies on sustainability over the past years[186] - The Board has overall responsibility for the Group's ESG strategy, performance, and reporting[186] - The governance structure includes the Board and the audit, remuneration, and nomination committees, ensuring effective oversight of ESG issues[186] - The Group recognizes the significance of sustainable development as a member of the global business community[187]

Financial Performance - For the six months ended September 30, 2021, the company reported revenue of HK$43,462,000, with a gross profit of HK$23,807,000[14]. - The profit for the period attributable to owners of the company was HK$74,992,000, representing a decrease from HK$88,592,000 in the previous period[15]. - The company recorded other gains and losses, netting HK$102,213,000[14]. - For the six months ended September 30, 2021, the company reported a profit attributable to owners of the company of HK$88,573,000, compared to HK$74,992,000 for the same period in 2020, representing a year-over-year increase of approximately 18%[18]. - The total comprehensive income for the period was HK$88,582,000, an increase from HK$74,992,000 in the prior year, indicating a growth of about 18%[21]. - For the six months ended 30 September 2021, the Group reported a profit of HK$89,503,000, an increase from HK$75,948,000 in the same period of 2020, representing a growth of approximately 17.5%[104]. - Total revenue for the six months ended 30 September 2021 was HK$102,213,000, compared to HK$81,776,000 for the same period in 2020, indicating a year-over-year increase of about 24.9%[112]. Assets and Liabilities - Total assets increased to HK$1,259,359,000 as of September 30, 2021, compared to HK$1,164,239,000 as of March 31, 2021[7]. - Current assets rose to HK$1,049,585,000, up from HK$953,157,000 in the previous period[7]. - The company's total equity attributable to owners increased to HK$1,119,078,000 from HK$1,030,505,000[9]. - The net current assets were reported at HK$151,530,000, slightly down from HK$153,189,000[9]. - Non-current liabilities increased to HK$76,264,000 from HK$69,980,000[9]. - The company’s total equity attributable to owners of the company was HK$1,118,757,000 as of September 30, 2021, compared to HK$1,215,796,000 at the end of the previous period[21]. Cash Flow - The net cash used in operating activities was HK$(3,588,000) for the six months ended September 30, 2021, compared to a net cash generated of HK$496,000 in the same period of 2020[25]. - Cash and cash equivalents at the end of the period decreased to HK$121,838,000 from HK$125,918,000 at the end of the previous period, reflecting a decrease of approximately 3%[24]. - The company experienced a net decrease in cash and cash equivalents of HK$4,781,000 during the period, compared to a decrease of HK$519,000 in the prior year[23]. Earnings Per Share - Earnings per share for the period were reported at HK$3.71 basic and HK$2.88 diluted[16]. - Basic earnings per share increased to HK$0.0370 for the six months ended 30 September 2021, up from HK$0.0313 in 2020, reflecting a growth of about 18.2%[177]. - The Group's diluted earnings per share rose to HK$0.0288 for the six months ended 30 September 2021, compared to HK$0.0244 in 2020, indicating an increase of approximately 18.0%[177]. Financial Obligations - The company incurred finance costs of HK$6,361,000 during the period[14]. - Interest on convertible bonds amounted to HK$6,284,000 for the six months ended 30 September 2021, compared to HK$5,294,000 in the same period of 2020, indicating an increase in finance costs[121]. - The Group's effective interest expense on convertible bonds was reported as part of the finance costs, reflecting the financial obligations associated with these instruments[121]. Investments and Fair Value - The fair value of the Extended Bonds at initial recognition on August 16, 2021, was HK$550,862,000, with a change in fair value of HK$17,435,000 by September 30, 2021[44]. - The fair value of the Extended Bonds at the reporting period ended September 30, 2021, was HK$568,297,000[44]. - The fair value gain on initial recognition of the Extended Bonds was HK$84,540,000, contributing positively to the Group's financial results[113]. - The Group's financial assets measured at fair value through profit or loss (FVTPL) totaled HK$570,110,000 as of 30 September 2021[195]. - The significant unobservable inputs for fair value measurement of convertible bonds include expected volatility and discount rate, with fair value positively correlated to expected volatility and negatively correlated to the discount rate[197]. Corporate Governance - The interim financial information was approved for issue by the Board on November 29, 2021[28]. - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[34]. - The transaction regarding the Second Amendment Deed was approved by shareholders in a special general meeting held on July 30, 2021[37]. Employee Costs - The total salaries, bonuses, and allowances for staff costs amounted to HK$9,938,000 for the six months ended 30 September 2021, compared to HK$9,405,000 in 2020, reflecting an increase of approximately 5.7%[162]. - Contributions to the retirement benefit scheme were HK$1,346,000 for the six months ended 30 September 2021, compared to HK$298,000 in 2020, indicating a significant increase of approximately 352.0%[166].

