Financial Performance - Revenue decreased by 12.4% to RMB 8,013.3 million, compared to RMB 9,150.3 million in the previous year; if calculated based on pharmaceutical sales, revenue decreased by 9.8% to RMB 9,472.2 million[6]. - Gross profit decreased by 13.2% to RMB 6,109.2 million, compared to RMB 7,035.8 million in the previous year; if calculated based on pharmaceutical sales, gross profit decreased by 12.4% to RMB 6,053.7 million[6]. - Annual profit decreased by 27.2% to RMB 2,384.4 million, compared to RMB 3,276.2 million in the previous year; normalized annual profit decreased by 18.8% to RMB 2,709.3 million[6]. - Basic earnings per share decreased by 26.3% to RMB 0.9792, compared to RMB 1.3281 in the previous year[6]. - The proposed final dividend per share is RMB 0.0783, resulting in a total dividend of RMB 0.3917 per share for the year, a decrease of 26.7% from the previous year[6]. - The group's sales revenue for the year was RMB 8,013.3 million, a decrease of 12.4% compared to RMB 9,150.3 million in 2022[34]. - The annual profit was RMB 2,384.4 million, down 27.2% from RMB 3,276.2 million in 2022[34]. - The normalized annual profit decreased by 18.8% to RMB 2,709.3 million from RMB 3,338.3 million in 2022[34]. Product Development and Innovation - The company launched three innovative drugs in China, all of which were included in the national medical insurance catalog[7][8]. - The company obtained exclusive promotion rights for a new drug Y-3 injection for ischemic stroke in August 2023, with clinical trials progressing steadily[10]. - The innovative drug Tretinoin injection has entered large-scale clinical application[14]. - Three innovative drugs, including Diazepam nasal spray, Tretinoin injection, and Methotrexate injection, were successfully approved for listing in China, significantly enhancing accessibility and affordability[19]. - The company has approximately 30 differentiated innovative pipeline products, actively promoting clinical development and commercialization[17]. - The exclusive licensing rights for the new generation iron-based non-calcium phosphate binder, Sucrose Hydroxyl Iron Chewable Tablets, were successfully obtained, marking the fourth innovative drug entering the commercialization phase[19]. - The company has established a collaborative framework with Junshi Bioscience to commercialize Tretinoin in Southeast Asia, enhancing the availability of high-quality innovative drugs for local cancer patients[14]. - The innovative medical device EyeOP1 for glaucoma treatment has completed market access work in multiple provinces and cities[14]. - The company is focusing on specialized deep development in cardiovascular, digestive, dermatology, and ophthalmology sectors to accelerate expansion and ensure sustainable growth[22]. - The company is advancing clinical development for methotrexate injection for rheumatoid arthritis, with NDA acceptance in December 2023, aiming to become the first subcutaneous treatment for RA in China[46]. - The diazepam nasal spray has been recognized in expert consensus guidelines for the treatment of Dravet syndrome, indicating its clinical significance[39]. - The Yiluqu injection has been recommended in multiple authoritative psoriasis treatment guidelines globally, enhancing its market credibility[43]. - The methotrexate injection demonstrated better gastrointestinal safety compared to oral methotrexate, improving patient compliance[48]. - The company is progressing with over ten clinical trials focused on registration-based randomized controlled trials (RCTs), creating a robust pipeline[36]. - The innovative product pipeline is expected to drive future growth and market expansion, leveraging existing product synergies[36]. Market and Business Strategy - The company is committed to developing affordable differentiated pharmaceutical products to improve accessibility for patients in China and other developing countries[27]. - The Southeast Asia business, "Kanglian Health," has rapidly introduced a diverse product portfolio, covering various countries in the region[25]. - The group is expanding its international business into the Middle East and North Africa, establishing a commercialization network in emerging markets[25]. - The company is exploring market expansion opportunities both domestically and internationally[64]. - The company is engaged in strategic collaborations to enhance its research and development capabilities[64]. - The company aims to become "China's leading ophthalmic medical device company" through continuous optimization of its ophthalmic business[24]. - The company is enhancing its international supply chain and production capacity to ensure supply chain security and stability[25]. - The company has implemented organizational restructuring to enhance execution capabilities throughout the product lifecycle, ensuring a more agile modern organization[20]. Financial Management and Operations - Cash generated from operating activities was RMB 2,502.9 million, a decrease of 29.6% from RMB 3,553.2 million in the previous year[129]. - Cash used in investing activities decreased by 62.5% to RMB 442.3 million, compared to RMB 1,178.2 million in the previous year[130]. - Total bank borrowings decreased to RMB 1,269.7 million from RMB 1,783.3 million, with the debt-to-asset ratio declining to 7.2% from 10.0%[135]. - The company plans to utilize long-term bank loans and other financing tools to meet liquidity needs based on its development strategy and cash flow from operations[132]. - The group closely monitors interest rates and foreign exchange market fluctuations to mitigate risks[137]. - The group has signed several foreign exchange forward contracts to hedge foreign exchange risks as of December 31, 2023[136]. - The company has received clinical trial approval for the innovative drug TYK2 inhibitor (CMS-D001) from China's NMPA in January 2024[65]. - The company has also obtained clinical trial approval for the GnRH receptor antagonist (CMS-D002) from China's NMPA in February 2024[65]. Corporate Governance and Management - The company has implemented a share incentive plan on January 17, 2024, to motivate and retain key employees[188]. - The management team includes experienced professionals with over 10 years in marketing, operations, and finance, enhancing the company's strategic capabilities[165][166][180]. - The board of directors will present resolutions for the re-election of three directors at the upcoming annual general meeting[181]. - The company has confirmed the independence of all non-executive directors in accordance with listing rules[182]. - The company has approved the addition of five employees to its core employee benefits plan during the reporting period[186]. - The company has implemented a share incentive plan aimed at encouraging core management and key personnel to contribute to the launch and sales of new products[189]. - The total number of shares that can be purchased under the share incentive plan is capped at 100,000,000 shares, representing approximately 4% of the company's issued share capital as of the report date[192]. - The maximum number of shares that can be granted to any selected employee within any 12-month period shall not exceed 1% of the company's issued share capital at any time[193]. - The share incentive plan is set to be effective from January 17, 2024, and will last for ten years, with a remaining duration of 9 years and 9 months as of the report date[197]. - The board of directors sets performance targets based on the number of new products launched and their sales revenue[196]. Research and Development - Research and development expenses increased by 11.7% to RMB 815.9 million, representing 10.2% of revenue, up from 8.0% in the previous year, with R&D expenses alone rising by 55.6% to RMB 195.1 million[113]. - The company is focused on accelerating the clinical development and registration process of innovative products to continuously meet clinical demands[104]. - The company emphasizes its commitment to innovation and research in the pharmaceutical sector[65]. - The company is actively pursuing clinical trials for new treatments for conditions like acute ischemic stroke and non-alcoholic fatty liver disease[65]. - The company has a pipeline of products in various stages of clinical trials, including those for glaucoma and skin diseases[65].

