Financial Performance - Revenue for the year ended December 31, 2023, was HKD 1,053,034 thousand, a decrease of 14.6% compared to HKD 1,233,148 thousand in 2022[1] - Gross profit for the same period was HKD 551,311 thousand, down 28.5% from HKD 770,755 thousand in the previous year[1] - Profit attributable to owners of the company was HKD 16,698 thousand, representing a significant decline of 67.4% from HKD 51,284 thousand in 2022[1] - Basic and diluted earnings per share for 2023 were both HKD 2.84, a decrease of 67.4% compared to HKD 8.71 in 2022[1] - Operating profit decreased to HKD 43,553 thousand in 2023 from HKD 76,560 thousand in 2022, representing a decline of 43.2%[18] - Net profit for the year was HKD 19,949 thousand, a significant drop of 56.5% compared to HKD 45,835 thousand in 2022[18] - Total comprehensive income attributable to owners of the company was HKD 124,663 thousand, down from HKD 528,438 thousand in the previous year[6] - Total comprehensive income for 2023 was HKD 127,582 thousand, compared to a loss of HKD 536,605 thousand in 2022[20] Dividends - The board recommended a final dividend of HKD 0.01 per share for the year ended December 31, 2023, unchanged from the previous year[1] - The company declared a total dividend of HKD 10,599,000 for the year, down from HKD 24,142,000 in 2022[78] - The board has proposed a final dividend of HKD 0.010 per share, consistent with the previous year[126] - The company proposes to pay a final dividend subject to shareholder approval at the Annual General Meeting, with payment scheduled for June 17, 2024[153] Assets and Liabilities - Non-current assets decreased to HKD 2,234,040 thousand in 2023 from HKD 2,130,394 thousand in 2022, an increase of 4.9%[22] - Current assets increased to HKD 656,627 thousand in 2023 from HKD 651,634 thousand in 2022, a slight increase of 0.5%[22] - The company reported a total asset value of HKD 2,890,667,000, up from HKD 2,782,028,000 in the previous year[43] - The total liabilities amounted to HKD 930,069,000, slightly down from HKD 939,504,000 in the previous year[43] - Total liabilities as of December 31, 2023, were HKD 930,069,000, slightly down from HKD 939,504,000 in 2022[70] Research and Development - The company reported a decrease in research and development expenses to HKD 96,804 thousand in 2023 from HKD 168,885 thousand in 2022, a reduction of 42.6%[18] - Research and development expenses for the year were HKD 219,849,000, a decrease of 37.5% compared to HKD 351,602,000 in the previous year, accounting for 20.9% of the corresponding annual revenue[114] - The company has over 40 projects in various stages of development, highlighting a robust pipeline for future growth[117] - The company is developing multiple assets in key therapeutic areas, including a new drug application for "Cetraxal® Plus" submitted in January 2023[95] - Research and development expenses are focused on new drug development across major therapeutic areas, including cardiovascular, women's health, pediatrics, rare diseases, dermatology, and obstetrics[137] Sales and Marketing - Sales of introduced products amounted to HKD 467,276,000, representing 44.4% of total revenue, down from 59.5% in the previous year[46] - Sales of patented and generic products reached HKD 585,758,000, accounting for 55.6% of total revenue, up from 40.5% in the previous year[46] - The company continues to strengthen its sales and marketing capabilities to adapt to the increasingly competitive business environment[56] - The company reported a significant increase in sales for its product "布累迪宁™", surpassing HKD 100 million with a growth rate of 18.9%[90] - Sales for "菲普利®" exceeded HKD 200 million, reflecting an 11.3% growth[90] - The company recorded a sales figure of HKD 113.7 million for "曲前列宁注射液（《芮旎尔®》）", with a growth of 13.9%[90] - The company achieved a substantial increase in sales for "曲特恪®", reaching HKD 50.8 million, a remarkable growth of 219.3%[90] Operational Challenges - The company faces challenges due to increasing competition and changing market dynamics, particularly with profit reductions from products included in national medical insurance plans[148] - Rising operational costs and inflation are ongoing challenges that require strategic management and careful attention from the company[148] - The company aims to enhance production capacity while implementing cost-saving measures in response to changing market conditions[50] Regulatory and Compliance - Socazolimab received conditional approval in China for the treatment of recurrent or metastatic cervical cancer, marking a significant milestone for the company[52] - The company has obtained three registration approvals from the National Medical Products Administration during the review period[53] - The INOmax DSIR Plus Delivery System™ received medical device registration from the National Medical Products Administration on May 25, 2023, indicating progress in new product development[120] - Ten products have been included in the latest medical insurance drug list, reflecting the company's efforts to expand market access[123] Future Plans - The company plans to continue implementing cost control measures to enhance profitability and ensure long-term sustainability[125] - The company plans to explore the possibility of entering the next drug procurement program after careful consideration[144] - The production capacity for "立暢青®" and "立騰菁®" is nearing saturation, and a new production line is being designed and constructed, expected to be operational in 2024[139] - The company has successfully completed the production verification for a new injectable product for neonatal respiratory distress syndrome, which is now ready for U.S. supplemental application[139] Shareholder Information - The company will hold its Annual General Meeting on May 22, 2024, with a notice to be sent to shareholders in due course[150] - The company will suspend share transfer registration from May 17, 2024, to May 22, 2024, to determine eligible shareholders for the Annual General Meeting[151]

Financial Performance - For the six months ended June 30, 2023, the company reported a net cash generated from operating activities of HK$39,063,000, a decrease from HK$252,218,000 in the same period of 2022[32]. - The company reported a profit/(loss) for the period of HK$28,460,000, a significant change from the previous year's loss of HK$290,005,000[31]. - The Group's net profit attributable to shareholders for the first half of 2023 was HK$16,117,000, a decrease of 43.4% compared to the same period last year[146]. - The Group's revenue for the first half of 2023 was HK$512,308,000, a decrease of 21.1% compared to HK$649,166,000 in the same period of 2022[157]. - The Group's gross profit for the first half of 2023 was HK$284,463,000, a decrease of 32.2% compared to HK$419,478,000 in the same period last year, with a gross profit margin of 55.5%, down 9.1 percentage points from 64.6% in the first half of 2022[141][160]. Cash and Liquidity - As of June 30, 2023, the company's cash and bank balances were HK$161,519,000, down from HK$368,047,000 as of June 30, 2022, indicating a decline of approximately 56.2%[34]. - The net decrease in cash and cash equivalents for the six months ended 30 June 2023 was HK$ (28,782) thousand, down from an increase of HK$ 85,194 thousand in the same period last year[46]. - Cash and cash equivalents at 30 June 2023 amounted to HK$ 161,519 thousand, a decrease from HK$ 368,047 thousand at the end of the previous period[46]. - The Group's principal sources of working capital include cash flow from operating and financing activities[194]. Investments and Dividends - The company incurred a net cash used in investing activities of HK$1,929,000 for the six months ended June 30, 2023, compared to HK$19,450,000 in the same period of 2022[32]. - The company paid dividends amounting to HK$88,587,000 during the reporting period, compared to HK$116,475,000 in the previous year[32]. Assets and Liabilities - The total liabilities of the Group reached HK$1,001,133,000 as of June 30, 2023[114]. - Total assets increased to HK$2,897,746,000 as of June 30, 2023, compared to HK$2,782,028,000 in 2022, reflecting a growth of approximately 4.1%[114]. - Segment liabilities rose to HK$596,649,000 as of June 30, 2023, up from HK$574,762,000 in 2022, indicating an increase of about 3.0%[114]. Research and Development - Research and development expenses for the same period amounted to (116,590), compared to (48,798) in the prior period, indicating increased investment in innovation[95]. - R&D expenses totaled HK$113,634,000, a 45.0% decrease from HK$206,517,000 in the first half of 2022, accounting for 22.2% of revenue[159]. - The Group is currently developing over 40 projects in its pipeline, including late-stage programs for various therapeutic areas such as cardiovascular and rare diseases[198][199]. - The NDA for Cetraxal® Plus was successfully submitted and accepted by the CDE in January 2023, following the completion of its Phase III clinical trial in 2022[199]. Market and Competition - More than 90% of the Group's revenue was derived from activities conducted in the People's Republic of China during the six months ended June 30, 2023[115]. - The Group is facing challenges from increased competition and elevated operating costs due to inflation in the second half of 2023[177]. - The Group is facing challenges from increased competition and profit reductions from products included in national procurement plans, necessitating strategic management[179]. Operational Efficiency and Strategy - The Group is focusing on enhancing production yield and pursuing cost-saving measures to adapt to the evolving market environment[148]. - The Group's operational efficiency has improved, allowing it to navigate the risks and opportunities presented by national reimbursement schemes[155]. - The Group's strategy includes optimizing resource allocation for priority R&D projects to continuously reduce costs[143]. - The Group aims to expand market reach and increase sales through participation in national reimbursement schemes and volume-based procurement programs[139]. Financial Reporting and Compliance - The company’s financial statements were prepared in accordance with Hong Kong Accounting Standards, ensuring compliance and accuracy[2]. - The unaudited condensed consolidated financial statements have been prepared in accordance with HKAS 34 and the applicable disclosure requirements of the Listing Rules[48]. - The application of amendments to HKFRS has had no material effect on the reported amounts in the unaudited condensed consolidated financial statements[54].