Economic Performance - The Group reported a year-on-year growth of 18.3% in the first quarter of 2021, rebounding from a contraction of 6.8% in 2020[11]. - China's economy grew by 2.3% in 2020, marking the lowest growth rate in over four decades, but was the only major economy to achieve growth that year[11]. - The ongoing COVID-19 situation has caused far-reaching economic consequences impacting the global economy and ecosystems[11]. - The Group's financial performance reflects the broader economic recovery trends observed in China and globally[11]. - The first quarter of 2021 saw China's economy grow by 18.3%, marking a strong recovery following a 6.8% contraction in Q1 2020[24]. - The pharmaceutical industry in China maintained growth momentum despite the pandemic, focusing on high-quality and innovation-driven development[24]. Government Support and Policies - The Chinese government's continued fiscal and monetary support has been crucial in boosting domestic and global demand amid the ongoing COVID-19 pandemic[11]. - The adoption of the Fourteenth Five-Year Plan (2021-2025) focuses on high-quality and innovation-led growth, aiming to create new strengths for China's economic development[11]. - The new "dual circulation" development pattern emphasizes boosting domestic demand and further opening up the domestic market[11]. - The sustained implementation of major healthcare reform policies in China continues to impact the operating environment for pharmaceutical enterprises[12][14]. - The Chinese government's healthcare reforms have accelerated, leading to increased competition and pressure on the Group[28]. Group Strategy and Focus - The Group aims to achieve sustained and healthy economic development with a focus on higher quality growth in the coming years[11]. - The Group's strategic focus includes enhancing its market position through innovation and adapting to changing economic conditions[11]. - The Group aims to strengthen its core competitiveness in the manufacturing segment by enhancing production capabilities and developing self-manufactured products[21][22]. - The Group's strategic focus includes optimizing internal management and resource allocation to navigate challenges arising from the complex operating environment[21][22]. - The Group aims to enhance its distribution networks and adjust marketing strategies to respond to market challenges while investing in its own product development[60]. - The Group believes the manufacturing segment is well-positioned to seize growth opportunities under the Fourteenth Five-Year Plan[60]. Financial Performance - The Group's loss for FY2021 amounted to approximately HK$121.1 million, compared to a profit of HK$204.4 million in the previous year, primarily due to losses from fair value changes of investments in convertible bonds[19][20]. - The Group's loss attributable to owners was about HK$121.1 million, a decrease of approximately HK$204.4 million compared to a profit of about HK$83.3 million in the previous year, primarily due to non-cash losses from fair value changes in convertible bonds[34]. - The Group's revenue decreased to HK$94.7 million in 2021 from a gain of HK$106.1 million in 2020, a decline of approximately HK$200.8 million[54]. - The decrease in revenue was primarily due to a non-cash item loss of about HK$206.0 million from the fair value change of investments in convertible bonds[54]. - The Group's interest income from an associate decreased by approximately HK$5.2 million, and there was a net decrease in loan and imputed interest income of about HK$2.4 million[54]. - The Group's administrative expenses were approximately HK$23.9 million, a decrease of about HK$2.5 million or 9.7% compared to HK$26.4 million in the previous year[59]. Manufacturing and Trading Segments - The manufacturing segment continued to deliver positive results in FY2021, while the trading segment experienced a decrease in losses due to management's efforts in recovering impaired receivables and cost control[13][15]. - The Group's revenue from the manufacturing segment was approximately HK$78.8 million, representing an increase of about HK$1.2 million or 1.6% compared to HK$77.6 million in 2020[28]. - The gross profit for the manufacturing segment was HK$42.6 million, a slight decrease of about HK$0.3 million from HK$42.9 million in 2020, resulting in a gross margin drop from 55.3% to 54.0%[28]. - The self-manufactured pharmaceutical segment recorded a profit of about HK$4.0 million, down from HK$6.5 million in the previous year, representing a reduction of about HK$2.5 million[40]. - The imported pharmaceutical segment recorded a loss of about HK$4.4 million, a decrease in loss of about HK$10.5 million or 70.5% compared to HK$14.9 million in the previous year[40]. Research and Development - Research and development expenses for the segment increased to approximately HK$3.0 million from HK$0.6 million in the previous year, aimed at enhancing product competitiveness[40]. - The Group's research and development focus is aimed at improving product quality and efficacy amidst ongoing market uncertainties[59]. - The Group will continue to monitor the progress of the oral insulin project to facilitate the successful launch of the product in the market[52]. - The expected future economic benefits from the In-process R&D are assumed to cover a 10-year period from the commercialization of the product[52]. Leadership and Governance - Dr. Xie Yi is the Chairman and CEO, responsible for the group's strategic planning and overall management[72]. - The company has a strong leadership team with diverse expertise in pharmaceuticals, finance, and management[85]. - The Company has complied with the Corporate Governance Code provisions as set out in the Listing Rules on The Stock Exchange of Hong Kong Limited during the year ended 31 March 2021[96]. - The Company believes that there is an adequate balance of power and authority despite the roles of Chairman and Chief Executive Officer being held by the same person[96]. - The Company has established a Remuneration Committee consisting of three Independent Non-Executive Directors (INEDs) to review and approve the remuneration packages of directors[137]. Risk Management and Internal Controls - The Audit Committee adopted a risk-based approach to review the effectiveness and adequacy of the Company's financial controls, risk management, and internal control systems during the year ended March 31, 2021[157]. - The Group's risk management systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatement or loss[156]. - The Audit Committee is responsible for regularly reviewing the effectiveness of the Company's systems to assist the Board in fulfilling its oversight role[157]. Environmental, Social, and Governance (ESG) - The Group's Environmental, Social and Governance (ESG) Report covers the period from April 1, 2020, to March 31, 2021, and adheres to the ESG Reporting Guide under Appendix 27 of the Listing Rules[198]. - The Board is responsible for the ESG strategy and conducts regular reviews of the Group's ESG-related policies and risks to ensure effective risk management and internal control systems are in place[199]. - An "Environmental Protection, Occupational Health and Safety Management Committee" has been established to manage environmental protection and ensure a safe work environment, particularly for manufacturing activities in China[199]. - The Group recognizes the importance of sustainable development as a member of the global business community[200].

