(Incorporated in the Cayman Islands with limited liability) 2022 INTERIM REPORT (於開曼群島註冊成立之有限公司) 2022 中期報告 目錄 2 公司資料 3 管理層討論及分析 11 企業管治及其他資料 16 未經審核簡明綜合中期損益表 17 未經審核簡明綜合中期其他全面收益表 18 未經審核簡明綜合中期財務狀況表 20 未經審核簡明綜合中期權益變動表 21 未經審核簡明綜合中期現金流量表 22 未經審核簡明綜合中期財務報表附註 公司資料 | --- | --- | |-----------------------------------------|----------------------------------------| | | | | 董事會及委員會 | 香港主要營業地點 | | 執行董事 | 香港 | | 吳鐵先生 （主席兼行政總裁） | 上環 | | 錢余女士 | 威靈頓街 198 號 | | 吳為忠先生（於 2022 年 8 月 24 日辭任） | 威靈頓大廈 28 樓 | | 非執行董事 | 中國主要營業地點及 ...

Financial Performance - The total revenue from continuing operations increased by RMB 5 million to RMB 226.7 million in 2021, compared to RMB 221.7 million in 2020, representing a growth of 2.3%[8] - The loss for the year was RMB 151.3 million, a decrease of 20.9% from the loss of RMB 191.3 million in 2020[8] - Revenue from the proprietary product segment increased by RMB 5 million or 2.3% to RMB 226.7 million, with the main product, Shusi, generating RMB 190.4 million, up RMB 8.6 million or 4.7%[12] - The sales of Zhuoao decreased by RMB 6 million or 26.8% to RMB 16.4 million due to price adjustments and a decline in sales volume[12] - Gross profit increased by RMB 10.6 million to RMB 145.5 million for the year ended December 31, 2021, compared to RMB 134.9 million in 2020, with a gross margin rise of 3.4 percentage points to 64.2%[18] - Operating expenses rose by RMB 105.0 million or 65.5% to RMB 265.3 million for the year ended December 31, 2021, compared to RMB 160.3 million in 2020[19] - The company recorded an operating loss of RMB 119.8 million for the year ended December 31, 2021, compared to an operating loss of RMB 25.4 million in 2020[19] - Financing costs increased by RMB 2.3 million or 2.7% to RMB 88.8 million for the year ended December 31, 2021, compared to RMB 86.5 million in 2020[21] - The company reported a loss attributable to equity holders of RMB 149.5 million for the year ended December 31, 2021, an improvement from a loss of RMB 357.6 million in 2020[23] Debt and Financial Position - Total debt decreased to RMB 832.1 million as of December 31, 2021, from RMB 910.6 million as of December 31, 2020[34] - The debt-to-asset ratio increased to 87.1% as of December 31, 2021, compared to 70.3% as of December 31, 2020[34] - Capital expenditures decreased by RMB 3.1 million or 83.8% to RMB 0.6 million for the year ended December 31, 2021, compared to RMB 3.7 million in 2020[24] - The company faced a foreign exchange gain of RMB 6.7 million for the year ended December 31, 2021, down from RMB 16.1 million in 2020[27] - The company had no bank deposits pledged as collateral as of December 31, 2021, compared to RMB 25.5 million in 2020[35] Strategic Initiatives and Future Plans - The company plans to enhance operational efficiency and develop new products and services in response to market changes[13] - The company is actively negotiating with banks and financial institutions to extend overdue loans and waive certain covenants[51] - The company plans to accelerate the sale of properties, plants, and equipment to reduce debt, with ongoing negotiations for sale agreements with independent third parties[51] - The board aims to complete the outlined measures before the end of the fiscal year ending December 31, 2022[52] - The company is exploring new financing sources or strategic capital investments to improve liquidity[51] Corporate Governance - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, with independent non-executive directors accounting for more than one-third of the board[71] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules and has complied with all applicable provisions for the year ending December 31, 2021[70] - The board believes that having the same individual serve as both chairman and CEO provides strong and consistent leadership, beneficial for business management and development[70] - The board has confirmed that all directors have complied with the standards set out in the code for securities trading throughout the year ending December 31, 2021[73] - The company has received annual confirmations of independence from all current independent non-executive directors, affirming their independence as per the listing rules[74] Risk Management and Internal Controls - The board is responsible for maintaining an appropriate risk management and internal control system, which was reviewed for effectiveness in 2021[121] - The internal audit covers various internal procedures and policies, including financial, operational, and compliance controls, and is subject to annual approval by the audit committee[120] - The audit committee reviews the effectiveness of the company’s risk management and internal control systems annually, ensuring adequate resources and training for staff involved in financial reporting[121] - The company has not identified any significant internal control deficiencies or serious