Financial Performance - Revenue decreased by 12.4% to RMB 8,013.3 million compared to RMB 9,150.3 million in 2022; pharmaceutical sales revenue decreased by 9.8% to RMB 9,472.2 million from RMB 10,497.5 million in 2022[5] - Gross profit declined by 13.2% to RMB 6,109.2 million from RMB 7,035.8 million in 2022; gross profit from pharmaceutical sales decreased by 12.4% to RMB 6,053.7 million from RMB 6,910.5 million in 2022[5] - Annual profit fell by 27.2% to RMB 2,384.4 million from RMB 3,276.2 million in 2022; normalized annual profit decreased by 18.8% to RMB 2,709.3 million from RMB 3,338.3 million in 2022[5] - Basic earnings per share decreased by 26.3% to RMB 0.9792 from RMB 1.3281 in 2022[5] - The company reported a net profit of RMB 2,384,430 thousand for 2023, a decline of 27.3% from RMB 3,276,195 thousand in the previous year[13] - The company's basic earnings per share for 2023 was RMB 0.9792, a decrease of 26.3% from RMB 1.3281 in 2022[13] - The company's annual profit was RMB 2,384.4 million, down 27.2% from RMB 3,276.2 million in the previous year[62] - The company's normalized annual profit decreased by 18.8% to RMB 2,709.3 million from RMB 3,338.3 million in 2022[62] Dividends - Proposed final dividend per share is RMB 0.0783, resulting in a total dividend of RMB 0.3917 per share for the year, a decrease of 26.7% from RMB 0.5344 in 2022[5] - The company declared an interim dividend of RMB 0.3134 per share for 2023, up from RMB 0.2930 per share in 2022, totaling RMB 768,453 thousand[42] - The proposed final dividend for 2023 is RMB 0.0783 per share, down from RMB 0.2414 per share in 2022, amounting to RMB 191,991 thousand[42] Cash and Assets - As of December 31, 2023, cash and cash equivalents amounted to RMB 4,311.1 million, with bank acceptance bills of RMB 181.0 million[5] - The company’s cash and cash equivalents stood at RMB 4,311,058 thousand as of December 31, 2023, slightly down from RMB 4,376,376 thousand in 2022[14] - Total assets as of December 31, 2023, were RMB 15,682,051 thousand, compared to RMB 14,876,436 thousand in 2022, reflecting a growth of 5.4%[14] - Current assets net value increased to RMB 6,745,649 thousand in 2023, up from RMB 5,952,273 thousand in 2022, representing a rise of 13.3%[14] - The company’s equity attributable to owners increased to RMB 15,520,208 thousand in 2023, compared to RMB 14,589,067 thousand in 2022, marking a growth of 6.4%[16] Research and Development - Research and development expenses increased to RMB 195,134 thousand in 2023, up 55.5% from RMB 125,431 thousand in 2022[13] - The company is expanding its innovative pipeline, with several new drugs progressing through clinical trials and regulatory approvals, including a new oral formulation for treating rheumatoid arthritis[10][12] - The company is advancing clinical development for multiple innovative products, with several projects in the pipeline for clinical trials[65] - The company has ongoing research and development for multiple innovative drugs, with a total of approximately 10 new drugs in the pipeline[87] Innovative Products - Three innovative drugs were successfully approved for market launch in China and included in the national medical insurance catalog, enhancing the foundation for rapid commercialization[6][7] - The first diazepam nasal spray (Vituco) was approved in June 2023 and included in China's national medical insurance directory in December 2023, marking a significant advancement in acute treatment for epilepsy patients[66] - The diazepam nasal spray is the first drug approved by China's NMPA for treating cluster seizures in patients aged 6 and above, offering a rapid and convenient administration method[66] - The NDA for Methotrexate injection for treating active rheumatoid arthritis was accepted in December 2023, with promising clinical trial results indicating non-inferiority to oral methotrexate[73] - The innovative biological agent for moderate to severe plaque psoriasis, targeting IL-23 p19 subunit, has been approved for marketing in China and included in the national medical insurance catalog[99] Market Expansion - The company is enhancing its international presence through the acquisition of a production facility in Singapore and expanding its CDMO business in Southeast Asia to improve drug accessibility[12] - The company has expanded its business into Southeast Asia, aiming to internationalize high-quality pharmaceutical products[60] - The strategic focus on Southeast Asia is driven by increasing pharmaceutical demand due to aging populations and the rising burden of non-communicable diseases in the region[111] Financial Management - Financial expenses decreased slightly to RMB 46.3 million in 2023 from RMB 49.1 million in 2022[36] - The income tax expense for 2023 was RMB 481.3 million, compared to RMB 476.1 million in 2022, reflecting stable tax obligations[36] - The effective corporate income tax rate for the company's Chinese subsidiaries is 25%, with a reduced rate of 15% for Tianjin Kangzhe[37] - The company experienced a foreign exchange gain of RMB 31.5 million in 2023, a significant improvement from a loss of RMB 126.2 million in 2022[35] Compliance and Governance - The company has complied with applicable corporate governance codes during the reporting period, ensuring adherence to regulatory standards[161] - The audit committee held three meetings during the year ended December 31, 2023, with attendance rates of 100% for the chairman and one member, and 66.67% for another member[163] - The board proposed amendments to the existing articles of association to comply with new electronic communication requirements effective from December 31, 2023[169] Operational Efficiency - Selling expenses decreased by 7.7% to RMB 2,511.3 million, accounting for 31.3% of revenue, an increase of 1.6 percentage points year-on-year[127] - Administrative expenses increased by 3.1% to RMB 656.6 million, representing 8.2% of revenue, up 1.2 percentage points from the previous year[128] - R&D expenditures rose by 11.7% to RMB 815.9 million, accounting for 10.2% of revenue, an increase of 2.2 percentage points year-on-year[129] Customer and Market Dynamics - In the fiscal year ending December 31, 2023, the largest customer accounted for 20.2% of the company's revenue, up from 14.4% in 2022[34] - The company has not reported any individual customer contributing more than 10% of revenue aside from the largest customer[34] - The group has a strong market presence in the inflammatory bowel disease treatment segment, with the drug "莎爾福" (Mesalazine) holding the top market share in China[92]