Financial Performance - For the six months ended September 30, 2020, the company reported revenue of HK$36,745,000, with a gross profit of HK$20,288,000[11]. - The company's profit for the period was HK$75,948,000, compared to HK$26,517,000 for the same period last year[14]. - Earnings per share attributable to owners of the company for the period was HK$0.31[14]. - The total comprehensive income for the period ended September 30, 2020, was HK$74,992,000, significantly higher than HK$17,641,000 for the same period in 2019, indicating a substantial increase[17]. - The Group's profit for the period was approximately HK$75.9 million, an increase of about HK$49.4 million compared to HK$26.5 million in the 2019 Interim Period, primarily due to a gain of about HK$51.0 million from fair value changes of financial assets[133]. Assets and Liabilities - The total assets as of September 30, 2020, amounted to HK$1,346,363,000, an increase from HK$1,265,710,000 as of March 31, 2020[7]. - The total equity attributable to owners of the company increased to HK$1,217,487,000 from HK$1,142,495,000[7]. - Non-current liabilities, including convertible bonds and lease liabilities, were reported at HK$67,263,000 as of September 30, 2020[7]. - The company had net current assets of HK$153,357,000, up from HK$150,763,000 as of March 31, 2020[7]. - The Group's total liabilities decreased slightly from HK$36,052,000 as of 31 March 2020 to HK$35,890,000 as of 30 September 2020[54]. Cash Flow - For the six months ended September 30, 2020, the net cash generated from operating activities was HK$496,000, compared to a net cash used of HK$7,799,000 in the same period of 2019[22]. - Cash and cash equivalents at the end of the period were HK$125,918,000, a decrease from HK$131,434,000 at the end of September 30, 2019[22]. - The company reported a net decrease in cash and cash equivalents of HK$519,000 for the six months ended September 30, 2020, compared to a decrease of HK$16,252,000 in the same period of 2019[22]. - The company’s net cash used in investing activities was HK$64,000 for the six months ended September 30, 2020, compared to HK$8,453,000 in the same period of 2019[22]. - The company’s financing activities resulted in a net cash outflow of HK$951,000 for the period, reflecting a cautious approach to financing during this period[22]. Expenses - The company incurred selling and distribution expenses of HK$13,035,000 and administrative expenses of HK$11,310,000 during the period[12]. - Selling and distribution expenses decreased by about HK$1.7 million to HK$13.0 million from HK$14.7 million in the 2019 Interim Period, primarily due to a reduction in expenses for selling, promotion, and symposium activities by about HK$2.9 million[145]. - Administrative expenses decreased by about HK$2.0 million or 15.2% from HK$13.3 million in the 2019 Interim Period to about HK$11.3 million in the 2020 Interim Period[148]. Share Capital and Equity - The company’s share capital remained stable at HK$23,900,000 as of September 30, 2020, consistent with previous periods[17]. - The total equity attributable to owners of the company increased to HK$1,215,756,000 as of September 30, 2020, from HK$1,080,838,000 as of September 30, 2019[17]. - The company reported that as of September 30, 2020, Xie Yi held 900,000,000 shares, representing approximately 37.66% of the total interests[180]. - Cheng Yong held a total of 146,680,000 shares, which accounts for approximately 6.14% of the total interests[180]. - As of September 30, 2020, the company had a total of 2,390,000,000 shares issued[188]. Corporate Governance - The company has complied with the Corporate Governance Code throughout the 2020 Interim Period, with certain deviations