violations of risk management policies[122] Environmental, Social, and Governance (ESG) Initiatives - The company has implemented various initiatives in environmental, social, and governance (ESG) areas, demonstrating its commitment to sustainable development[152] - The group has set environmental goals focusing on energy conservation and waste management to align with national carbon neutrality vision[154] - The total greenhouse gas emissions for the year amounted to approximately 7,205.51 tons of CO2 equivalent, with a density of 31.78 tons of CO2 equivalent per million RMB in sales[178] - The company has established a series of environmental protection measures to actively reduce pollution generated during operations[171] - The company aims to promote energy conservation and reduce greenhouse gas emissions through visible campaigns in offices and factories[180]

IN (於開曼群島註冊成立之有限公司) ⚥劍㜡デ 2021 目錄 2 公司資料 3 管理層討論及分析 9 企業管治及其他資料 14 未經審核簡明綜合中期損益表 15 未經審核簡明綜合中期其他全面收益表 16 未經審核簡明綜合中期財務狀況表 18 未經審核簡明綜合中期權益變動表 19 未經審核簡明綜合中期現金流量表 20 未經審核簡明綜合中期財務報表附註 公司資料 | --- | --- | |----------------------------------------------------------|-------------------------------------------------------------------| | | | | 董事會及委員會 | 香港主要營業地點 | | 執行董事 吳鐵先生 （主席兼行政總裁） 錢余女士 吳為忠先生 | 香港 上環 威靈頓街 198 號 威靈頓大廈 28 樓 | | | 中國主要營業地點及總部 | | 非執行董事 錢唯博士 | 中國蘇州市 | | 獨立非執行董事 | 蘇州工業園區 | | 余梓山先生 | 華凌街 1 號 | | 趙玉彪博士 潘飛 ...

Financial Performance - The overall revenue from continuing operations for the year ended December 31, 2020, increased by RMB 68.2 million to RMB 221.7 million, compared to RMB 153.5 million for the corresponding period in 2019[11]. - Operating loss from continuing operations for the year ended December 31, 2020, decreased by RMB 137 million to RMB 113.8 million, compared to an operating loss of RMB 250.8 million for the corresponding period in 2019[11]. - The Group recorded a loss of RMB 191.3 million for the year ended December 31, 2020, representing a decrease of 46.1% year on year compared to a loss of RMB 355.1 million for the corresponding period in 2019[11]. - In 2020, the Group's revenue was RMB 221.7 million, representing an increase of 44.4% compared to RMB 153.5 million in 2019[22]. - The increase in revenue was mainly due to changes in industry policies, sales model, and pricing, as well as the impact of COVID-19 on sales[22]. - Revenue from proprietary products increased by RMB 68.2 million to RMB 221.7 million, accounting for 100% of total revenue in the year under review, compared to RMB 153.5 million in the corresponding period in 2019[42]. - Revenue from Shusi increased by RMB 75.7 million or 71.3% to RMB 181.8 million for the year under review, compared to RMB 106.1 million for the corresponding period in 2019[31]. - Revenue from Zhuo'ao decreased by RMB 2.9 million or 11.5% to RMB 22.4 million for the year under review, compared to RMB 25.3 million for the corresponding period in 2019[31]. Assets and Liabilities - Total non-current assets as of December 31, 2020, were RMB 718.1 million, down from RMB 1,488.9 million in 2019[7]. - Total current assets as of December 31, 2020, increased to RMB 480.9 million from RMB 309.3 million in 2019[7]. - Total current liabilities as of December 31, 2020, decreased to RMB 1,101.8 million from RMB 1,625.5 million in 2019[7]. - Net current liabilities improved to RMB (579.5) million as of December 31, 2020, compared to RMB (1,316.2) million in 2019[7]. - As of 31 December 2020, the Group's total debt was RMB 910.6 million, a decrease from RMB 1,475.7 million in 2019[82]. - The Group's debt-to-assets ratio improved to 70.3% as of December 31, 2020, down from 82.1% in 2019[82]. - Bank borrowings from PRC banks amounted to approximately RMB 464.9 million as of December 31, 2020, down from RMB 791.5 million in 2019[77]. - The Group had other borrowings of RMB 355.3 million as of December 31, 2020, compared to RMB 231.0 million in 2019[78]. Operational Highlights - The Group owns two new National Class 1 drugs and a well-known international innovative brand-name drug, along with several generic drugs[10]. - The sales network covers nearly 10,000 hospitals across the People's Republic of China[10]. - The Group has approximately 1,000 sales professionals and R&D specialists supporting its operations[10]. - The Group faced significant liquidity pressure, limiting its ability to invest in marketing promotions for Xi Di Ke during the review period[27]. - The Group aims to complete clinical trial phases II and III for its new MDS products to obtain necessary approvals from the National Medical Products Administration[28]. Management and Strategy - The management remains optimistic about opportunities in the pharmaceutical market due to increasing demand driven by an aging population and rising health awareness following the COVID-19 pandemic[36]. - The Group is committed to pursuing strategic initiatives to enhance revenue