Financial Performance - Revenue increased by 3.6% to RMB 4,610.1 million compared to RMB 4,447.8 million in the same period last year; if calculated based on pharmaceutical sales, revenue grew by 7.1% to RMB 5,536.6 million from RMB 5,170.0 million[9]. - Gross profit rose by 4.9% to RMB 3,605.9 million, up from RMB 3,436.2 million in the previous year; if based on pharmaceutical sales, gross profit increased by 5.7% to RMB 3,567.3 million from RMB 3,375.0 million[9]. - Net profit for the period grew by 6.7% to RMB 1,916.0 million, compared to RMB 1,796.3 million in the same period last year[9]. - Basic earnings per share increased by 7.0% to RMB 0.7835 from RMB 0.7325 in the previous year[9]. - The operating profit for the same period was RMB 1,916.0 million, reflecting a year-on-year growth of 6.7% from RMB 1,796.3 million in the previous year[17]. - The group's profit for the period grew by 6.7% to RMB 1,916.0 million, compared to RMB 1,796.3 million in the same period last year[82]. - The company reported a net profit of RMB 3,258,992 for the period, contributing significantly to the overall equity growth[123]. Dividends and Shareholder Returns - Declared interim dividend of RMB 0.3134 per share, a 7.0% increase from RMB 0.2930 in the same period last year[9]. - The board declared an interim dividend of RMB 0.3134 per share for the six months ending June 30, 2023, expected to be paid on September 20, 2023[100]. - The proposed dividend for the period is RMB 591,910, indicating a commitment to returning value to shareholders[123]. - The company paid dividends amounting to RMB 591,910 thousand during the reporting period, compared to RMB 557,594 thousand in the previous year[126]. Research and Development - Three innovative drugs were approved for marketing in China during the reporting period, marking a significant milestone in the company's R&D efforts[11]. - The company is advancing multiple innovative products, including a nasal spray for acute repetitive seizures and a monoclonal antibody for moderate to severe psoriasis, which were recently approved in China[14]. - Continuous improvement of the product development system is being implemented to support the commercialization of innovative products[19]. - Research and development expenses surged by 89.6% to RMB 238.9 million, representing 5.2% of revenue, an increase of 2.4 percentage points from 2.8%[73]. - The company is focusing on enhancing its research and development capabilities to innovate and improve its product offerings[123]. Market Expansion and Strategic Partnerships - Collaboration with Junshi Biosciences to commercialize Tislelizumab in Southeast Asia, enhancing access to innovative treatments for local cancer patients[13]. - The company is expanding its Southeast Asia business, enhancing market access for high-quality pharmaceutical products from both overseas and China[16]. - The company aims to expand its presence in the Southeast Asian market, leveraging high-quality pharmaceutical products from Europe, the U.S., Japan, and China[66]. - The company established a partnership with Junshi Biosciences to co-develop and commercialize the intravenous injection of Tretinoin Monoclonal Antibody in nine Southeast Asian countries[58]. Product Development and Innovation - The company is actively developing innovative products, with several in the pipeline, including Y-3 injection, which received exclusive promotion rights in mainland China, Hong Kong, and Macau[35]. - The approval of the IL-23 targeted monoclonal antibody, Tzab, provides a safer and more effective treatment option for moderate to severe plaque psoriasis patients, with a PASI 75 response rate of 91.3% at week 52[24]. - The methotrexate injection, the first subcutaneous formulation in China, offers improved patient compliance and reduced gastrointestinal side effects compared to oral administration[25]. - The company is developing new products targeting various conditions, including SDN-037 for post-cataract surgery pain and inflammation, and PDP-716 for glaucoma[35]. Financial Position and Assets - As of June 30, 2023, the group's bank balances and cash amounted to RMB 4,451.4 million, with bank acceptances of RMB 254.9 million[9]. - The total assets as of June 30, 2023, were RMB 16,165,907,000, compared to RMB 14,876,436,000 at the end of 2022, showing a growth in asset base[119]. - The company's total assets reached RMB 16,165,907, up from RMB 14,876,436, marking an increase of approximately 8.7%[121]. - The company holds investments in associates valued at RMB 5,501,542,000 as of June 30, 2023, up from RMB 3,326,859,000 at the end of 2022[143]. Operational Efficiency and Compliance - The company emphasizes compliance and has implemented a detailed compliance control system, including real-time monitoring and effective early warning mechanisms[38]. - The company has adhered to the corporate governance code and has established an audit committee to oversee financial reporting and risk management[113]. - The company plans to continue monitoring its management structure and may make adjustments as necessary to enhance operational efficiency[113]. Inventory and Receivables Management - Inventory increased by 29.2% to RMB 616.4 million, with an average inventory turnover period of 100 days, up 4 days from the previous year[83]. - Trade receivables decreased by 6.2% to RMB 1,353.2 million, with an average turnover period of 72 days, down 2 days from the previous year[84]. - Trade payables increased by 37.7% to RMB 245.1 million, with an average turnover period of 39 days, up 14 days from the previous year[86]. Human Resources and Team Development - As of June 30, 2023, the group has a total of 5,622 employees, with a focus on optimizing organizational structure and performance management[108]. - The company has implemented a human resources platform construction and regular training empowerment plan to enhance team professional skills and organizational execution[44]. Market Segmentation and Revenue Breakdown - The cardiovascular segment achieved revenue of RMB 2,131.4 million, a decrease of 0.5% year-on-year; if calculated based on pharmaceutical sales revenue, it reached RMB 3,096.2 million, an increase of 5.9%, accounting for 55.9% of the total pharmaceutical sales revenue[45]. - The digestive segment generated revenue of RMB 1,779.9 million, an increase of 4.2% year-on-year, representing 32.1% of the total pharmaceutical sales revenue[45]. - The dermatology and aesthetic segment reported revenue of RMB 245.7 million, a growth of 27.4% year-on-year, contributing 4.4% to the total pharmaceutical sales revenue[45]. - The ophthalmology segment achieved revenue of RMB 245.6 million, an increase of 29.6% year-on-year, also accounting for 4.4% of the total pharmaceutical sales revenue[45].