[Financial Summary](index=1&type=section&id=Financial%20Summary) The overall financial performance for H1 2023 showed a decline in key metrics including revenue, profit, and interim dividend [Overview of Financial Summary](index=1&type=section&id=Overview%20of%20Financial%20Summary) Lee's Pharmaceutical's revenue, gross profit, profit attributable to owners, and EPS decreased, along with a reduced interim dividend for H1 2023 Financial Summary for the Six Months Ended June 30 | Indicator | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 512,308 | 649,166 | -21.1% | | Gross Profit | 284,463 | 419,478 | -32.2% | | Profit Attributable to Owners of the Company | 16,117 | 28,460 | -43.4% | | Earnings Per Share (Basic) | 2.74 HK Cents | 4.83 HK Cents | -43.3% | | Earnings Per Share (Diluted) | 2.74 HK Cents | 4.83 HK Cents | -43.3% | | Interim Dividend Per Share | 0.80 HK Cents | 1.00 HK Cents | -20.0% | [Business Review](index=2&type=section&id=Business%20Review) The business review highlights revenue decline, R&D focus, manufacturing upgrades, pipeline progress, new product approvals, enhanced sales, and a challenging outlook [Revenue and Profit](index=2&type=section&id=Revenue%20and%20Profit) H1 2023 revenue decreased by 21.1% to HK$512.3 million due to license expirations and RMB depreciation, with gross margin falling to 55.5% despite some product growth - The Group's H1 2023 revenue was **HK$512,308,000**, a **21.1% decrease** year-on-year, primarily due to product license expirations, declining sales, and RMB depreciation[25](index=25&type=chunk) - Gross profit was **HK$284,463,000**, a **32.2% decrease** year-on-year. Overall gross profit margin was **55.5%**, down **9.1 percentage points** from 64.6% in H1 2022, mainly due to a shift towards lower-margin generic products[27](index=27&type=chunk) Major Product Sales Growth in H1 2023 | Product Name | Growth Rate (%) | | :--- | :--- | | Fepril® | 39.6% | | Breadyne™ | 43.4% | | Sancuso® | 197.4% | | Tratek® | 176.3% | | Fondaparinux Sodium Injection | 584.1% | | Sodium Phenylbutyrate Granules | 83.5% | - Profit attributable to owners of the company was **HK$16,117,000**, a **43.4% decrease** compared to H1 2022[28](index=28&type=chunk) [Research and Development](index=3&type=section&id=Research%20and%20Development) H1 2023 R&D expenses decreased by 45.0% to HK$113.6 million, representing 22.2% of revenue, due to strategic project selection and cost optimization H1 2023 R&D Expenses | Indicator | H1 2023 (HK$ Thousand) | H1 2022 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total R&D Expenses | 113,634 | 206,517 | -45.0% | | % of Revenue | 22.2% | 31.8% | -9.6 percentage points | | Recognized as Expense | 48,798 | 116,590 | -58.1% | | Capitalized as Intangible Assets | 64,836 | 89,927 | -27.8% | - The decrease in R&D expenses resulted from strategically selecting new projects after the completion of previous ones and continuously optimizing resource allocation for priority R&D projects to reduce costs[8](index=8&type=chunk) [Manufacturing Facilities and Production Capacity](index=3&type=section&id=Manufacturing%20Facilities%20and%20Production%20Capacity) The Group aims to increase production and save costs, with Hefei and Nansha bases completing facility upgrades and process enhancements - The Group's primary objectives are to increase production output while implementing cost-saving measures to adapt to the evolving market environment[10](index=10&type=chunk) - - Hefei Base: Completed capacity enhancement and process scale-up facility upgrades for Yujingan®, co-line facility upgrades for new pre-filled syringe products before launch, and registration batch production for new oral lyophilized powder dosage forms[29](index=29&type=chunk)[30](index=30&type=chunk) - - Nansha Base: Process scale-up equipment for aerosol inhalants has been installed and commissioned, with trial production expected shortly; production process upgrades for oral antihypertensive products are progressing well, with three pilot tests completed[29](index=29&type=chunk)[30](index=30&type=chunk) [Drug Development](index=4&type=section&id=Drug%20Development) The Group has over 40 drug development projects across multiple therapeutic areas, with several late-stage programs showing positive progress - The Group's pipeline includes over **40 projects** at various early to late development stages[31](index=31&type=chunk) - - Cetraxal® Plus: New Drug Application (NDA) for acute otitis externa and acute otitis media with tympanostomy tubes was submitted to CDE and accepted in January 2023[11](index=11&type=chunk) - - Intrarosa®: Currently in Phase III clinical trials for vulvovaginal atrophy, with the clinical database locked and unblinded, and data expected to be published soon[11](index=11&type=chunk) - - Fentanyl Aerosol Inhaler: Phase IIa clinical trial successfully met its primary endpoints in August 2023, with results to accelerate NDA review and approval[11](index=11&type=chunk) [Oncology Pipeline](index=4&type=section&id=Oncology%20Pipeline) COF, the Group's oncology R&D branch, has a pipeline of 10 assets, including Socazolimab and other novel drug candidates in various clinical stages - China Oncology Focus Limited (COF), the Group's R&D branch in oncology, has established a pipeline of **10 oncology assets**, comprising **6 innovative drugs** and **4 generic drugs**[32](index=32&type=chunk) - - Socazolimab (anti-PD-L1 antibody): New Drug Application (NDA) stage for recurrent or metastatic cervical cancer in China; Phase III clinical trial for osteosarcoma; Phase III clinical trial for small cell lung cancer combined with chemotherapy has completed patient enrollment[32](index=32&type=chunk)[33](index=33&type=chunk) - - Zotiraciclib: An oral multi-kinase inhibitor, currently in Phase I clinical trials for glioblastoma[32](index=32&type=chunk)[33](index=33&type=chunk) - - Gemcitabine: A topoisomerase I inhibitor, currently in Phase II clinical trials for ovarian cancer, Phase Ib/II clinical trials for small cell lung cancer, and Phase I clinical trials for pancreatic cancer in China[32](index=32&type=chunk)[33](index=33&type=chunk) - - Socazolimab combined with Pexa-vec (oncolytic virus): Currently in Phase Ib clinical trials for melanoma[32](index=32&type=chunk)[33](index=33&type=chunk) [New Product Approvals](index=5&type=section&id=New%20Product%20Approvals) The Group secured two NMPA approvals, including INOmax DSIR Plus Delivery System™ and Apremilast Tablets, with the latter launching in Q4 2023 - The Group has obtained **two registration approvals** from the National Medical Products Administration ("NMPA")[14](index=14&type=chunk) - - INOmax DSIR Plus Delivery System™: Obtained NMPA's national medical device registration certificate on May 25, 2023, for treating term and near-term infants (≥34 weeks gestation) with hypoxic respiratory failure associated with pulmonary hypertension[35](index=35&type=chunk)[143](index=143&type=chunk) - - Apremilast Tablets: Approved for registration by NMPA on June 14, 2023, for adult patients with moderate to severe plaque psoriasis eligible for phototherapy or systemic therapy, expected to launch in Q4 2023[35](index=35&type=chunk)[143](index=143&type=chunk) [Sales and Marketing](index=5&type=section&id=Sales%20and%20Marketing) The Group enhanced sales and marketing, focusing on market access, with several products, including rare disease drugs, newly added to China's NRDL - The Group has significantly strengthened its sales and marketing capabilities in recent years, with market access becoming a crucial aspect, implementing various steps to empower the market access team within China's complex healthcare landscape[15](index=15&type=chunk) - The Group's commercialized products, Treprostinil Injection, Teglutik®, and Tratek®, were newly included in China's National Reimbursement Drug List (NRDL), bringing the total to **nine products** in the latest