Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 526,088 thousand, a decrease of 4.9% compared to RMB 553,017 thousand for the same period in 2023[1] - Gross profit decreased by 11.3% to RMB 137,260 thousand, with a gross margin of 26.1%, down from 28.0%[1] - Profit attributable to owners of the company was RMB 30,716 thousand, representing an 18.6% decline from RMB 37,727 thousand in the previous year[1] - Basic earnings per share decreased to RMB 5.20, down 18.5% from RMB 6.38[1] - Total comprehensive income for the period was RMB 57,343 thousand, compared to RMB 61,468 thousand in the prior year[3] - The adjusted EBITDA for the reporting period was RMB 88,591 thousand, compared to RMB 91,209 thousand for the same period last year, reflecting a decrease of 2.9%[15] - The pre-tax profit for the six months ended June 30, 2024, was RMB 30,716,000, a decrease of 18.5% compared to RMB 37,727,000 for the same period in 2023[18] - Total financing costs amounted to RMB 9,316,000, down 1.5% from RMB 9,460,000 in the previous year[18] - The company reported a total income tax expense of RMB 9,930,000 for the six months ended June 30, 2024, down from RMB 10,892,000 in the previous year[19] - The company’s effective tax rate for the period was approximately 16.5%, consistent with the previous year’s rate[20] Assets and Equity - Cash and cash equivalents increased to RMB 287,235 thousand from RMB 173,678 thousand, indicating improved liquidity[4] - Non-current assets totaled RMB 849,617 thousand, up from RMB 749,034 thousand at the end of 2023[5] - The company's total equity increased to RMB 756,695 thousand from RMB 699,352 thousand, reflecting a stronger financial position[6] - Total assets as of June 30, 2024, were RMB 1,059,323 thousand, an increase from RMB 943,443 thousand as of December 31, 2023[15] - Trade receivables totaled RMB 241,691,000 as of June 30, 2024, down from RMB 276,959,000 at the end of 2023[24] - Trade payables increased to RMB 152,315,000 as of June 30, 2024, compared to RMB 148,663,000 at the end of 2023, indicating a rise of 2.2%[25] Market and Sales Performance - Sales of pharmaceutical products amounted to RMB 356,306 thousand, down from RMB 366,196 thousand in the previous year, representing a decline of 2.4%[13] - Sales of healthcare products were RMB 55,876 thousand, a significant decrease of 28.2% from RMB 77,850 thousand in the prior year[13] - The manufacturing and sales of electrotherapy and physiotherapy equipment generated revenue of RMB 113,906 thousand, an increase of 4.3% compared to RMB 108,971 thousand in the previous year[13] - The retail market for pharmaceuticals in China was valued at ¥923.3 billion in 2023, with a growth rate of 5.8%, marking the lowest growth rate in history[28] - The O2O (Online to Offline) pharmacy market reached nearly ¥4.1 billion by May 2024, with a year-on-year growth of 21%[28] Research and Development - Research and development expenses increased to RMB 6,742,000, up 4.8% from RMB 6,433,000 in the prior year[18] - The company has added one new effective invention patent, bringing the total to four, and has launched a portable shockwave product at the 89th CMEF exhibition, receiving positive feedback[44] - Dongdixin continues to collaborate with renowned rehabilitation hospitals and research institutions to develop new products, enhancing its research and development capabilities[44] Corporate Governance and Social Responsibility - The board of directors is committed to high standards of corporate governance and has taken measures to strengthen internal controls and professional training for directors[87] - The audit committee was established on November 5, 2010, to oversee financial reporting and internal controls[89] - The company donated approximately RMB 8.42 million in cash and materials during the reporting period, actively fulfilling its corporate social responsibility[50] Strategic Initiatives and Future Plans - The company plans to continue expanding its market presence in China and Hong Kong, focusing on the distribution of imported pharmaceuticals and healthcare products[8] - The company plans to conduct strategic reviews every six months to adapt to internal and external environmental changes, ensuring alignment with its strategic goals and enhancing product and service quality through continuous technological innovation[77] - The company is focusing on expanding its traditional Chinese medicine business to meet the growing demand in the aging population and chronic disease treatment markets[28] - The group plans to leverage the 2024 Paris Olympics for marketing INNOPHARM fish oil, targeting young and high-end consumers through social media[39]