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的內容概不負責，對其準確性或完整性亦 不發表任何聲明，並表明概不就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的任何損失 承擔任何責任。 CHINA MEDICAL SYSTEM HOLDINGS LIMITED 康 哲 藥 業 控 股 有 限 公 司 * （於開曼群島註冊成立的有限公司） （股份代號：867） 截至二零二三年六月三十日止六個月之中期業績公告 China Medical System Holdings Limited（「本公司」）之董事（「董事」）會（「董事會」）欣然公佈本公 司及其附屬公司（「本集團」或「康哲藥業」）截至二零二三年六月三十日止六個月（「報告期」） 之未經審計簡明合併業績。 財務摘要 ⚫ 營業額增長 3.6%至人民幣 4,610.1 百萬元（二零二二年中期：人民幣 4,447.8 百萬元）；若全 按藥品銷售收入計算則營業額增長 7.1%至人民幣 5,536.6 百萬元（二零二二年中期：人民幣 5,170.0百萬元） ⚫ 毛利增長 4.9%至人民幣 3,605.9 百萬元（二零二二年中期：人民幣 3,436.2 百 ...

Financial Performance - Revenue increased by 9.8% to RMB 9,150.3 million, with pharmaceutical sales revenue growth of 13.7% to RMB 10,497.5 million[6] - Gross profit grew by 12.6% to RMB 7,035.8 million, with pharmaceutical sales gross profit growth of 14.4% to RMB 6,910.5 million[6] - Annual profit increased by 8.3% to RMB 3,276.2 million, with basic earnings per share rising by 8.6% to RMB 1.3281[6] - Total assets increased to RMB 17,753.5 million in 2022, while total liabilities rose to RMB 3,016.5 million[7] - The group’s revenue increased by 9.8% to RMB 9,150.3 million, compared to RMB 8,337.2 million in the previous year[68] - Gross profit grew by 12.6% to RMB 7,035.8 million, with a gross margin of 76.9%, up from 74.9% in the previous year[69] - Annual profit grew by 8.3% to RMB 3,276.2 million, driven by continuous revenue growth[80] - The company reported a pre-tax profit of RMB 3,762,850 thousand, up from RMB 3,456,589 thousand in the previous year, indicating an increase of 8.8%[200] - Net profit attributable to the owners of the company for 2022 was RMB 3,258,992 thousand, compared to RMB 3,017,402 thousand in 2021, marking a growth of 8.0%[200] - Basic earnings per share for 2022 was RMB 1.3281, an increase from RMB 1.2228 in 2021, representing a rise of 8.6%[200] Product Development and Innovation - The company plans to launch three innovative products that are currently in the clinical development and registration phase[8] - The company has secured exclusive rights for the commercialization of a topical JAK inhibitor and a glaucoma treatment device in China and Southeast Asia[9] - The company is advancing the clinical and registration processes for several innovative drugs, including a nasal spray and an injection for psoriasis[9] - The company has successfully developed a pipeline of 30 innovative products, with 3 products expected to be approved for market launch in China soon[22] - The company emphasizes innovation as a core strategy, transitioning from mature products to innovative patented products since 2018, establishing itself as an open platform for pharmaceutical innovation and commercialization[14] - The company aims to accelerate clinical development and commercialization of innovative products, with expectations of annual approvals for new products[16] - The company is actively developing new products such as CF101 for psoriasis and CMS-D001 for autoimmune diseases, which are in the preclinical or clinical trial phases[42] - The diazepam nasal spray NDA is under review in China, demonstrating a bioavailability of 77.55% to 86.21% in different dosage groups, indicating rapid absorption and good safety tolerance[33] - The innovative oral HIF-PHI drug, intended for treating anemia in chronic kidney disease (CKD), has completed its first subject dosing in a Phase III clinical trial with 150 subjects planned for enrollment[39] Market Expansion and Strategic Partnerships - The company is expanding its operations into Southeast Asia, aiming to broaden its business scope and depth[23] - The company has entered into an exclusive licensing agreement for a series of affordable insulin products in Southeast Asia, marking a significant entry into this market[12] - The company views Southeast Asia as a key growth market, leveraging its global investment and commercialization experience to meet the demand for high-quality pharmaceutical products[18] - The company has secured exclusive rights to register, market, and distribute insulin products in eleven Southeast Asian countries, marking a significant entry into this market[62] - The company has established a strategic partnership with Incyte for the development and commercialization of ruxolitinib cream, enhancing its dermatology product portfolio[26] - The company acquired a 60% stake in the dermatological skincare R&D platform Hezero Pharmaceuticals, enhancing its product lineup for sensitive skin[11] Financial Management and Governance - The company has a robust financial management structure, with experienced professionals overseeing financial and tax compliance[108] - The company has a strong management team with extensive experience in the pharmaceutical industry, including Mr. Lin Gang, who has been the executive director since December 18, 2006[96] - The board consists of six directors, including three executive directors and three independent non-executive directors[156] - The company emphasizes compliance and governance, with a dedicated legal and compliance team led by the company secretary[109] - The company has committed to high standards of corporate governance to enhance accountability and transparency, thereby increasing long-term shareholder value[151] - The company has established a whistleblowing system to ensure proper handling of reports related to fraud management[182] Research and Development - The company has implemented a systematic management mechanism for the entire process of innovative product development, ensuring efficient clinical research and commercialization[25] - The company is continuously working on enhancing its research and development capabilities to support the launch of new therapies and maintain a competitive edge in the market[43] - Research and development expenses for the year were RMB 125,431 thousand, compared to RMB 114,761 thousand in 2021, reflecting an increase of 9.2%[200] Regulatory and Compliance - The company has established a robust quality management system to comply with GMP and GSP standards, ensuring ongoing regulatory compliance[133] - The company has not obtained product liability insurance in China, which poses a risk of significant costs and damage to customer relationships in the event of product-related claims[134] - The Chinese healthcare system is undergoing significant reforms, with frequent changes in laws and regulations that could adversely affect the company's operations if strategies are not timely adjusted[135] - The company must participate in government-led bidding processes, and failure to win bids could impact product sales capabilities in specific provinces[136] Community Engagement and ESG Initiatives - The company made donations totaling approximately RMB 2.7 million for community welfare during the reporting period[142] - The company emphasizes environmental, social, and governance (ESG) initiatives as part of its long-term strategy[102] - The company has implemented environmental management measures in compliance with applicable laws, including the establishment of an environmental management committee[131] Operational Efficiency - The company has a robust commercialization system, focusing on specialized disease areas, which has been developed over 30 years, ensuring sustainable business growth and maximizing economic benefits[43] - The company has over 4,300 professional marketing and promotion personnel, covering more than 50,000 hospitals and medical institutions, and over 200,000 retail pharmacies in China[45] - The company is focused on academic promotion and market strategy formulation for innovative products post-launch, aiming to establish a strong academic influence quickly[44]