NRDL edition to date[16](index=16&type=chunk)[50](index=50&type=chunk) - As of 2023, the Group has **two newly approved products**, with **two more new drug applications** expected to be approved by year-end, which, combined with **seven products approved in 2022**, will generate new revenue streams in the near future[51](index=51&type=chunk) [Outlook](index=6&type=section&id=Outlook) The Group anticipates a challenging H2 2023 due to competition, market changes, reduced margins, and rising costs, responding with cost-saving measures and efficiency optimization - - Market Environment Challenges: Intensified competition, evolving market dynamics, reduced profit margins for products included in the National Reimbursement Drug List (NRDL) or National Centralized Drug Procurement program, rising operating costs, and inflationary pressures[37](index=37&type=chunk)[38](index=38&type=chunk) - - Response Strategy: The Group will continue to steadfastly implement cost-saving measures across all operational levels, prioritizing efficiency and resource optimization to ensure sustainable profitability[37](index=37&type=chunk)[38](index=38&type=chunk) [Interim Financial Statements](index=7&type=section&id=Interim%20Financial%20Statements) This section presents the condensed consolidated financial statements, including statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) H1 2023 revenue was HK$512.3 million, with gross profit of HK$284.5 million and profit attributable to owners of HK$16.1 million Condensed Consolidated Statement of Profit or Loss (For the Six Months Ended June 30) | Indicator | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 512,308 | 649,166 | | Cost of Sales | (227,845) | (229,688) | | Gross Profit | 284,463 | 419,478 | | Other Income | 40,949 | 45,702 | | Net Other Gains and Losses | (5,736) | (5,227) | | Selling and Distribution Expenses | (146,931) | (176,215) | | Administrative Expenses | (90,584) | (111,075) | | Provision for Expected Credit Losses on Financial Assets | (296) | (253) | | Research and Development Expenses | (48,798) | (116,590) | | Operating Profit | 33,067 | 55,820 | | Finance Costs | (5,439) | (3,499) | | Share of Results of Associates | (440) | (526) | | Profit Before Tax | 27,188 | 51,795 | | Taxation | (6,279) | (24,713) | | Profit for the Period | 20,909 | 27,082 | | Profit Attributable to Owners of the Company | 16,117 | 28,460 | | Non-controlling Interests | 4,792 | (1,378) | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) H1 2023 profit for the period was HK$20.9 million, with total comprehensive income of HK$59.4 million, driven by fair value changes and exchange differences Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Profit for the Period | 20,909 | 27,082 | | Other Comprehensive (Expense) / Income: | | | | - Exchange differences on translation of financial statements of overseas subsidiaries | (48,217) | (49,811) | | - Fair value changes of financial assets at fair value through other comprehensive income | 86,690 | (291,865) | | Other Comprehensive Income / (Expense) for the Period, Net of Tax | 38,473 | (341,676) | | Total Comprehensive Income / (Expense) for the Period | 59,382 | (314,594) | | Total Comprehensive Income / (Expense) for the Period Attributable to: | | | | Owners of the Company | 55,214 | (310,998) | | Non-controlling Interests | 4,168 | (3,596) | [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets increased to HK$2.9 billion, driven by non-current assets and increased inventories, while total liabilities reached HK$1 billion due to higher borrowings Condensed Consolidated Statement of Financial Position (As of June 30, 2023) | Indicator | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 495,148 | 540,665 | | Intangible Assets | 1,035,691 | 1,023,494 | | Financial Assets at Fair Value Through Other Comprehensive Income | 625,208 | 536,452 | | Total Non-current Assets | 2,190,878 | 2,130,394 | | **Current Assets** | | | | Inventories | 325,092 | 249,222 | | Trade Receivables | 120,072 | 111,278 | | Cash and Bank Balances | 161,519 | 189,301 | | Total Current Assets | 706,868 | 651,634 | | **Current Liabilities** | | | | Trade Payables | 115,269 | 101,301 | | Bank and Other Borrowings | 108,883 | 76,727 | | Total Current Liabilities | 704,766 | 650,104 | | **Non-current Liabilities** | | | | Bank and Other Borrowings | 77,363 | 77,363 | | Deferred Tax Liabilities | 71,012 | 73,897 | | Total Non-current Liabilities | 296,367 | 289,400 | | **Total Equity** | | | | Equity Attributable to Owners of the Company | 1,974,028 | 1,924,107 | | Non-controlling Interests | (77,415) | (81,583) | | Total Equity | 1,896,613 | 1,842,524 | [Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Equity attributable to owners increased to HK$1.97 billion by June 30, 2023, driven by profit and fair value changes, despite dividend payments - Equity attributable to owners of the company increased to **HK$1,974,028 thousand** as of June 30, 2023, from **HK$1,924,107 thousand** on January 1, 2023[136](index=136&type=chunk) - - Profit for the period contributed **HK$16,117 thousand**[136](index=136&type=chunk) - - Fair value changes of financial assets at fair value through other comprehensive income resulted in a gain of **HK$86,917 thousand**[136](index=136&type=chunk) - - Payment of 2022 final dividend amounted to **HK$5,888 thousand**[136](index=136&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) H1 2023 net cash from operations significantly decreased to HK$39.1 million, with net cash used in investing at HK$88.6 million, resulting in a period-end cash balance of HK$161.5 million Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Indicator | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 39,063 | 252,218 | | Net Cash Used in Investing Activities | (88,587) | (116,475) | | Net Cash Generated from / (Used in) Financing Activities | 20,742 | (50,549) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (28,782) | 85,194 | | Cash and Cash Equivalents at June 30 | 161,519 | 368,047 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the unaudited condensed consolidated financial statements, covering accounting policies, segment data, and various financial components [Basis of Preparation and Principal Accounting Policies](index=13&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The unaudited condensed consolidated financial statements are prepared under HKAS 34 and Listing Rules, with new HFRS amendments having no material impact - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants (HKICPA) and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[62](index=62&type=chunk) - Certain amendments to Hong Kong Financial Reporting Standards issued by the HKICPA, mandatory for annual periods beginning on or after January 1, 2023, were first applied in this reporting period but had no significant impact on the amounts presented and/or disclosures contained in these unaudited condensed consolidated financial statements[47](index=47&type=chunk) [Segment Information](index=14&type=section&id=Segment%20Information) The Group's segments are "Proprietary and Generic Products" and "In-licensed Products," with H1 2023 showing growth in the former and decline in the latter, and over 90% of revenue from China - The Group's reportable and operating segments are "Proprietary and Generic Products" (manufacturing and sales of self-developed and generic drugs) and "In-licensed Products" (trading of in-licensed drugs)[49](index=49&type=chunk)[66](index=66&type=chunk)[82](index=82&type=chunk) - For the six months ended June 30, 2023 and 2022, over **90% of the Group's revenue** was derived from operations in the People's Republic of China, thus no geographical information on revenue is presented[69](index=69&type=chunk) [Segment Revenue and Results](index=15&type=section&id=Segment%20Revenue%20and%20Results) H1 2023 saw proprietary and generic product revenue grow