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 1,078,659,000, representing a 12.6% increase from RMB 957,701,000 in 2022[9] - Gross profit for the same period was RMB 280,665,000, a slight increase of 1.1% compared to RMB 277,627,000 in 2022[9] - Profit attributable to owners of the company rose by 67.5% to RMB 38,096,000 from RMB 22,741,000 in the previous year[9] - Basic earnings per share increased by 71.7% to RMB 6.44 from RMB 3.75 in 2022[9] - The group’s revenue for the year was approximately RMB 1,078,659,000, an increase of about RMB 120,958,000 or 12.6% compared to RMB 957,701,000 for the previous year, primarily driven by increased sales of Kyoto Nishikyo's medicinal syrup[118] - The group’s cost of sales was approximately RMB 797,994,000, an increase of about RMB 117,920,000 or 17.3% compared to RMB 680,074,000 for the previous year, attributed to higher sales volume[119] - Profit before tax for the year was approximately RMB 93,886,000, an increase of about 26,302,000 or 38.9% from RMB 67,584,000 in the previous year[126] - Net profit for the year was approximately RMB 61,594,000, an increase of about RMB 18,052,000 or 41.5% from RMB 43,542,000 in the previous year[128] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 3.38 per share, up 36.8% from HKD 2.47 per share in the prior year[9] - The proposed final dividend is HKD 0.0338 per share, totaling approximately HKD 21,041,000 (about RMB 19,049,000), representing a total payout ratio of about 50.0% of the profit attributable to shareholders for the year[158] Market Expansion and Product Development - The company is focusing on expanding its star product series and accelerating overseas business deployment in response to market opportunities[13] - The company is actively seeking investment opportunities in high-growth sectors such as innovative drugs, cell therapy, and health medical devices[149] - The company plans to accelerate cooperation with Southeast Asia and countries along the Belt and Road Initiative, enhancing product promotion in the European market[149] - The company is investing in new product development, with a budget allocation of 10 million for research and innovation initiatives[171] - The company plans to introduce dual-brand products in collaboration with well-known domestic enterprises, targeting the increasing demand for cardiovascular health products as the elderly population is projected to rise to 20.3% by 2030[64] Strategic Initiatives and Collaborations - The company is developing a biomedicine platform in the Greater Bay Area, with the Longde Industrial Park in Shenzhen set to become a key milestone in its internationalization strategy[27] - The company is collaborating with Lanzhou Foci Pharmaceutical to develop a dual-brand product series, enhancing its product offerings[21] - The company has established strategic cooperation with Germany's ZIMMER for the production of three registered products, enhancing its market presence[92] - The strategic cooperation framework agreement with Shaanxi Pharmaceutical Holdings Group focuses on marketing, R&D, and production, including the development of products using local medicinal materials[101] Marketing and Brand Development - The company is actively sponsoring several large-scale marathon events to enhance brand reputation and market penetration among sports enthusiasts[21] - The company is leveraging innovative marketing strategies to transform consumers from passive recipients to active participants in brand promotion[59] - The company has implemented a market sales tracking system (SMART) to monitor pricing and ensure fair access to essential medications[62] - The company has implemented aggressive marketing strategies, including partnerships with popular TV shows, resulting in a brand value of RMB 4.815 billion, ranking 18th in the 2023 Health Industry Brand Value List[67] Employee Engagement and Corporate Governance - The company is committed to enhancing employee morale through equity incentives and plans to attract more talented professionals to support its long-term development[34] - Over 30 training sessions were held, with more than 1,000 participants, aimed at enhancing employee professional skills and market sensitivity[108] - The company has established three committees: the audit committee, the remuneration committee, and the nomination committee, to oversee specific areas[195] - The board consists of six members, including one female director and five male directors, reflecting a commitment to diversity[191] Industry Trends and Economic Outlook - The "Silver Economy" in China is projected to reach approximately RMB 7 trillion in 2023, accounting for about 6% of the overall GDP, with expectations to grow to RMB 9 trillion in 2024 and RMB 12 trillion by 2026[20] - The global health market is projected to reach $180 billion by 2024, driven by increased demand from millennials and Generation Z consumers for healthier lifestyles[149] - The Chinese health food market reached RMB 394.68 billion in 2022, with a year-on-year growth of 3.0%, and is expected to grow to RMB 423.7 billion by 2027[149] Social Responsibility and Community Engagement - The company donated nearly RMB 10 million in cash and materials for social contributions, including RMB 800,000 for flood relief efforts[103] - The company has engaged in various community activities, including support for veterans, to strengthen its brand image and consumer relationships[69]