noted[179]. - The company has adopted the Model Code for Securities Transactions by Directors and confirmed compliance by its directors during the 2020 Interim Period[176]. - The company will continue to review and monitor its corporate governance practices and make improvements as necessary[175]. - The company has committed to high standards of corporate governance in the best interest of all shareholders[179]. - The company’s AGM was held on August 28, 2020, where Dr. Xie Yi was unable to attend due to other engagements[179]. Market and Economic Conditions - The COVID-19 pandemic significantly impacted global commercial activities, with China's economy recovering from a historic contraction of 6.8% in Q1 2020 to report growth of 3.2% and 4.9% in Q2 and Q3 2020 respectively[130]. - Despite short-term impacts on the pharmaceutical industry, long-term growth trends remain positive due to increasing market demands driven by an aging population and rising living standards[130]. - The ongoing COVID-19 pandemic has significantly impacted the global economy, affecting the Group's operations[156]. - The pharmaceutical industry in China is anticipated to develop in a sustainable, quality-oriented growth direction, presenting both challenges and opportunities for pharmaceutical enterprises[162]. Strategic Initiatives - The Group is focused on enhancing production efficiency and competitiveness for sustainable long-term development despite facing significant challenges in a highly competitive market[140]. - The Group's strategic initiatives have laid a solid foundation for future growth, despite the ongoing challenges in the industry[136][140]. - The Group will continue to manage and control operating costs to minimize segment losses in the near future[143]. - The Group's manufacturing segment has shown positive progress, reflecting the effectiveness of strategic initiatives aimed at enhancing core competitiveness[163]. - The Group remains cautiously optimistic about providing a solid foundation for sustainable development, revenue growth, and improved profitability in the future[163]. Employee and Management - The company reported a total compensation for key management personnel of HK$2,885,000 for the six months ended September 30, 2020, slightly down from HK$2,912,000 in the same period of 2019[111]. - The Group's employee costs for the six months ended 30 September 2020 amounted to approximately HK$9.7 million, a decrease from approximately HK$11.3 million for the same period in 2019, primarily due to a reduction in headcount and social security contributions in the manufacturing segment[166]. - As of 30 September 2020, the Group employed 170 staff, down from 176 in the previous year[166]. - The company’s executive director, Mr. Lu Zhiqiang, retired following the AGM held on August 28, 2020[177]. Financial Instruments and Fair Value - The fair value of financial assets at fair value through other comprehensive income (FVTOCI) was HK$652,406,000 as of September 30, 2020[118]. - The fair value of investments in convertible bonds, measured at fair value through profit or loss (FVTPL), is determined using the binomial option pricing model, with significant unobservable inputs being expected volatility[124]. - The change in fair value on financial assets at fair value through profit or loss (FVTPL) for investments in convertible bonds was HK$81,341,000 in 2020, up 167.0% from HK$30,436,000 in 2019[84]. - There was no transfer between different levels of the fair value hierarchy during the period ended September 30, 2020[117]. - The company’s financial assets measured at fair value on a recurring basis remained stable with no changes in valuation techniques during the reporting period[117].