to HK$272.1 million, while in-licensed product revenue significantly dropped to HK$240.2 million Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2023 Revenue (HK$ Thousand) | 2022 Revenue (HK$ Thousand) | 2023 Operating Results (HK$ Thousand) | 2022 Operating Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Proprietary and Generic Products | 272,091 | 252,087 | 58,978 | 85,948 | | In-licensed Products | 240,217 | 397,079 | 35,889 | 105,795 | | Consolidated Total | 512,308 | 649,166 | 94,867 | 191,743 | - Research and development expenses for the Proprietary and Generic Products segment were **HK$16,713 thousand** (2022: HK$30,915 thousand), and for the In-licensed Products segment were **HK$32,085 thousand** (2022: HK$85,675 thousand)[67](index=67&type=chunk) [Segment Assets and Liabilities and Geographical Information](index=16&type=section&id=Segment%20Assets%20and%20Liabilities%20and%20Geographical%20Information) As of June 30, 2023, total assets were HK$2.9 billion and total liabilities were HK$1 billion, with China accounting for a significant portion Segment Assets and Liabilities (As of June 30, 2023) | Segment | June 30, 2023 Assets (HK$ Thousand) | December 31, 2022 Assets (HK$ Thousand) | June 30, 2023 Liabilities (HK$ Thousand) | December 31, 2022 Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Proprietary and Generic Products | 779,089 | 726,742 | 226,069 | 176,617 | | In-licensed Products | 1,311,250 | 1,311,699 | 370,580 | 398,145 | | Consolidated Total | 2,897,746 | 2,782,028 | 1,001,133 | 939,504 | Geographical Assets and Liabilities (As of June 30, 2023) | Region | June 30, 2023 Assets (HK$ Thousand) | December 31, 2022 Assets (HK$ Thousand) | June 30, 2023 Liabilities (HK$ Thousand) | December 31, 2022 Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | China | 1,708,843 | 1,696,915 | 444,703 | 406,734 | | Hong Kong and Others | 1,188,903 | 1,085,113 | 556,430 | 532,770 | | Total | 2,897,746 | 2,782,028 | 1,001,133 | 939,504 | [Other Income](index=17&type=section&id=Other%20Income) H1 2023 other income decreased to HK$40.9 million, primarily from development grants and rental income, while R&D service income significantly declined Other Income Details (For the Six Months Ended June 30) | Income Category | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 662 | 1,183 | | Development and Government Grants | 26,179 | 17,094 | | Rental and Utility Income | 7,525 | 5,997 | | Research and Development Service Income | 4,067 | 19,220 | | Miscellaneous Income | 2,516 | 2,208 | | **Total** | **40,949** | **45,702** | - The Group received development grants from local governments in recognition of its performance and development of high-tech pharmaceutical products[85](index=85&type=chunk) [Profit Before Tax](index=17&type=section&id=Profit%20Before%20Tax) H1 2023 profit before tax was calculated after deducting HK$77.7 million in depreciation and amortization, HK$4.6 million in interest, and HK$0.6 million in share-based payments Profit Before Tax Deductions (For the Six Months Ended June 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment (including right-of-use assets) | 49,601 | 60,606 | | Amortization of Intangible Assets | 28,146 | 17,930 | | **Total Depreciation and Amortization** | **77,747** | **78,536** | | Interest Expense on Borrowings | 4,594 | 2,513 | | Interest Expense on Lease Liabilities | 361 | 226 | | Share-based Payments | 595 | 6,349 | | - Directors | 186 | 4,441 | | - Employees | 409 | 1,908 | [Taxation](index=18&type=section&id=Taxation) H1 2023 total taxation significantly decreased to HK$6.3 million, with Hong Kong profits tax on a two-tiered system and a deferred tax credit Taxation Details (For the Six Months Ended June 30) | Tax Category | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Current Tax: | | | | Hong Kong Profits Tax | 10,895 | 12,436 | | China Corporate Income Tax | – | 362 | | Under-provision in Prior Years: | | | | China Corporate Income Tax | 17 | – | | Deferred Tax (Credit) / Charge for Temporary Differences | (4,633) | 11,915 | | **Total** | **6,279** | **24,713** | - Hong Kong profits tax is calculated at **8.25%** on the first HK$2 million of estimated assessable profits and **16.5%** on profits above HK$2 million. Taxes arising in China are calculated at the prevailing local tax rates[72](index=72&type=chunk) [Dividends](index=18&type=section&id=Dividends) The Board proposed an interim dividend of HK$0.008 per share, totaling HK$4.7 million, declared post-period and not recognized as a liability - The declared interim dividend is **HK$0.008 per ordinary share** (2022: HK$0.010), totaling **HK$4,711 thousand**[73](index=73&type=chunk) - This dividend was declared after the interim report date and therefore has not been recognized as a liability in the condensed consolidated statement of financial position[151](index=151&type=chunk) - The 2022 final dividend of **HK$0.010 per share** (totaling **HK$5,888,000**) was paid on June 15, 2023[151](index=151&type=chunk) [Earnings Per Share](index=19&type=section&id=Earnings%20Per%20Share) H1 2023 basic and diluted EPS attributable to owners decreased to **HK$0.0274**, based on 588.8 million weighted average ordinary shares Earnings Per Share (For the Six Months Ended June 30) | Indicator | 2023 (HK Cents) | 2022 (HK Cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 2.74 | 4.83 | | Diluted Earnings Per Share | 2.74 | 4.83 | - Profit attributable to owners of the company for the purpose of calculating basic and diluted earnings per share was **HK$16,117 thousand** (2022: HK$28,460 thousand)[89](index=89&type=chunk) - The weighted average number of ordinary shares for the purpose of calculating basic earnings per share was **588,835 thousand shares**[90](index=90&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=19&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) H1 2023 saw additions of HK$13 million in right-of-use assets, HK$15 million in PPE, and HK$72 million in intangible assets, with no impairment recognized - - Additions to right-of-use assets amounted to approximately **HK$13,000 thousand** (2022: approximately HK$2,000 thousand)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - - Additions to owned property, plant and equipment amounted to approximately **HK$15,000 thousand** (2022: approximately HK$7,000 thousand)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - - Additions to intangible assets amounted to approximately **HK$72,000 thousand** (2022: approximately HK$90,000 thousand), which included patent fees and development costs[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - No impairment provisions or write-offs for intangible assets were recognized in profit or loss for the six months ended June 30, 2022 and 2023[92](index=92&type=chunk) [Interests in Associates](index=20&type=section&id=Interests%20in%20Associates) As of June 30, 2023, interests in associates totaled HK$5.3 million, including Prolife Pharmaceutical and Zhihe Bio-Tech, engaged in drug development and radiopharmaceutical services Changes in Interests in Associates (As of June 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | At Beginning of Period / Year | 5,163 | 6,267 | | Additions | 605 | – | | Share of Post-acquisition Losses | (440) | (1,104) | | At End of Period / Year | 5,328 | 5,163 | Details of Principal Associates (As of June 30, 2023) | Associate Name | Place of Incorporation / Operation | Proportion of Ownership Interest Held by the Group | Principal Activities | | :--- | :--- | :--- | :--- | | Prolife Pharmaceutical Co., Limited | British Virgin Islands / Hong Kong | 33.92% | Development, manufacture and sale of pharmaceutical products | | Zhihe Bio-Tech Limited | Hong Kong / Hong Kong | 37.69% | Investment holding and operation of a central pharmacy for compound radiopharmaceuticals | [Trade Receivables](index=20&type=section&id=Trade%20Receivables) As of June 30, 2023, trade