Financial Performance - The company's annual profit attributable to shareholders for 2023 was RMB 38,096 million, compared to RMB 22,741 million in 2022, representing an increase of 67.5%[6] - Revenue increased by 12.6% to approximately RMB 1,078,659,000 (2022: RMB 957,701,000) [64] - Net profit for the year increased by 41.5% to approximately RMB 61,594,000 (2022: RMB 43,542,000) [64] - Profit before tax increased by 38.9% to approximately RMB 93,886,000 (2022: RMB 67,584,000) [64] - Basic earnings per share increased by 71.7% to approximately RMB 6.44 (2022: RMB 3.75) [64] - The company plans to distribute a final dividend of HKD 3.38 per share for the year ending December 31, 2023, up from HKD 2.47 in 2022, pending shareholder approval[33] Sales and Market Trends - The total sales of Chinese and Western medicines reached RMB 671 billion in 2023, with a year-on-year growth rate of approximately 5.1%[28] - The retail pharmacy market sales in the first half of 2023 amounted to RMB 268.5 billion, representing an 8.2% growth compared to the same period last year[28] - The distribution segment's sales increased by 23.8% to approximately RMB 735,018,000, driven by high demand for cough and respiratory medications post-COVID[39] - The health products and daily chemicals segment recorded a sales increase of 7.9% to approximately RMB 102,562,000, driven by heightened consumer health awareness post-pandemic[151] - The sales revenue of Qi Blood Supplement products in the domestic retail market reached RMB 6.77 billion in 2023, representing a year-on-year growth of 20%[107] Assets and Liabilities - Non-current assets totaled RMB 749,034 thousand, an increase of 17.3% from RMB 639,043 thousand in 2022[68] - Current assets amounted to RMB 463,532 thousand, a decrease of 14.5% from RMB 541,741 thousand in 2022[68] - Total equity increased slightly to RMB 699,352 thousand from RMB 694,215 thousand in 2022[71] - The company reported a total asset minus current liabilities of RMB 874,118 thousand, an increase of 21.1% from RMB 721,622 thousand in 2022[68] Research and Development - Research and development costs increased to RMB 18,840 thousand, up 21.5% from RMB 15,519 thousand in the previous year[88] - The company successfully applied for government subsidies under the R&D cash rebate program, aimed at encouraging private sector investment in R&D[91] - The company is actively developing new products such as Western Ginseng Capsules and is focusing on the aging population's demand for cardiovascular-related products[107] Marketing and Brand Strategy - The company successfully established brand influence in the sports market for its key product, Jinhuayi Ma Da Zheng Honghua Oil, through significant marketing investments[41] - The company implemented aggressive marketing strategies, including sponsorship of popular TV shows, resulting in a significant increase in brand visibility[104] - The company is leveraging short video platforms like Douyin and Kuaishou to engage younger consumers and promote products through consumer-led marketing strategies[110] International Expansion - The total investment amount by Chinese pharmaceutical companies in overseas projects reached USD 14.3 billion in 2023, highlighting a significant increase in global expansion efforts[15] - The company plans to accelerate cooperation with Southeast Asia and countries along the "Belt and Road" initiative, as well as strengthen product promotion in the European market in 2024[142] - The company has successfully entered the Japanese market through strategic investments, aligning with its industrial layout and enhancing product offerings[186] Supply Chain and Operations - The company has strengthened its supply chain over the years, covering 220,000 retail outlets to enhance pharmacy traffic[23] - The implementation of volume-based procurement policies has improved procurement efficiency and reduced drug costs, benefiting patients[27] - The company faced supply shortages for its flagship product due to local material supply imbalances, leading to a slight decline in sales[41] Social Responsibility - The company has made significant contributions to social responsibility, donating nearly RMB 10 million in cash and materials during the year[169] - The company made charitable donations totaling