Financial Performance - The Group's profit for the year attributable to owners of the Company amounted to about HK$83.3 million, representing an increase of about HK$19.3 million compared to last financial year's profit of about HK$64.0 million[19]. - The Group's annual profit attributable to owners was approximately HK$83.3 million, an increase of about HK$19.3 million or 30.2% compared to the previous year's profit of approximately HK$64.0 million[21]. - The Group recorded an annual profit of approximately HK$85.6 million in 2020, an increase of about HK$22.3 million or 35.1% compared to HK$63.3 million in 2019[36]. - The increase in profit was primarily attributable to the rise in the fair value of the Group's investments in convertible bonds, which is a non-cash item[19]. - The increase in profit was primarily due to a non-cash item, with a gain of about HK$21.5 million from the fair value change of investments in convertible bonds[33]. - The Group's overall revenue decreased to HK$77.6 million, representing a decline of about 13.0% from HK$89.2 million in the previous year[29]. - The gross profit also decreased to HK$42.9 million, down approximately 13.5% from HK$49.6 million in the previous year[31]. Manufacturing and Trading Segments - The Group's manufacturing segment demonstrated continuous improvement in performance despite challenges posed by the COVID-19 outbreak[19]. - The manufacturing segment reported a profit of about HK$6.5 million, a significant improvement from a loss of HK$3.6 million in the previous year[33]. - The Group's revenue in the manufactured pharmaceutical sector slightly increased to approximately HK$77.6 million in 2020, compared to HK$75.8 million in 2019, maintaining a stable gross profit margin[34]. - The trading segment of imported pharmaceuticals suffered increased losses due to impairment provisions for trade and other receivables[19]. - The imported pharmaceutical sector did not generate any revenue in the year under review, resulting in a loss of revenue and gross profit contribution of approximately HK$13.4 million and HK$7.1 million, respectively, compared to the previous year[41]. - The segment loss for the imported pharmaceutical sector increased to about HK$14.9 million in 2020, up by approximately HK$8.3 million from a loss of HK$6.6 million in 2019[44]. Regulatory and Market Environment - The pharmaceutical industry in China is undergoing significant changes due to comprehensive healthcare reforms and stringent regulatory compliance[13]. - The Group expects to input additional efforts with business partners to improve the situation regarding regulatory issues of imported pharmaceuticals[19]. - The Group anticipates further challenges due to regulatory changes and intensified competition in the pharmaceutical market[30]. - The Chinese government is expected to continue investing in healthcare reforms, which may benefit the pharmaceutical market[66]. - The Group is actively working to resolve regulatory issues to reintroduce imported products, particularly skin treatment products, back into the China market[42]. Management and Strategic Focus - The Group has focused on aligning internal resources to strengthen its long-term development path amid intense competition in the Chinese market[19]. - The Group aims to continue improving its business performance while managing risks in an ever-changing market environment[19]. - The Group plans to enhance its production capability and operating performance to strengthen its core competitiveness amid ongoing challenges[24]. - The Group's future outlook includes a commitment to enhancing shareholder value through strategic initiatives and market expansion efforts[108]. - The management team emphasizes the importance of internal control and business administration to ensure operational efficiency and compliance[109]. Corporate Governance - The Group has adopted the Corporate Governance Code provisions, ensuring compliance with the Listing Rules on The Stock Exchange of Hong Kong Limited[122]. - The Company believes that the roles of chairman and chief executive officer can be held by the same person, as major decisions are made in consultation with the Board[122]. - The Company has not established a dividend policy, believing it is more appropriate to determine dividend payments based on financial performance, operating and capital requirements, and market conditions[128]. - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for