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的內容概不負責，對其準確性或完整性亦不 發表任何聲明，並表明概不就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的任何損失承擔 任何責任。 CHINA MEDICAL SYSTEM HOLDINGS LIMITED 康哲藥業控股有限公司* （於開曼群島註冊成立的有限公司） （股份代號：867） 截至二零二二年十二月三十一日止之年度業績公告 及 建議修訂現有組織章程大綱及細則 以及採納新組織章程大綱及細則 China Medical System Holdings Limited（「本公司」）之董事會（「董事會」）欣然公佈本公司及其附 屬公司（「本集團」或「康哲藥業」）截至二零二二年十二月三十一日止年度(「報告期」)之經審核合 併業績。 財務摘要 ⚫ 營業額增長 9.8%至人民幣 9,150.3百萬元（二零二一年：人民幣 8,337.2百萬元）；若全按藥品銷 售收入計算則營業額增長13.7%至人民幣10,497.5百萬元（二零二一年：人民幣9,230.2百萬元） ⚫ 毛利增長 12.6%至人民幣 7,035.8 百萬元（二零二一年：人民幣 6,24 ...

Financial Performance - Revenue increased by 15.7% to RMB 4,447.8 million, with pharmaceutical sales revenue growth of 21.1% to RMB 5,170.0 million[6]. - Gross profit rose by 19.6% to RMB 3,436.2 million, with pharmaceutical sales gross profit growth of 22.1% to RMB 3,375.0 million[6]. - Net profit grew by 10.1% to RMB 1,796.3 million, with basic earnings per share increasing by 11.2% to RMB 0.7325[6]. - The company declared an interim dividend of RMB 0.2930 per share, a 10.9% increase from the previous year[6]. - The company reported a sales revenue of RMB 4,447.8 million for the first half of 2022, representing a year-on-year growth of 15.7% compared to RMB 3,843.0 million in the same period of 2021[16]. - The net profit for the period was RMB 1,796.3 million, reflecting a year-on-year increase of 10.1% from RMB 1,631.6 million in the first half of 2021[16]. - The group's gross profit increased by 19.6% to RMB 3,436.2 million, compared to RMB 2,873.8 million in the same period last year, with a gross profit margin of 77.3%, up 2.5 percentage points from 74.8%[51]. - The total comprehensive income for the period amounted to RMB 1,668,243,000, compared to RMB 1,646,494,000 in the previous year, showing a slight increase[84]. Product Development and Innovation - The company is advancing its innovative product development with nearly 30 differentiated products in the pipeline[12]. - The company has established nearly 30 innovative products, with 9 products already approved in the US/Europe, and 3 products currently under NDA review in China[19]. - The company is developing a diazepam nasal spray for treating acute repetitive seizures, which is currently under NDA review in China, with promising pharmacokinetic study results[20]. - The diazepam nasal spray demonstrated a bioavailability of 77.55% and 80.13% for the 15mg dose group, indicating rapid absorption and good safety tolerance in healthy Chinese subjects[20]. - The company is developing a pre-filled methotrexate injection for the treatment of severe, refractory, disabling psoriasis, which has received priority review status from the CDE in January 2022, potentially accelerating its market entry in China[23]. - The pre-filled methotrexate injection is also expected to be the first subcutaneous treatment for rheumatoid arthritis (RA) in China, with a Phase III bridging trial completed in April 2022, involving 140 subjects across approximately 17 centers[24]. - The company is conducting a Phase III clinical trial for Daprodustat, an innovative oral HIF-PHI for treating anemia in chronic kidney disease (CKD), with 150 subjects planned for enrollment across about 28 centers[26]. - The innovative pipeline includes various products, such as the Daprodustat for CKD anemia and the methotrexate injection for RA, which are currently under clinical trials or awaiting approval in multiple regions[27]. Market Strategy and Expansion - The company is implementing an international strategy focusing on Southeast Asia to meet the demand for quality and affordable products[14]. - The company is collaborating with global biotech and pharmaceutical companies to develop products for the Southeast Asian market[14]. - The company aims to enhance its commercialization capabilities by leveraging its proven experience in market access, academic promotion, and brand building[30]. - The company is focusing on expanding its presence in Southeast Asia, leveraging local talent and establishing a core management team to penetrate the market effectively[41]. - The Southeast Asian market is seen as a significant opportunity due to its growing economy and favorable policies, with Singapore as the management hub[40]. - The company aims to develop and commercialize high-quality products tailored to local needs in Southeast Asia, creating a robust operational platform[41]. - The company is focusing on building an open platform for product development and commercialization in Southeast Asia, enhancing its competitive edge in the region[192]. Operational Efficiency and Management - The company is committed to responsible business operations and has implemented a refined management mechanism for employee behavior and performance evaluation[30]. - The company is enhancing its digital tools and new media promotion channels to improve product brand recognition and expand market penetration[31]. - The company is leveraging its academic promotion network and expert resources to enhance clinical trial efficiency and patient recruitment[25]. - The company has established a management system covering the entire product lifecycle to enhance development efficiency from clinical trials to commercialization[200]. - The company is committed to continuous improvement of its management system to enhance the efficiency of product development from clinical trials to commercialization[49]. Financial Position and Assets - Cash and cash equivalents amounted to RMB 4,019.1 million as of June 30, 2022, compared to RMB 3,385.7 million at the end of the previous year[65]. - The company's debt-to-asset ratio was approximately 10.4% as of June 30, 2022, compared to 10.6% at the end of the previous year[65]. - The company reported a total of RMB 1,770,835,000 in unsecured bank loans as of June 30, 2022, up from RMB 1,677,573,000 as of December 31, 2021[109]. - The company’s total assets as of June 30, 2022, amounted to RMB 12,296,730 thousand, compared to RMB 11,102,715 thousand as of January 1, 2021, reflecting a growth of 10.7%[89]. - The company’s cash flow hedge reserve was recorded at (1,719) as of the end of the reporting period[88]. Product Segmentation and Revenue Contribution - The cardiovascular segment achieved revenue of RMB 2,141.4 million, a year-on-year increase of 19.7%, contributing 56.6% to the total pharmaceutical sales revenue[190]. - The digestive segment reported revenue of RMB 1,707.7 million, up 17.4% year-on-year, accounting for 33.0% of