and profitability in the long run despite the challenges posed by the COVID-19 pandemic and regulatory changes[37]. - The management plans to adopt flexible strategies to respond to market changes and maintain financial flexibility amid uncertainties related to the COVID-19 pandemic[37]. - The Group plans to explore partnerships and joint ventures to optimize its asset portfolio and improve financial conditions[19]. Governance and Leadership - The Group has a strong leadership team with diverse backgrounds in pharmaceuticals, engineering, and academia, enhancing its operational capabilities[120]. - The company is focused on expanding its market presence and enhancing its product offerings through strategic management and innovation[124]. - The Group's Board is committed to maintaining high standards of corporate governance to enhance transparency and accountability to shareholders and stakeholders[135]. - The Company has complied with all applicable code provisions in the Corporate Governance Code throughout the year ended December 31, 2020, except for the separation of roles between chairman and chief executive officer[136]. - The Board consists of three executive directors, one non-executive director, and three independent non-executive directors, with independent non-executive directors representing more than one-third of the Board, ensuring their views carry significant weight[141]. Remuneration and Performance - The remuneration policy for Directors is based on skills, knowledge, Company performance, industry benchmarks, and prevailing market conditions[193]. - For the year ended December 31, 2020, three senior management individuals received remuneration in the range of 0 – 1,000,000 RMB, two in the range of 1,000,001 – 2,000,000 RMB, and one in the range of 2,000,001 – 3,000,000 RMB[200]. - The Company aims to attract, retain, and motivate a high-caliber team through its remuneration policy[193]. - The Remuneration Committee's primary functions include evaluating performance and making recommendations on remuneration packages for Directors and senior management[192].

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 89,436,000, a decrease of 4.9% compared to RMB 94,023,000 for the same period in 2019[47]. - Gross profit for the same period was RMB 56,698,000, down 7.4% from RMB 61,237,000 in 2019[47]. - Loss from operations was RMB 21,452,000, showing an improvement of 3.8% compared to a loss of RMB 22,300,000 in the previous year[47]. - The loss for the period increased to RMB 48,499,000, which is 9.0% higher than the loss of RMB 44,477,000 in 2019[47]. - Loss attributable to equity holders from continuing operations was RMB 46,745,000, compared to RMB 43,426,000 in the prior year, reflecting a 7.6% increase[47]. - Basic and diluted loss per share from continuing operations was RMB (4.37), a significant decline from earnings of RMB 0.28 in the same period last year, representing a decrease of 1,660.7%[47]. - Basic loss per share from continuing operations was RMB (2.45), slightly improved from RMB (2.60) in 2019, indicating a 5.8% improvement[47]. - The Group recorded a net loss of RMB 48.5 million, representing a year-on-year increase of 9.0% from a net loss of RMB 44.5 million in the corresponding period of 2019[50][58]. - Total revenue from proprietary products decreased by RMB 4.6 million or 4.9% to RMB 89.4 million for the six months ended 30 June 2020, compared to RMB 94.0 million for the corresponding period in 2019[67]. - Revenue from Shusi decreased by RMB 4.2 million or 5.7% to RMB 69.6 million for the Period Under Review, compared to RMB 73.8 million for the corresponding period in 2019[67]. - Revenue from Zhuo'ao decreased by RMB 0.9 million or 7.1% to RMB 11.7 million, compared to RMB 12.6 million for the corresponding period in 2019[67]. Operational Challenges - The outbreak of COVID-19 significantly impacted sales, particularly from March to May 2020, leading to a sharp decline in outpatient and ward numbers[55][56]. - The decrease in sales was attributed to changes in industry policies, a shift in sales model, and the impact of COVID-19 on sales volume[58][59]. - The Chinese economy contracted by 6.8% in the first quarter of 2020, marking the first decline since 1992, yet the pharmaceutical industry maintained growth momentum[55][56]. - The Group is focusing on adjusting its sales model and tightening cost control to improve financial conditions amid challenging economic conditions[50][58]. Strategic Initiatives - The company continues to focus on improving operational efficiency and reducing losses in the upcoming periods[47]. - Future strategies may include market expansion and potential new product development to enhance revenue streams[47]. - The management is committed to pursuing strategic initiatives to lay a stronger foundation for sustainable growth in revenue and profitability[77]. - The Group