receivables increased to HK$120.1 million, with an average credit period of 30-120 days and most balances aged 0-30 days - The Group grants an average credit period of **30 to 120 days** to its trade customers[94](index=94&type=chunk) Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 73,519 | 55,268 | | 31 to 120 Days | 44,173 | 39,643 | | 121 to 180 Days | 1,619 | 9,057 | | 181 to 365 Days | 742 | 7,282 | | Over 365 Days and Within 3 Years | 19 | 28 | | **Total** | **120,072** | **111,278** | [Trade Payables](index=21&type=section&id=Trade%20Payables) As of June 30, 2023, trade payables increased to HK$115.3 million, with an average credit period of 90 days and most balances aged 0-90 days - The average credit period for purchases of certain goods is **90 days**[97](index=97&type=chunk) Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 90 Days | 64,300 | 75,204 | | 91 to 180 Days | 26,383 | – | | 181 to 365 Days | 107 | 26,037 | | Over 365 Days | 24,479 | 60 | | **Total** | **115,269** | **101,301** | [Bank and Other Borrowings](index=21&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2023, total bank and other borrowings were HK$186.2 million, with all bank borrowings classified as current due to demand clauses, at 6.00% to 7.03% interest Bank and Other Borrowings (As of June 30) | Borrowing Category | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Secured Bank Borrowings Classified as Current Liabilities | 106,727 | 76,727 | | Unsecured Other Borrowings Classified as Current Liabilities | 2,156 | – | | Secured Bank Borrowings Classified as Non-current Liabilities | 77,363 | 77,363 | | **Total** | **186,246** | **154,090** | - Bank borrowings are classified entirely as current liabilities due to clauses granting the lenders an unconditional right to demand repayment at any time, in accordance with Hong Kong Interpretation 5[116](index=116&type=chunk) - The effective annual interest rates for the Group's bank and other borrowings ranged from **6.00% to 7.03%** (December 31, 2022: 6.42% to 6.75%), denominated in Hong Kong Dollars and Renminbi[100](index=100&type=chunk)[118](index=118&type=chunk) [Share Capital](index=22&type=section&id=Share%20Capital) As of June 30, 2023, authorized share capital was HK$50 million (1 billion shares), with issued and fully paid capital at HK$29.4 million (588.8 million shares) Share Capital Details (As of June 30) | Share Capital Category | Number of Shares as of June 30, 2023 | Share Capital as of June 30, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Authorized: Ordinary Shares of HK$0.05 Par Value Each | 1,000,000,000 | 50,000 | | Issued and Fully Paid: At Beginning and End of Period / Year | 588,835,343 | 29,442 | [Related Party Transactions](index=22&type=section&id=Related%20Party%20Transactions) During the period, key management compensation totaled HK$12.6 million, and the Group donated HK$0.2 million to the Lee To Ching Fong Scholarship, a related party Key Management Personnel Compensation (For the Six Months Ended June 30) | Compensation Category | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Short-term Employee Benefits | 9,382 | 8,541 | | Share-based Payments | 186 | 4,441 | | Retirement and Other Post-employment Benefits | 3,034 | 2,609 | | **Total** | **12,602** | **15,591** | - Donations to the Lee To Ching Fong Scholarship totaled **HK$200,000** for the six months ended June 30, 2023 (2022: HK$1,900,000)[103](index=103&type=chunk) [Capital Commitments and Pledged Assets](index=23&type=section&id=Capital%20Commitments%20and%20Pledged%20Assets) As of June 30, 2023, capital commitments totaled HK$161.1 million for investments in financial assets, intangible assets, and PPE, with no pledged assets Contracted Capital Commitments (As of June 30) | Commitment Category | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Investments in Financial Assets at Fair Value Through Other Comprehensive Income | 20,588 | 22,654 | | Intangible Assets - Patent Fees and Development Costs | 114,809 | 129,770 | | Property, Plant and Equipment | 25,744 | 79,295 | | **Total** | **161,141** | **231,719** | - No assets were pledged as of June 30, 2023, and December 31, 2022[104](index=104&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section provides additional information on the company's operations, including securities activities, dividend declarations, corporate governance, and board composition [Purchase, Sale or Redemption of Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during H1 2023 - For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[128](index=128&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board recommended an interim dividend of HK$0.008 per share to shareholders registered by September 15, 2023 - The Board recommended an interim dividend of **HK$0.008 per share** (2022: HK$0.010) to shareholders registered in the company's register of members at the close of business on Friday, September 15, 2023[105](index=105&type=chunk) [Closure of Register of Members](index=24&type=section&id=Closure%20of%20Register%20of%20Members) The company will suspend its register of members from September 14-15, 2023, for interim dividend eligibility, with transfer documents due by September 13 - The company will suspend its register of members from Thursday, September 14, 2023, to Friday, September 15, 2023 (both days inclusive)[106](index=106&type=chunk) - To ensure eligibility for the interim dividend, all transfer documents, accompanied by the relevant share certificates, must be lodged with the company's Hong Kong share registrar by 4:30 p.m. on Wednesday, September 13, 2023[106](index=106&type=chunk) [Corporate Governance Practices](index=24&type=section&id=Corporate%20Governance%20Practices) The company complied with the Listing Rules' Corporate Governance Code for H1 2023 and will continue to review practices for ongoing adherence - The company has complied with the Corporate Governance Code set out in Appendix 14 to the Listing Rules for the six months ended June 30, 2023[129](index=129&type=chunk) - The Board will continue to review the company's corporate governance practices from time to time to ensure compliance with the Corporate Governance Code[107](index=107&type=chunk) [Publication of Financial Information](index=24&type=section&id=Publication%20of%20Financial%20Information) The company will publish its H1 2023 interim report on the HKEX and company websites and dispatch it to shareholders - The company will dispatch its interim report for the six months ended June 30, 2023, to its shareholders and publish it on the website of The Stock Exchange of Hong Kong Limited (http://www.hkexnews.hk) and the company's website (http://www.leespharm.com) in due course[123](index=123&type=chunk) [Board of Directors](index=24&type=section&id=Board%20of%20Directors) As of this announcement, the Board includes Executive Directors Ms. Lee Siu Fong (Chairman) and Ms. Lee Ye Ni, two Non-executive Directors, and three Independent Non-executive Directors - - Executive Directors: Ms. Lee Siu Fong (Chairman), Ms. Lee Ye Ni[124](index=124&type=chunk) - - Non-executive Directors: Dr. Li Xiao Yi, Mr. James Charles Gale[124](index=124&type=chunk) - - Independent Non-executive Directors: Dr. Chan Hau Chong, Ms. Chiang Kwai Wah, Dr. Jim Wah Keung[124](index=124&type=chunk)

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佈的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全 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。 Lee’s Pharmaceutical Holdings Limited 李 氏 大 藥 廠 控 股 有 限 公 司 * （於開曼群島註冊成立之有限公司） （股份代號：950） 有 關 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 年 報 之 補 充 公 佈 茲提述李氏大藥廠控股有限公司（「本公司」）截至二零二二年十二月三十一日 止年度之年報（「年報」）。除非文義另有所指，否則本公佈所用之專有詞彙與年 報所界定者具相同涵義。 除年報「購股權計劃」一節及綜合財務報表附註中之附註37所提供之資料外， 董事會謹此就購股權計劃下之購股權提供以下進一步資料。 年報載列，2,510,000份購股權已於報告年度內註銷或失效，具體而言全部均為 於報告年度內按照二零一二年購股權計劃之條款失效之購股權，並無購股權 於報告年度內註銷。 以上額外資料並不影響年報所載任何其他資料。除本公佈所披露者外，年報所 ...