total pharmaceutical sales revenue[190]. - The ophthalmology segment generated revenue of RMB 189.5 million, reflecting a 14.2% increase compared to the previous year, representing 3.7% of total pharmaceutical sales revenue[190]. - The dermatology segment's revenue reached RMB 146.5 million, a growth of 11.4% year-on-year, making up 2.8% of total pharmaceutical sales revenue[190]. Acquisitions and Partnerships - The company acquired global assets for a targeted VEGF+ANG2 bispecific antibody in July 2022[28]. - The company has entered into agreements to acquire rights related to the product Traumakine, with the final price to be negotiated based on net sales in the region[146][147]. - The company acquired a 60% stake in He Ling Pharmaceutical, expanding its portfolio in dermatological skincare products, which are formulated with safe, non-irritating ingredients[46]. - The company signed a licensing agreement for the EyeOP1® glaucoma treatment device, granting exclusive rights for commercialization in multiple regions including Southeast Asia[43]. Corporate Governance and Employee Management - The company has adhered to applicable corporate governance codes during the reporting period, with a clear separation of roles between the chairman and CEO[81]. - The total remuneration for key management personnel was RMB 6,761,000 for the reporting period, compared to RMB 6,093,000 for the same period in 2021[151]. - The company is committed to providing equal opportunities and continuous education and training for all employees to enhance their skills and collaboration[78].

Financial Performance - Revenue increased by 20.0% to RMB 8,337.2 million, with pharmaceutical sales revenue growth of 24.8% to RMB 9,230.2 million[9]. - Gross profit grew by 21.7% to RMB 6,246.9 million, with pharmaceutical sales gross profit growth of 24.7% to RMB 6,039.2 million[9]. - Annual profit increased by 18.4% to RMB 3,025.3 million, with basic earnings per share rising by 19.4% to RMB 1.2228[9]. - The company recorded a sales revenue of RMB 8,337.2 million for the reporting period, representing a year-on-year growth of 20.0% compared to RMB 6,946.0 million in 2020[24]. - The operating revenue from pharmaceutical sales increased by 24.8% to RMB 9,230.2 million, up from RMB 7,395.2 million in 2020[24]. - The annual profit reached RMB 3,025.3 million, reflecting an 18.4% increase from RMB 2,555.7 million in 2020[24]. - Gross profit grew by 21.7% to RMB 6,246.9 million, with a gross margin of 74.9%, up from 73.9% year-on-year[64]. - Other income increased by 36.1% to RMB 146.9 million, primarily due to higher interest income and government subsidies[69]. - Trade receivables increased by 33.2% to RMB 1,395.8 million, reflecting the rise in revenue[74]. - Cash and cash equivalents amounted to RMB 3,385.7 million as of December 31, 2021, compared to RMB 2,668.4 million a year earlier[76]. Dividends and Shareholder Returns - Proposed final dividend of RMB 0.2269 per share, resulting in a total dividend of RMB 0.4910 per share, an increase of 18.7% compared to the previous year[9]. - The board proposed a final dividend of RMB 0.2269 per share, equivalent to HKD 0.279, to be distributed on May 6, 2022, pending shareholder approval[101]. - The company paid dividends of RMB 652.5 million for the 2021 interim and RMB 502.3 million for the 2020 final dividend[88]. - The company aims to balance shareholder interests with prudent capital management through its sustainable dividend policy[102]. - The company’s financial performance and expected operational needs will influence future dividend declarations[102]. Business Development and Innovation - The company is developing a local innovation drug incubation platform in collaboration with Chinese biotech firms, focusing on four fully human antibody new drugs[12]. - The company has initiated a new model for custom innovative product development, targeting areas such as autoimmune diseases and gynecology[12]. - The innovative drug pipeline has expanded to nearly 30 products, with 3 products' registration applications accepted in China and 2 products achieving positive results in bridging trials[18]. - The company has formed an open innovation drug platform linking pharmaceutical innovation with commercialization, enhancing its capabilities in drug lifecycle management[17]. - The company aims to leverage its open innovation platform to connect pharmaceutical innovation with commercialization, enhancing the efficiency of drug development[25]. - The company is committed to expanding its business depth and breadth through independent operations and specialized focus, ensuring long-term growth[25]. - The company has established nearly 30 innovative products with high market potential and competitive advantages globally, with 9 products approved for market in the US/Europe as of December 31, 2021[31]. Acquisitions and Partnerships - Acquired skin medical beauty company Lukai to expand into the medical beauty sector and enhance product offerings[14]. - Acquired ultrasound technology platform company Kangnaixin to develop and produce photonic medical beauty devices, with clinical trials for the FUBA5200 device underway[14]. - Entered into an exclusive cooperation agreement with OVMEDI for high-quality implant line products to meet diverse consumer needs in China[14]. - The company holds a 5.97% stake in Zhuhai Tainuo Maibo Biotechnology Co., with a joint venture established to develop innovative products[27]. - The joint venture with Tainuo Maibo focuses on four innovative products based on the HitmAb® platform, including antibodies for Staphylococcus aureus and COVID-19[28]. Research and Development - The company has initiated two new innovative research models focusing on investment in China's biotech industry and custom development of innovative products[18]. - The company is developing a fully human anti-Sa Hlα antibody drug, currently in preclinical research, aimed at preventing disease progression in high-risk populations and treating infections caused by MRSA[32]. - A fully human anti-HCMV antibody drug is also in preclinical research, with the potential to fill the gap in the market for HCMV monoclonal antibodies, as there are currently no vaccines available globally[33]. - The company is advancing a fully human anti-COVID-19 antibody drug, which shows efficacy against major circulating strains, currently in preclinical research[34]. - The diazepam nasal spray, approved in the US, has received NMPA acceptance for registration in China, demonstrating rapid absorption and good safety tolerance in clinical studies[36]. Market Expansion and Sales Strategy - The company has established a multi-channel sales network, extending its commercialization efforts from mainland China to Hong Kong and Southeast Asia[18]. - The company plans to enhance its product structure in the dermatology aesthetic business, aiming for comprehensive coverage of skin disease medications and a diverse range of aesthetic products[61]. - The company will focus on expanding its e-commerce platform to create popular products, enhancing