will adopt flexible strategies to respond to market changes and maintain financial flexibility amid uncertainties from the COVID-19 epidemic[78]. - The Group's manufacturing segment has shown positive progress, reflecting the effectiveness of strategic initiatives taken[77]. Financial Management - The Group's financial flexibility is being maintained despite the challenges posed by the pandemic[80]. - The Group's capital management aims to maintain its ability to provide returns for shareholders while managing its capital structure based on economic conditions and future capital requirements[111]. - The Group does not currently employ any financial instruments to hedge against foreign exchange or interest rate risks[117][115]. - As of June 30, 2020, total debt was RMB 1,435.7 million, a decrease from RMB 1,475.7 million as of December 31, 2019[119]. - Bank borrowings as of June 30, 2020, were approximately RMB 745.4 million, down from RMB 791.5 million at the end of 2019[122]. - The gearing ratio increased significantly to 190.8% as of June 30, 2020, compared to 82.1% as of December 31, 2019[127]. Shareholder Information - The Group raised net proceeds of approximately HK$ 11.0 million from the bond issuance, with 20% allocated to general working capital and 80% for repayment of existing debts[137]. - The company issued up to 325,000,000 redeemable convertible preference shares (CPS) at a price of HK$1.83 per CPS, representing a premium of approximately 6.40% to the closing price of HK$1.72 per share on the date of the CPS Placing Agreement[143]. - A total of 294,659,500 CPSs were successfully placed to not less than six independent professional, institutional, or other investors[143]. - The net proceeds from the issuance of CPS were fully utilized for general working capital, repayment of existing debts, and business development[143]. Corporate Governance - The Company has complied with all applicable code provisions in the Corporate Governance Code throughout the six months ended June 30, 2020[185]. - The Board currently comprises three executive Directors, one non-executive Director, and three independent non-executive Directors, with independent non-executive Directors representing more than one-third of the Board members[190]. - The roles of chairman and chief executive officer are held by the same individual, Mr. Ng Tit, which the Board believes provides strong leadership[186]. - The Audit Committee, comprising independent non-executive Directors, reviewed the unaudited interim results for the six months ended June 30, 2020, and recommended their adoption by the Board[197].

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 186.1 million, a decrease of 40.4% compared to RMB 312.0 million in the same period of 2018[17]. - Gross profit for the same period was RMB 133.9 million, down 44.5% from RMB 241.1 million in 2018[18]. - Operating profit decreased by 76.3% to RMB 3.7 million, compared to RMB 142.5 million in the prior year[19]. - Net profit for the period was RMB 3.7 million, representing a significant decline of 95.6% from RMB 84.3 million in 2018[20]. - Basic earnings per share from continuing operations dropped to RMB 0.28, a decrease of 94.7% from RMB 5.28 in the previous year[27]. - The Group's total revenue from continuing operations decreased by RMB 125.9 million to RMB 186.1 million for the six months ended June 30, 2019, compared to RMB 312.0 million for the same period in 2018, reflecting a decline of approximately 40.4%[39]. - Operating profit from continuing operations fell by RMB 102.2 million to RMB 3.7 million for the same period, down from RMB 105.9 million in 2018, representing a decrease of about 96.5%[39]. - Net profit for the period was RMB 3.7 million, a significant drop of 95.6% compared to RMB 84.3 million in the same period of 2018[39]. - Revenue from proprietary products manufacturing and sales decreased by RMB66.0 million or 41.3% to RMB94.0 million for the six months ended June 30, 2019, compared to RMB160.0 million in the same period of 2018[60]. - Revenue from proprietary products decreased by RMB66.0 million to RMB94.0 million, accounting for 50.5% of total revenue, compared to RMB160.0 million or 51.3% in the same period of 2018[78]. Cost and Expenses - Cost of sales decreased by RMB18.7 million to RMB52.2 million, compared to RMB70.8 million in the same period of 2018, primarily due to lower costs for Shusi and Zhuo'ao[80]. - The Group's total costs on remuneration, welfare, and social security amounted to RMB49.7 million for the period ended June 30, 2019, down from RMB78.5 million in the same period of 2018[64]. - Operating expenses decreased by RMB 8.5 million or 11.6% to RMB 64.8 million for the six months ended June 30, 2019, compared to RMB 73.3 million in the same period of 2018[88]. - Sales cost decreased by RMB 18.7 million to RMB 52.2 million for the six months ended June 30, 