securities dealings[128]. - The Company will continue to review and monitor its corporate governance practices and improve them as necessary[128]. Environmental, Social, and Governance (ESG) Initiatives - The Group has established an "Environmental Protection, Occupational Health and Safety Management Committee" to manage environmental protection and ensure a safe work environment[196]. - The Group's risk management and internal audit function will conduct regular reviews on the effectiveness of ESG risk management systems[196]. - The Group is committed to conducting regular reviews and evaluations of its ESG-related policies and risks[196]. - The Group's manufacturing activities in China involve production processes that have a material ESG impact[196]. - The Committee will report to the Board on material ESG issues on an annual basis[196].

Financial Performance - Total revenue for the six months ended September 30, 2019, was HK$40,695,000, a decrease of 9.5% compared to HK$45,047,000 for the same period in 2018[11] - Gross profit for the period was HK$23,414,000, with a gross margin of approximately 57.5%[11] - Profit for the period was HK$26,517,000, slightly down from HK$26,568,000 in the previous year, representing a decrease of 0.2%[11] - The company reported a total comprehensive income of HK$19,267,000 for the period, compared to a total comprehensive expense of HK$26,048,000 in the previous year[11] - Profit for the period attributable to owners of the Company was HK$25,043,000, a decrease of 5.1% compared to HK$26,404,000 in the previous year[14] - Total comprehensive income attributable to owners of the Company was HK$17,641,000, compared to a loss of HK$26,431,000 in the same period last year[14] - Basic earnings per share for the period was HK$1.05, down from HK$1.10 in the previous year, representing a decrease of 4.5%[14] - Diluted earnings per share for the period was HK$0.90, compared to HK$0.92 in the previous year, reflecting a decrease of 2.2%[14] - The Group's profit before taxation for the period was HK$28,257,000, compared to HK$26,821,000 in the previous year, reflecting a growth of approximately 5.4%[82] - The total profit for the period was HK$26,517,000, slightly down from HK$26,568,000 in the same period of 2018[82] Assets and Liabilities - Total assets as of September 30, 2019, amounted to HK$1,206,941,000, an increase from HK$1,196,086,000 as of March 31, 2019[8] - Total equity attributable to owners of the Company was HK$1,084,293,000, up from HK$1,066,652,000 at the end of the previous fiscal year[8] - Non-current liabilities increased to HK$58,832,000 from HK$54,777,000, indicating a rise of 7.4%[8] - The net current assets as of September 30, 2019, were HK$120,631,000, down from HK$128,904,000, indicating a decrease of 6.4%[8] - The Group's interest in an associate, Smart Ascent Limited, has been subject to a qualified opinion due to audit scope limitations affecting opening balances and comparative figures[51] Cash Flow - Net cash used in operating activities was HK$7,799,000, compared to HK$10,343,000 in the previous year, indicating improved cash flow management[21] - Cash and cash equivalents at the end of the period were HK$131,434,000, down from HK$170,838,000 in the previous year, a decrease of 23%[21] - The company reported a net decrease in cash and cash equivalents of HK$16,252,000, compared to an increase of HK$10,577,000 in the previous year[21] - The company experienced a foreign exchange rate effect of HK$1,216,000 on cash and cash equivalents during the period[21] Expenses - Selling and distribution expenses decreased significantly to HK$10,972,000 from HK$18,221,000, a reduction of 39.5%[11] - The effective interest expense on convertible bonds was HK$4,457,000, compared to HK$3,756,000 in the previous year, reflecting an increase of 18.6%[11] - The Group's corporate expenses included an effective interest expense of HK$4,384,000, which was consistent with the previous year's expense of HK$4,290,000[82] - Selling and marketing expenses were reduced by about HK$7.2 million, which helped mitigate the negative impact of decreased gross profit[171] - Administrative expenses slightly decreased by about HK$0.3 million or 2.1% from HK$13.6 million in the 2018 Interim Period to about HK$13.3 million in the 2019 Interim Period[194] - The decrease in administrative expenses was mainly due to a reduction in professional and consultancy fees incurred during the review period[195] Market