brand and reputation management in the health sector[61]. - The company aims to develop a leading position in the ophthalmology sector by enhancing its commercialization capabilities and expanding its product offerings[61]. Corporate Governance and Management - The company has a strong management team with extensive experience in the pharmaceutical industry, including Mr. Lin, who has clinical experience and deep understanding of the Chinese pharmaceutical sector[89]. - The company has been recognized multiple times for its financial management, with its CFO receiving accolades for best CFO in the Greater China region[89]. - The company has a robust board of directors with expertise in corporate financing and mergers and acquisitions[91]. - The board consists of six directors, including three executive directors and three independent non-executive directors[142]. - The company emphasizes compliance with listing rules and corporate governance, overseen by the company secretary[96]. Environmental, Social, and Governance (ESG) Initiatives - The company’s ESG efforts received broad recognition, maintaining an "AA" rating from MSCI, surpassing 83% of global peers[21]. - The company is committed to providing affordable, high-quality medications while actively engaging in environmental protection and social responsibility initiatives[21]. - The company has established a three-tier ESG governance structure, including a board of directors, an ESG committee, and an ESG working group, to systematically manage ESG initiatives[178]. - The company aims to reduce greenhouse gas emissions density by at least 5% in 2023 compared to 2020 levels, alongside similar targets for hazardous waste and electricity usage[188]. - The company has committed to ensuring 100% of suppliers and internal employees can report misconduct through established channels, enhancing its anti-corruption framework[187]. Compliance and Risk Management - The company adheres to the GMP and GSP standards, ensuring compliance with the relevant regulations in drug production and operation[123]. - The company has established a compliance management committee chaired by the CEO to oversee compliance and business ethics[197]. - The company has implemented various internal compliance management systems, including anti-fraud and procurement management policies[198]. - The company emphasizes communication with shareholders and investors, engaging over a thousand representatives from domestic and international investment institutions during the reporting period[168].

Financial Performance - Revenue increased by 23.6% to RMB 3,843.0 million compared to RMB 3,108.1 million in the same period last year[7]. - Gross profit grew by 25.3% to RMB 2,873.8 million, up from RMB 2,293.4 million in the previous year[7]. - Profit for the period rose by 25.5% to RMB 1,631.6 million, compared to RMB 1,300.5 million in the same period last year[7]. - Basic earnings per share increased by 27.3% to RMB 0.6587, up from RMB 0.5174 in the previous year[7]. - The group reported a total comprehensive income of RMB 1,646,494 thousand for the period, compared to RMB 1,283,277 thousand in the previous year[85]. - The company reported a net profit of RMB 1,279,421 thousand for the six months ended June 30, 2021, compared to RMB 1,300,515 thousand in the same period of 2020, reflecting a slight decrease[89]. Cash and Dividends - Cash and cash equivalents as of June 30, 2021, amounted to RMB 3,286.0 million, with bank acceptance bills of RMB 368.9 million[7]. - The interim dividend declared at RMB 0.2641 per share, representing a 25.5% increase from RMB 0.2105 in the same period last year[7]. - The company declared a final dividend of RMB 0.2033 per share for the year ended December 31, 2020, totaling RMB 502,306,000, compared to RMB 0.1271 per share and RMB 314,034,000 for the same period in 2019[99]. Research and Development - Research and development expenses rose by 11.3% to RMB 407.0 million, accounting for 10.6% of revenue, down from 11.8% in the previous year[55]. - The company has over 20 innovative products in its pipeline as of June 30, 2021, with 9 products approved in the US and/or Europe, and 4 products in or completed registration clinical trials in China[29]. - The company is focused on expanding its innovative product pipeline and enhancing its clinical trial capabilities to support future growth[29]. Product Development and Acquisitions - The company initiated a new investment model in the Chinese biotech sector, focusing on clinical development and commercialization of innovative drugs[11]. - The company acquired Luqa Ventures Co., Limited in February 2021 to enhance its dermatology product portfolio and enter the medical aesthetics sector[35]. - The company acquired a professional skin medical beauty company, enriching its product layout in the medical beauty field[154]. - The company holds approximately 64.81% of Kangnaixin Medical Technology Co., Ltd., focusing on non-invasive ultrasound technology for body shaping and facial treatments[177]. Market Expansion and Strategy - The company has established a rich promotional network in the dermatology field, including doctors and retail channels, to enhance operational efficiency and expand into the medical aesthetics market[34]. - The company is exploring new retail business models in the health sector to enhance consumer awareness of sub-health conditions and improve the overall consumer experience[41]. - The company aims to leverage synergies among its pharmaceutical, dermatological, and health segments to accelerate corporate value enhancement[49]. Segment Performance - The cardiovascular segment achieved revenue of RMB 1,789.0 million, a year-on-year increase of 23.2%, contributing 54.4% to the total pharmaceutical sales revenue[47]. - The digestive segment reported revenue of RMB 1,455.2 million, up 25.7% year-on-year, accounting for 34.1% of total pharmaceutical sales revenue[47]. - The ophthalmology segment generated revenue of RMB 166.0 million, reflecting a 45.9% increase compared to the previous year, representing 3.9% of total pharmaceutical sales revenue[47]. - The dermatology segment recorded revenue of RMB 131.6 million, a 54.4% year-on-year growth, contributing 3.1% to total pharmaceutical sales revenue[47]. Compliance and Governance - The company maintained compliance with applicable corporate governance codes, although the roles of chairman and CEO are held by the same individual[82]. - The company has implemented a compliance system to strengthen training and assessments, ensuring healthy business development through regular inspections and reviews[43]. Financial Position and Liabilities - The company’s total liabilities decreased to RMB 559,626,000 as of June 30, 2021, from RMB 619,284,000 as of December 31, 2020[107]. - The company’s bank borrowings increased by RMB 493,428,000 during the reporting period, with a weighted average interest rate of 1.6% compared to 3.7% in the previous year[108]. - The debt-to-asset ratio increased from 4.6% as of December 31, 2020, to 7.4% as of June 30, 2021[66].

