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].