[Cessation of Quarterly Financial Results Announcement](index=1&type=section&id=Announcement%20of%20Cessation%20of%20Quarterly%20Financial%20Results) The company's Board of Directors announced the cessation of proactive quarterly financial results publication, while continuing with interim and annual reports [Decision Details](index=1&type=section&id=Decision%20Details) The Board of Directors of Lee's Pharmaceutical Holdings Limited announced the cessation of proactive publication of quarterly financial results for the first three and nine months of the current and subsequent financial years, while continuing to publish interim and annual results as per HKEX listing rules - The company will cease to proactively announce and publish quarterly financial results for the first three and nine months of the current and subsequent financial years[1](index=1&type=chunk) - The company will continue to announce and publish its interim and annual financial results in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited[3](index=3&type=chunk) [Rationale and Impact](index=1&type=section&id=Rationale%20and%20Impact) The Board believes that ceasing quarterly results will reduce company burden, allowing management to focus on core operations, while maintaining shareholder communication and financial transparency without compromising investor interests - Cessation of quarterly financial results publication will reduce the company's time, effort, costs, and administrative burden, allowing management to focus more on the operation and development of the Group's principal businesses[5](index=5&type=chunk) - The company will continue to communicate with shareholders and investors in a timely and proactive manner, providing sufficient transparency regarding the Group's financial position[5](index=5&type=chunk) - The Board believes that ceasing the publication of quarterly financial results will not sacrifice or prejudice the interests of the company's shareholders and investors[5](index=5&type=chunk) [Corporate Governance and General Information](index=1&type=section&id=Corporate%20Governance%20and%20General%20Information) This announcement, issued by the Board of Lee's Pharmaceutical Holdings Limited, lists the executive, non-executive, and independent non-executive directors as of the announcement date, April 28, 2023 - As of the announcement date, the executive directors are Ms. Lee Siu Fong (Chairman) and Ms. Lee Yuen Yee; the non-executive directors are Dr. Li Xiao Yi and Mr. James Charles Gale; and the independent non-executive directors are Dr. Chan Hau Chong, Mr. Lam Yat Cheong, and Dr. Jim Wah Keung[4](index=4&type=chunk) - The announcement date is April 28, 2023[6](index=6&type=chunk)

Company Overview - The company has over 25 years of experience in the pharmaceutical industry in China, focusing on research-driven and market-oriented biopharmaceutical development[12]. - The group markets over 25 proprietary, generic, and licensed-in pharmaceutical products across Mainland China, Hong Kong, Macau, and Taiwan[13]. - The company has more than 40 products in various development stages, stemming from both internal R&D and licensing agreements with companies from the US, Europe, and Japan[14]. - The company has established extensive partnerships with over 20 international companies to enhance its product offerings[13]. - The group focuses on key disease areas such as cardiovascular, women's health, pediatrics, rare diseases, oncology, dermatology, and obstetrics[14]. Manufacturing and Operations - The manufacturing plant in Hefei, Anhui Province, operates four GMP-compliant workshops for producing topical gel, lyophilised powder for injection, small volume parenteral solutions, and eye gel[15]. - The Guangzhou manufacturing site includes a complete range of solid dosage production lines for tablets and capsules[15]. - The Group's Hefei site has completed production capacity expansion for Yallaferon® and upgrades for new prefilled syringe injection products[72]. - The Group's manufacturing operations are overseen by Victor Tsui, ensuring high standards in production management and quality control[189]. Financial Performance - Revenue for 2022 was HK$1,233,148,000, a decrease of 2.6% from HK$1,266,157,000 in 2021[25]. - Gross profit declined by 4.4% to HK$770,755,000 from HK$806,284,000 in the previous year[25]. - Profit attributable to the owners of the company plummeted by 97.4% to HK$51,284,000 compared to HK$1,987,176,000 in 2021[25]. - Equity attributable to the owners of the company decreased by 21.9% to HK$1,925,052,000 from HK$2,464,578,000 in 2021[25]. - Basic earnings per share fell by 97.4% to 8.71 HK cents from 337.58 HK cents in 2021[25]. - Total dividend per share was reduced by 67.2% to 2.0 HK cents from 6.1 HK cents in the previous year[25]. - The dividend payout ratio increased significantly to 23.0% from 1.8% in 2021[25]. - The Group's net current assets were HK$1,530,000, a significant decline from HK$40,740,000 in 2021[40]. - The Group's investment portfolio decreased to approximately HK$554,751,000 from HK$1,043,464,000 in 2021[135]. - The effective tax rate increased significantly by 32.1 percentage points to 32.6% for the Reporting Year[129]. Research and Development - The company has a diverse product portfolio including proprietary and licensed-in products across various markets[21][22]. - New product developments and market expansions are ongoing, focusing on therapeutic areas such as oncology and infectious diseases[21][22]. - Research and development efforts resulted in 7 ANDA and IDL approvals from NMPA, which are expected to drive future sales growth[45]. - The NDA for Adasuve® and ANDA applications for Epinastine Hydrochloride tablet and Apremilast tablet are currently under review by the CDE[73]. - The Group obtained 7 ANDA and IDL approvals from the NMPA during the reporting year[81]. Market Strategy and Expansion - The mission is to become a successful biopharmaceutical group in Asia, providing innovative products to improve health and quality of life[16]. - The company aims to expand its market presence and product portfolio through strategic partnerships and R&D initiatives[14]. - The Group is actively pursuing strategies for market expansion and potential acquisitions to enhance its product offerings[21][22]. - The Group's rare disease drugs, including Treprostinil Injection and Teglutik®, have been included in the updated NRDL, expanding patient access to these treatments[162]. - The Group's Fondaparinux Sodium was selected in the seventh-round VBP program, broadening its patient reach[104]. Cost Management and Efficiency - The Group remains committed to improving financial position through cost-saving measures while maintaining quality[52]. - The Group plans to implement cost control measures and enhance efficiency in sales and R&D to improve profitability and sustainability[163]. - The Group's administrative expenses were HK$198,413,000, a decrease of 33.3% compared to the previous year, reflecting efficient operations and cost-saving measures[67]. Leadership and Management - The Group's Chief Financial Officer, Chow Yiu Ming, has over 25 years of experience in accounting, auditing, financial management, and corporate finance[184]. - Dr. Li Xiaoyi, the founder of the Group, was responsible for daily operations and R&D from 1994 until April 2021, now serving as a non-executive director and senior adviser[172]. - The independent non-executive director, Dr. Chan Yau Ching, has extensive experience in corporate development and financial management of high-growth companies[177]. - The Group's management team includes professionals with advanced degrees, such as PhDs in relevant fields, enhancing the company's expertise in pharmaceuticals[172][183]. - The Group has been expanding its board with experienced individuals from various sectors, including private equity and healthcare management[173][175]. Employee and Organizational Changes - The Group had 1,102 employees as of December 31, 2022, a decrease from 1,321 employees in the previous year[151]. - The Group adopts a conservative treasury policy to manage liquidity and credit risks effectively[147]. - The Group believes it has adequate financial resources to meet future operational and development needs[145]. Product Development and Approval - Three new commercialized products, Treprostinil Injection, Teglutik®, and Trittico®, were added to the updated NRDL in January 2023, expected to enhance demand and sales[51]. - The expiration of the licensing agreement for Carnitene® significantly impacted the Group's revenue during the Reporting Year[57]. - The Group successfully included three newly commercialized products in the latest medical insurance drug list, expected to enhance demand and sales[54].