Financial Performance - Revenue increased by 14.4% to RMB 6,946.0 million, with a normalized revenue growth of 15.4% to RMB 7,957.3 million[5] - Gross profit grew by 12.9% to RMB 5,134.2 million, with a normalized gross profit growth of 16.0% to RMB 4,842.7 million[5] - Annual profit increased by 30.7% to RMB 2,555.7 million, with normalized annual profit growth of 18.4% to RMB 2,696.1 million[5] - Basic earnings per share rose by 29.5% to RMB 1.0237[5] - The group reported a net profit increase of 30.7% to RMB 2,555.7 million, compared to RMB 1,955.7 million in the previous year[63] - Gross profit grew by 12.9% to RMB 5,134.2 million, with a gross margin of 73.9%, down from 74.9% in the previous year[54] - Research and development expenses rose by 35.0% to RMB 527.3 million, accounting for 7.6% of revenue, up from 6.4% in the previous year[57] - Administrative expenses increased by 21.8% to RMB 251.2 million, representing 3.6% of revenue, up from 3.4% in the previous year[56] - Sales expenses grew by 5.9% to RMB 2,053.2 million, with a sales expense ratio of 29.6%, down from 31.9% in the previous year[55] Product Development and Innovation - The company obtained exclusive licensing rights for several innovative products, including MMX and methotrexate pre-filled syringes, in mainland China and other regions[7][8] - The clinical development of new products is progressing rapidly, with trials for diazepam nasal spray and other innovative formulations completed[8] - The company has established a strong pipeline of innovative products with high market potential, driven by over 20 years of successful drug promotion experience[16] - The company has over 20 innovative products in its pipeline, with 9 already approved for market in the US and/or Europe, and 3 undergoing registration trials in China[18] - The product "Methylthioninium Chloride Cosmo" (MMX) has been approved by the European Medicines Agency for commercialization in Europe, aimed at enhancing the sensitivity of colorectal cancer diagnosis[21] - The product "Latanoprost Eye Drops" has received clinical trial application acceptance from the National Medical Products Administration (NMPA) in China in January 2021[20] - The product "Duzag" has received clinical trial approval from the NMPA in January 2021[20] - The company is focusing on expanding its innovative pipeline with a total of 8 products in various stages of clinical trials, including 3 in Phase I, 2 in Phase II, and 3 in Phase III[20] Market Expansion and E-commerce - The company launched its cross-border e-commerce business, with 18 quality products from four European brands available on platforms like JD International[9] - The company launched its cross-border e-commerce platform "Kangzhe Health Overseas Flagship Store" on November 1, 2020, to supply high-quality health products to consumers in mainland China[14] - The health business has launched a cross-border e-commerce platform "Kangzhe Health" with 18 products from 4 well-known European brands available by December 31, 2020[42] Corporate Social Responsibility - The company donated RMB 1 million to Wuhan Charity Association and rapidly procured protective materials, including N95 masks and protective suits, to support frontline workers during the pandemic[12] - The group made charitable donations totaling approximately RMB 18.8 million during the reporting period[118] - The company actively participates in public health support actions and community welfare initiatives[170] Governance and Compliance - The company has established a complete compliance marketing management system, including compliance policies, training, and monitoring[183] - The company has implemented a zero-tolerance policy towards corruption and bribery, requiring suppliers to adhere to local laws and ethical standards[189] - The company has established a robust anti-corruption policy and internal control processes to ensure compliance and protect consumer privacy[170] - The company emphasizes compliance management through a comprehensive policy system and digital technology platform, enhancing risk management and internal controls[180] Human Resources and Employee Engagement - As of December 31, 2020, the company had 4,372 employees, focusing on optimizing human resources and enhancing employee performance through competitive compensation packages[105] - The company has established a compensation committee that regularly monitors the remuneration of directors and senior management to ensure competitiveness and retention[106] - Regular compliance training is conducted for new employees, linking test results to performance evaluations[185] Financial Position and Cash Flow - As of December 31, 2020, cash and cash equivalents amounted to RMB 2,668.4 million[5] - Cash and cash equivalents increased to RMB 2,668.4 million as of December 31, 2020, up from RMB 1,365.0 million in 2019, with a net increase of RMB 1,303.7 million[67][68] - Net cash generated from operating activities rose by 5.4% to RMB 2,692.0 million compared to RMB 2,555.1 million in 2019, driven by increased revenue and improved cash turnover days[68] Risk Management - The company has identified several major risks and uncertainties that may impact its performance and operations, including regulatory changes in China's healthcare system[112] - The company has not obtained product liability insurance for its drug production and distribution in China, which may expose it to significant costs in case of claims[111] Environmental, Social, and Governance (ESG) Initiatives - The company improved its MSCI-ESG rating from "BB" to "AA," indicating a leading position in managing significant ESG risks and opportunities within the industry[161] - The company aims to reduce greenhouse gas emissions density by at least 5% by the end of 2023 compared to 2020 levels[170] - The company has set specific ESG management goals for 2021, including improving compliance management and enhancing product quality control systems[170] Shareholder Information - The company paid interim and final dividends of RMB 520.1 million and RMB 314.0 million for the fiscal year 2020, compared to RMB 467.1 million and RMB 355.7 million for the fiscal year 2019[80] - The board proposed a final dividend of RMB 0.2033 per share, equivalent to HKD 0.243, to be distributed on May 10, 2021, pending shareholder approval[91]