and Industry Context - The Chinese economy recorded its weakest growth in almost three decades at 6% in the third quarter of 2019, down from 6.2% in the second quarter[164] - The pharmaceutical industry is experiencing transformation towards high-quality and innovation-driven development due to ongoing healthcare reforms[164] - The Chinese government's increased investment under healthcare reforms has supported the growth of the pharmaceutical industry[164] - Various policies have been introduced to rationalize drug prices and promote market access for quality drugs[164] Investments and Financial Instruments - The Group's investments in convertible bonds issued by Innovative Pharm amount to HK$715 million, bearing interest at 3.5% per annum[61] - The annual interest payment of HK$25,025,000 for the bonds has been extended to July 28, 2021, with an additional interest of HK$11,261,250 payable on the same date[61] - The fair value of investments in convertible bonds increased from HK$469,737,000 at 1 April 2019 to HK$500,173,000 at 30 September 2019, reflecting a fair value change of HK$30,436,000 recognized in profit or loss[153] - The Group's financial assets at fair value through other comprehensive income (FVTOCI) included unlisted investment funds and equity investments[149] - The Group's financial assets measured at fair value on a recurring basis did not experience any transfer between different levels of the fair value hierarchy during the reporting period[145] - The directors believe that the carrying amounts of financial assets and liabilities recorded at amortized cost approximate their fair values[154] Segment Performance - The manufacturing segment generated revenue of HK$40,695,000, while the trading segment reported revenue of HK$7,806,000 for the same period[82] - The segment results for manufacturing showed a profit of HK$7,003,000, compared to HK$417,000 in the previous year, indicating a significant improvement[82] - The imported pharmaceutical sector faced significant challenges, resulting in a loss of revenue and gross profit contribution of about HK$7.8 million and HK$4.0 million respectively due to a suspension of sales since January 2019[185] - The segment loss for imported pharmaceuticals increased to about HK$6.3 million, up about HK$3.0 million from a loss of about HK$3.3 million in the 2018 Interim Period[185] - The gene development sector remained inactive with no revenue recorded during the review period[189] Compliance and Accounting Standards - The interim financial information was approved for issue by the Board on 29 November 2019, ensuring compliance with applicable disclosure requirements[25] - The Group adopted HKFRS 16 Leases, resulting in the recognition of right-of-use assets and lease liabilities for leases with terms exceeding 12 months[34] - The transition to HKFRS 16 did not result in significant changes to the Group's financial position or accounting policies, except for the impact of the new lease standard[34] - The Group's accounting policies remain consistent with the 2019 Audited Financial Statements, aside from the changes due to HKFRS 16[34] - The adoption of HKFRS 16 is expected to enhance transparency in the Group's financial reporting by recognizing lease obligations on the balance sheet[34]

Economic Outlook - The global economic outlook for 2019 was clouded by uncertainties from the ongoing trade dispute between China and the United States, Brexit negotiations, and future monetary policy directions [12]. - China's economy grew by 6.6% in 2018, down from 6.8% in 2017, marking the slowest growth in 28 years [13]. - The Chinese government is expected to continue investing in healthcare reforms, maintaining a growth forecast of 6.2% for 2019 [88]. - The World Bank maintains its forecast for China's economic growth at 6.2% for 2019, despite global growth slowing and escalating US-China trade tensions [90]. Chinese Pharmaceutical Industry - The pharmaceutical industry in China has maintained steady growth amidst a changing regulatory environment due to ongoing structural reforms initiated by the State Council [14]. - The Chinese pharmaceutical industry is undergoing significant changes due to the institutional reshuffle and regulatory reforms, which have improved market accessibility for self-developed innovative drugs [21]. - The implementation of the two-invoice system and centralized procurement in 11 selected cities has influenced market sentiment and added pressure