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佈的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈 全部或任何部份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。 Lee’s Pharmaceutical Holdings Limited 李 氏 大 藥 廠 控 股 有 限 公 司 * （於開曼群島註冊成立之有限公司） （股份代號：950） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 全 年 業 績 公 佈 財務摘要 截至十二月三十一日止年度 二零二二年 二零二一年 變動 千港元 千港元 收益 1,233,148 1,266,157 -2.6% 毛利 770,755 806,284 -4.4% 本公司擁有人應佔溢利 51,284 1,987,176 -97.4% 港仙 港仙 ...

Revenue and Sales Performance - The Group's revenue for the first nine months of 2022 totaled HK$1,036,182,000, an increase of 8.8% compared to HK$952,387,000 in the same period of 2021[7] - Third-quarter 2022 revenue was HK$387,016,000, reflecting a 5.1% increase year-over-year and a sequential increase of 19.3% over the second quarter of 2022[7] - Sales of newly launched BredininTM grew by 293.5%, contributing significantly to the overall sales growth, alongside Treprostinil Injection and Yallaferon® which grew by 30.8% and 3.1%, respectively[7] - Sales of licensed-in products accounted for 61.7% of the Group's revenue in the first nine months of 2022, up from 58.5% in the same period of 2021[8] - Revenue for the three months ended September 30, 2022, was HK$387,016,000, a decrease of 0.6% compared to HK$368,335,000 for the same period in 2021[88] - Proprietary and generic products generated revenue of HK$144,946,000 for the three months ended September 30, 2022, down 0.6% from HK$145,766,000 in 2021[91] - Licensed-in products revenue increased to HK$242,070,000 for the three months ended September 30, 2022, up 8.8% from HK$222,569,000 in 2021[91] - More than 90% of the Group's revenue was derived from activities conducted in the People's Republic of China during the reporting periods[92] Profitability and Expenses - Gross profit for the first nine months of 2022 was HK$661,801,000, a 4.3% increase from HK$634,796,000 in the same period last year[12] - The gross profit margin for the first nine months of 2022 was 63.9%, down 2.8 percentage points from 66.7% in the prior year[12] - Net profit attributable to the owners of the Company in the first nine months of 2022 was HK$62,684,000, a decrease of 97.1% compared to the same period in 2021, primarily due to the absence of one-off gains and losses from previous years[18] - The overall profit attributable to the company's owners for the first nine months of 2022 was HKD 62,684,000, a decrease of 97.1% compared to the same period in 2021, primarily due to the absence of one-time gains and losses from previous years[20] - Profit for the period attributable to owners of the Company for the three months ended September 30, 2022, was HK$34,224,000, compared to HK$13,843,000 in 2021, reflecting a significant increase of 147.5%[59] - The company reported a gross profit margin of approximately 62.5% for the three months ended September 30, 2022, compared to 67.2% in the same period of 2021[59] - Total comprehensive expense for the period was HK$241,210,000 for the three months ended September 30, 2022, compared to HK$581,889,000 in 2021, indicating a reduction of 58.6%[63] Research and Development - Research and development expenses totaled HK$293,795,000 in the first nine months of 2022, a decrease of 14.9% compared to HK$345,218,000 in the same period of 2021, representing 28.4% of revenue[13] - Research and development expenses for the three months ended September 30, 2022, were HK$50,263,000, down from HK$67,549,000 in 2021, a decrease of 25.6%[59] - The group has over 40 projects in its pipeline, ranging from early to late-stage development[26] - The group is developing several assets in major therapeutic areas, including cardiovascular and oncology, with late-stage programs such as Cetraxal® Plus and Intrarosa®[29][31] - The group has completed three pivotal registration batches of oral cytotoxic drugs in its specialized workshop[25] Regulatory Approvals and Product Launches - The group obtained 7 ANDA and Import Drug License approvals from China's National Medical Products Administration during the review period[34] - Zingo® received its Drug Registration Certificate from the NMPA on March 1, 2022, and is indicated for local analgesia prior to venipuncture in children and adults[35] - INOmax® was approved by the NMPA on March 8, 2022, for the treatment of hypoxic respiratory failure associated with pulmonary hypertension in infants[37] - High-concentration Carboprost injection received drug registration approval on March 9, 2022, with a specification of 50 mg in a 20 ml vial[40] - Natulan® (Procarbazine Hydrochloride Capsules) obtained drug registration approval on April 21, 2022, for treating Hodgkin's lymphoma in adults[42] - Teglutik® (Riluzole Oral Suspension) received drug registration approval on May 31, 2022, to prolong life in ALS patients[42] Corporate Strategy and Future Outlook - The Group launched its flagship online stores on Alibaba.com and JD.com in March 2022 to enhance brand awareness and expand sales channels[17] - The Group plans to sell 100% equity interest in Guangzhou Zhaokang Hospital for RMB 200 million (approximately HK$ 226 million) as part of its corporate development strategy[47] - The Group anticipates continued pressure on drug prices due to external factors such as the COVID pandemic and rising inflation, impacting the pharmaceutical industry[51] - The expiration of the licensing agreement for Carnitene® marks a new era for the Group, which will focus on developing domestic generic versions to maintain competitiveness[52] - The Group has implemented measures to enhance efficiency across the value chain, particularly in sales and R&D, to adapt to the "new normal"[55] - The Group aims to adopt prudent business strategies to strengthen its foundation and drive growth, ultimately creating more value for shareholders and customers[56] Financial Position and Dividends - The total assets reported as of September 30, 2022, were 3,710,088[72] - Capital commitments as of 30 September 2022 amounted to HK$227,368,000, a decrease from HK$249,848,000 as of 31 December 2021[122] - The Company reported no purchases, sales, or redemptions of its listed securities during the nine months ended 30 September 2022[124] - Total compensation for key management personnel during the reporting period was HK$24,748,000, a decrease from HK$65,647,000 in the previous year[116] - An interim dividend of HK$0.010 per share was declared for the six months ended 30 June 2022, totaling approximately HK$5,888,000, down from HK$0.030 per share totaling HK$17,665,000 in the previous year[103] - The Company does not recommend the payment of any interim dividend for the nine months ended 30 September 2022, compared to no dividend in the same period of 2021[125]

Revenue and Sales Performance - The Group's revenue for the first half of 2022 totaled HK$649,166,000, representing an increase of 11.1% compared to HK$584,052,000 in the same period of 2021[7]. - The second-quarter 2022 revenue was HK$324,416,000, up 7.8% from HK$300,910,000 in the prior-year quarter[7]. - Sales of newly launched Bredinin™ increased by 48.9%, while Treprostinil Injection and Yallaferon® grew by 4.7% in the first half of 2022[7]. - The sales of licensed-in products accounted for 61.2% of the Group's revenue in the first half of 2022, up from 57.3% in the same period of 2021[8]. Profitability and Expenses - Gross profit for the first half of 2022 was HK$419,478,000, an increase of 8.5% from HK$386,546,000 in the same period last year[11]. - The overall gross profit margin decreased to 64.6% from 66.2% in the first half of 2021 due to a higher proportion of revenue from licensed-in products[11]. - Research and development expenses totaled HK$206,517,000, a decrease of 14.0% compared to HK$240,043,000 in the first half of 2021, representing 31.8% of the corresponding revenue[12]. - Selling and distribution expenses increased by 7.4% to HK$176,215,000 in the first half of 2022, with a selling expenses to revenue ratio of 27.1%[16]. - Net profit attributable to the owners of the Company was HK$28,460,000, a decrease of 98.7% compared to the same period in 2021, primarily due to the absence of one-off gains and losses from previous years[17]. - Other losses (net) for the first half of 2022 amounted to HK$5,227,000, a significant turnaround from other gains (net) of HK$2,093,266,000 in the first half of 2021, primarily due to the absence of a one-off gain of approximately HK$2.32 billion[56]. Research and Development - The Group has over 40 projects in its pipeline, with applications for New Drug Applications (NDA) and Abbreviated New Drug Applications (ANDA) under review by the Centre for Drug Evaluation (CDE)[23]. - Major therapeutic areas under development include