2019, compared to RMB 70.8 million in the same period of 2018, primarily due to a decline in sales costs of Shusi and Zhuo'ao[82]. Market and Product Development - The overall revenue decline was attributed to price drops across various products due to industrial policy changes[37]. - The Group's orthopedic product Miacalcic has been sold in 32 provinces and 36 first-tier cities across China, as well as in 12 overseas countries, establishing a solid foundation for its orthopedic business[47]. - Shusi, the Group's first self-developed atypical antipsychotic drug, has been widely recognized in the market and is positioned to enhance brand awareness and market penetration through targeted sales strategies[42]. - The Group entered into a cooperation agreement with Pfenex Inc. to jointly develop teriparatide products, with exclusive commercialization rights in five countries/regions, including the PRC[52]. - Teriparatide is the first and only FDA-approved drug for osteoporosis treatment, aimed at stimulating bone formation and improving bone quality, which aligns with the Group's strategy to enhance its orthopedic product offerings[53]. - The Group aims to provide better-quality drugs to patients and reinforce its market position in the orthopedic area, particularly in light of the increasing prevalence of osteoporosis[53]. - The Group is focusing on strengthening its biotechnological research platform while actively adjusting its sales channels for orthopedic and psychiatric drug markets[41]. - The Group aims to focus on psychiatric and orthopedic products, particularly promoting Shusi and Miacalcic, to drive sales growth[70]. Financial Position and Debt Management - As of June 30, 2019, total debt amounted to RMB 1,363,663,000, a decrease from RMB 1,411,632,000 as of December 31, 2018, representing a reduction of approximately 3.4%[112]. - The debt-to-assets ratio improved to 58.2% as of June 30, 2019, compared to 63.4% as of December 31, 2018, indicating enhanced financial stability[118]. - The Group's bank borrowings were approximately RMB 852.3 million as of June 30, 2019, slightly down from RMB 859.3 million as of December 31, 2018[114]. - Other borrowings totaled RMB 106.3 million as of June 30, 2019, down from RMB 151.3 million in the previous period, reflecting a decrease of about 29.8%[114]. - The Group's bank deposits pledged to secure loans increased to RMB 78.0 million as of June 30, 2019, from RMB 38.0 million as of December 31, 2018[119]. - The Group's debt/assets ratio is closely monitored, defined as total borrowings divided by total assets[102]. Corporate Governance and Shareholder Information - The Board comprises four executive Directors, two non-executive Directors, and three independent non-executive Directors, with independent non-executive Directors representing one-third of the Board members[191]. - The Company has complied with all applicable code provisions in the Corporate Governance Code throughout the six months ended June 30, 2019, except for the deviation from code provision A.2.1[187]. - The Company is committed to high standards of corporate governance and has adopted the relevant best practices[187]. - The roles of chairman and chief executive officer are held by the same individual, Mr. Ng Tit, with clearly defined responsibilities[187]. - The company has a significant concentration of ownership among its substantial shareholders, with the top five shareholders holding over 54% of the total shares[151]. - The company’s major shareholders include both individual and corporate entities, indicating a diverse ownership structure[151]. Capital Expenditure and Investments - Total capital expenditure decreased by RMB113.5 million or 76.6% to RMB34.7 million for the six months ended 30 June 2019, compared to RMB148.2 million for the corresponding period in 2018[101]. - A conditional acquisition agreement was entered into on June 25, 2019, for approximately 52.00% of the total issued share capital of Hong Kong WD Pharmaceutical Co., Limited[124]. - The issuance of convertible bonds with an aggregate principal amount of HK$234,600,000 was completed in April 2019, aimed at raising funds for future investments[127]. - The company raised net proceeds of HK$234,200,000 through the issuance of convertible bonds, which were used for repayment of existing debts, business development, and general working capital[128]. Share Options and Awards - The Company adopted a new share award scheme on September 4, 2015, to recognize and incentivize certain employees[142]. - As of June 30, 2019, the trustee of the Share Award Scheme held a total of 28,407,847 shares, compared to 1,680,500 shares on June 30, 2018[142]. - A total of 12,280,866 shares were granted under the New Share Award Scheme as of June 30, 2019[142]. - The total number of share options exercised during the period was zero, indicating no activity in this regard[140].