on drug prices and costs, while accelerating industry consolidation [22]. - The competitive landscape in the pharmaceutical market is intensifying, with large pharmaceutical players emerging as formidable competitors [33]. - The pharmaceutical industry is facing intensified market competition due to new regulations and policies, posing significant challenges to the Group [88]. Company Financial Performance - The Group's profit for the year attributable to owners amounted to approximately HK$64.0 million, an increase of about HK$34.1 million compared to the previous year's profit of approximately HK$29.9 million, primarily due to non-cash items [21]. - The Group's revenue increased to HK$89.2 million in 2019, up approximately 4.0% from HK$85.8 million in 2018, while gross profit rose to HK$49.6 million, representing an 18.0% increase from HK$42.0 million in the previous year [40][42]. - Operating profit before income tax was about HK$63.4 million, an increase of approximately HK$34.2 million compared to HK$29.2 million in 2018, primarily due to a net gain of about HK$13.3 million from fair value changes in convertible bond investments [41][43]. - Profit attributable to owners of the Company was approximately HK$64.0 million, reflecting an increase of about HK$34.1 million from HK$29.9 million in the previous financial year [41][43]. - The manufactured pharmaceutical sector's revenue grew to about HK$75.8 million, a 26.0% increase from HK$60.2 million in 2018, driven by strategic initiatives to enhance market coverage [48][49]. - Other income and gains increased by approximately HK$36.1 million or 68.1%, totaling about HK$89.1 million, primarily due to a net gain from fair value changes in convertible bonds [83]. Regulatory Changes and Government Initiatives - The National Medical Products Administration (NMPA) was established, merging the previous drug regulator to enhance market controls and promote accessibility to quality drugs [14]. - The restructuring aims to align national policy goals and improve the efficiency of market controls in pursuit of a 'Healthy China' by 2030 [14]. - The NMPA has improved the efficiency of drug registration approvals, particularly for innovative drugs addressing unmet medical needs [20]. - The ongoing healthcare reforms and the Healthy China 2030 Plan reflect the government's commitment to improving drug accessibility and affordability [33]. Company Strategy and Operations - The Group aims to enhance manufacturing capabilities at its Changchun plant to develop quality products and improve cost efficiency [29]. - The Group is focused on strengthening its financial fundamentals to support sustainable development amidst the evolving market conditions [29]. - The Group aims to enhance its core competitiveness by advancing production technology and improving product quality to gain greater market share [89]. - The Group aims to diversify its revenue streams by adopting a flexible strategy to navigate market challenges and seize business opportunities [95]. - The Group's cash flow management strategy emphasizes maintaining a healthy level of cash flows to meet financial commitments [96]. Challenges and Risks - The Group believes that the loss-making situation of its imported pharmaceuticals trading segment will not materially impact its overall financial position [89]. - Management anticipates that the loss-making position of the Imported Pharmaceutical Sector will likely extend into the coming year due to ongoing issues with regulatory compliance [62]. - The Group's import pharmaceutical trade category is expected to not significantly adversely affect its financial condition in the short term [90]. - The Group recognized a fair value loss of approximately HK$59,047,000 in its financial assets due to volatile equity market fluctuations amid US-China trade conflicts [112]. Management and Governance - The Company has complied with the Corporate Governance Code provisions, except for certain deviations noted in the report [175]. - The roles of Chairman and Chief Executive Officer are held by Dr. Xie Yi, with the belief that there is an adequate balance of power despite this dual role [176]. - The Board comprises six executive directors and three INEDs, with Dr. Xie Yi serving as Chairman and Chief Executive Officer [198]. - All INEDs comply with the independence provisions set out in the Listing Rules, with Ms. Jin Song possessing the required accounting or financial management experience [200].