cardiovascular, women's health, pediatrics, rare diseases, dermatology, and obstetrics, with late-stage programs such as Cetraxal® Plus and Intrarosa® progressing well[26]. - The oncology pipeline includes 10 assets, with several in advanced clinical trial stages, including Socazolimab for recurrent cervical cancer and small cell lung cancer[27]. - Research and development expenses for the first half of 2022 amounted to HK$116,590,000, an increase of 3.3% compared to HK$112,899,000 in the same period last year, representing 18.0% of the Group's revenue, down from 19.3%[62]. Product Development and Approvals - The Group obtained 6 ANDA and IDL approvals from the National Medical Products Administration (NMPA) during the review period[31]. - Zingo® received its Drug Registration Certificate from the NMPA on March 1, 2022, providing local analgesia for children and adults[32]. - INOmax® was approved by the NMPA on March 8, 2022, for treating hypoxic respiratory failure in infants[34]. - High Concentration Treprostinil Injection received its Drug Registration Certificate from the NMPA on March 9, 2022[37]. - The Group has obtained Drug Registration Certificates for Natulan® and Teglutik®, expanding its product offerings in the oncology and neurology sectors[40][42]. Strategic Initiatives and Future Outlook - The Group launched its flagship online stores on Alibaba.com and JD.com in March 2022 to enhance brand awareness and expand sales channels[16]. - The Group anticipates that more products will enter the volume-based procurement (VBP) program in China, which is expected to provide additional revenue streams[51]. - The Group has six newly approved products during the review period and expects two more NDA approvals by the end of 2022, which will contribute to new revenue sources[51]. - The company plans to expand its market presence with new product launches and technology developments in the upcoming fiscal periods[92]. - The company is focusing on strategic acquisitions to enhance its market position and drive future growth[92]. - The company is committed to improving operational efficiency and reducing costs to enhance profitability in the coming years[92]. Financial Position and Employee Information - As of June 30, 2022, the total balance of other payables and accruals was HK$676,710,000, down from HK$724,670,000 as of December 31, 2021, primarily due to the settlement of accruals[68]. - The group's current ratio as of June 30, 2022, was 1.04, unchanged from December 31, 2021, indicating stable liquidity[69]. - The net cash position as of June 30, 2022, was HK$147,543,000, significantly up from HK$30,899,000 as of December 31, 2021[70]. - Total employee remuneration for the period under review was approximately HK$200.9 million, compared to HK$180.3 million for the six months ended June 30, 2021[79]. - The group had 1,182 employees as of June 30, 2022, a decrease from 1,319 employees as of December 31, 2021[78]. - The group has no pledge of assets as of June 30, 2022, indicating a strong asset position[77]. - The group believes it has adequate financial resources to meet its operational and development requirements in the future[73].

Financial Performance - The Group's revenue for Q1 2022 was HK$324,750,000, representing a 14.7% increase compared to HK$283,142,000 in Q1 2021[4]. - The gross profit for Q1 2022 was HK$215,826,000, with a gross profit margin of 66.5%, a decrease of 1.5 percentage points from 68.0% in Q1 2021[4]. - Net profit attributable to the owners of the Company in Q1 2022 was HK$20,307,000, a decrease of 50.5% compared to the same quarter in 2021[11]. - For the three months ended March 31, 2022, the revenue was HK$324,750,000, an increase from HK$283,142,000 in the same period of 2021, representing a growth of approximately 14.7%[42]. - Profit for the period decreased to HK$20,665,000 from HK$36,356,000 year-over-year, reflecting a decline of approximately 43.3%[44]. - Basic earnings per share for Q1 2022 was HK$3.45, down from HK$6.98 in Q1 2021, a decrease of about 50.6%[42]. - The total comprehensive expense for the period was HK$304,203,000, compared to HK$61,956,000 in the previous year, indicating a significant increase in expenses[44]. - The operating profit for the period was HK$35,503,000, down from HK$47,366,000 in the previous year, reflecting a decline of approximately 25.1%[42]. - The total comprehensive expense for the period was HK$53,047, highlighting the financial challenges faced during this timeframe[51]. - The total interest income for the Group was HK$24,621,000, down from HK$31,581,000 in the same period of 2021[80]. - The Group's taxation for the three months ended 31 March 2022 amounted to HK$12,846,000, compared to HK$7,475,000 in the same period of 2021[84]. Revenue Composition - Sales from licensed-in products accounted for 61.8% of total revenue in Q1 2022, up from 55.6% in Q1 2021, while proprietary and generic products contributed 38.2%, down from 44.4%[4]. - Revenue from proprietary and generic products was HK$124,020,000, while revenue from licensed-in products was HK$200,730,000, indicating a significant contribution from licensed-in products[74]. - More than 90% of the Group's revenue was derived from activities conducted in the People's Republic of China (PRC) during the reporting period[76]. Research and Development - R&D expenses totaled HK$103,801,000 in Q1 2022, representing 32.0% of quarterly revenue, compared to 27.0% in Q1 2021[6]. - The Group aims to optimize resource allocation among prioritized R&D projects while keeping expenditures within revenue limits for the fiscal year ending December 2022[6]. - The Group has over 40 projects in its pipeline, ranging from early to late-stage development, with several applications under review by the Centre for Drug Evaluation (CDE) and the National Medical Products Administration (NMPA) for various drugs[15][17][21][24]. - The oncology pipeline includes 10 assets, with 6 innovative and 4 generics, focusing on immuno-oncology, including Socazolimab in various clinical trial stages for cervical cancer and small cell lung cancer[20][23]. Product Approvals and Developments - The Group obtained 4 ANDA and IDL approvals from NMPA during the quarter[21][24]. - Zingo® received its Drug Registration Certificate on March 1, 2022, for use in local analgesia prior to venipuncture in children and adults[22][25]. - INOmax® was approved on March 8, 2022, for treating hypoxic respiratory failure associated with pulmonary hypertension in infants[27][30]. - High Concentration Treprostinil Injection received approval on March 9, 2022, with a specification of 20ml: 50mg[28][31]. - Natulan® was approved on April 21, 2022, for use in combination with chemotherapy to treat Hodgkin's lymphoma in adults[29][32]. - The Group anticipates more NDA approvals in 2022, including Teglutik® for Amyotrophic Lateral Sclerosis (ALS) and Nadroparin Calcium Injection[34][36]. Strategic Initiatives - The Group launched flagship online stores on Alibaba.com and JD.com in March 2022 to enhance brand awareness and expand sales channels[7]. - The Group is focusing on efficiency across the value chain, particularly in sales and R&D, to adapt to the new normal[35]. - The company is focusing on optimizing its product portfolio to create development opportunities amid a challenging regulatory environment[38]. - The company has implemented measures to adapt to the "new normal," emphasizing efficiency in key processes such as sales and R&D[38]. Financial Position and Investments - The total retained profits stood at HK$2,100,295, indicating a strong accumulation of earnings over time[51]. - The total share capital was reported at HK$5,000, indicating a stable equity base[51]. - The company has a significant investment in financial assets, with fair value changes impacting overall financial performance[51]. - Capital commitments for intangible assets (license fee and development cost) amounted to HK$36,730,000, while property, plant, and equipment commitments were HK$143,945,000, totaling HK$266,949,000[114]. Corporate Governance and Compliance - The company has applied new amendments to HKFRS for the first time, which are effective for annual periods beginning on or after January 1, 2022, without material impact on reported amounts[63]. - The unaudited condensed consolidated financial statements were prepared in accordance with Hong Kong Accounting Standards, ensuring compliance with local regulations[54]. - The company has not early adopted new HKFRS amendments that are issued but not yet effective, indicating a cautious approach to accounting changes[68]. - The Board does not recommend payment of dividends for the three months ended 31 March 2022, consistent with the previous year[115].