RMB 1.05 million to support flood relief efforts in the Beijing-Tianjin-Hebei region and provided emergency supplies after an earthquake in Gansu[189] Customer Engagement - The company is enhancing cooperation with key accounts (KA) to improve customer loyalty and satisfaction through dedicated follow-up teams[109] - The integration of online and offline channels has improved conversion rates for key products, enhancing brand loyalty and customer engagement[173] Future Outlook - The Longde Health Industry Park is expected to officially commence operations in November 2024, following successful acceptance on January 18, 2024[121] - The company is preparing to launch dual-brand products in collaboration with well-known domestic enterprises to meet the growing demand in an aging society[107]

Revenue Growth - The company's revenue for the period saw significant growth, particularly driven by the strong performance of the Kyoto Nan Chai Han Chuan Bei Pi Pa Gao product, which experienced substantial revenue increase due to effective marketing strategies targeting post-COVID recovery consumers [1]. - The sales of the company's main products, including the Kyoto Nan Chai Han series and the La Ba brand Zheng Lu Wan, showed a notable increase, with the Kyoto Nan Chai Han series achieving a significant year-on-year growth [2]. - The company reported a 32% increase in sales performance compared to the same period last year, attributed to the implementation of an employee incentive plan that awarded 3.504 million shares to selected participants [14]. - The company's revenue for the six months ended June 30, 2023, was RMB 553.017 million, representing a 31.8% increase compared to RMB 419.647 million in the same period of 2022 [102]. Market Expansion - The company expanded its market coverage to approximately 150,000 chain and independent pharmacies, 20,000 primary healthcare institutions, and over 10,000 hospitals and clinics, enhancing its distribution network [4]. - The company has successfully entered over 150 top-tier hospitals and numerous outpatient and rehabilitation therapy institutions in China through bidding, covering more than 200 domestic clients across over 20 provinces [17]. - The company has continued to expand its market presence, obtaining promotional cooperation authorization in five provinces, including Shanghai and Henan [87]. Product Development and Innovation - The company is actively developing the Jin Huo Long De Life Health Industry Park, focusing on innovation in traditional Chinese medicine and creating a collaborative ecosystem for research and development [13]. - The company has accumulated 3 valid invention patents, 25 utility model patents, and 1 design patent during the reporting period, indicating ongoing innovation efforts [124]. - The company is actively developing new products, including probiotics and DHA products, with plans for the launch of new brands [148]. Marketing Strategies - The company has established a comprehensive marketing ecosystem through e-commerce platforms, integrating public and private traffic promotion to enhance product sales [11]. - The company’s marketing strategies have successfully engaged younger consumers through collaborations with popular media platforms, resulting in significant brand exposure [131]. - The company conducted various offline promotional activities, including community events and outdoor advertising, to enhance brand awareness and engage consumers [114]. Financial Performance - The gross profit for the same period was RMB 154.689 million, with a gross margin of 28.0%, down from 31.9% in the previous year, indicating a decrease of 3.9 percentage points [102]. - The net profit attributable to the owners of the company increased by 55.8% to RMB 37.727 million, compared to RMB 24.213 million in the prior year [102]. - The company’s basic earnings per share for the first half of 2023 were RMB 6.38, a 59.9% increase from RMB 3.99 in the same period of 2022 [102]. Corporate Social Responsibility - The company donated over RMB 3 million in cash and materials during the reporting period, receiving multiple honors for its charitable contributions [55]. - The company actively participated in community activities to support veterans and disadvantaged groups, providing health screenings and disease prevention services [57]. - The company continues to fulfill its corporate mission of serving the public and contributing to social responsibility [59]. Strategic Partnerships - The company has launched a strategic partnership with Shanghai Golden Partner Biotechnology Co., Ltd. to introduce dual-brand glucosamine products, targeting the growing demand for orthopedic products in an aging society [30]. - The company is leveraging its capital market advantages to form strategic alliances with upstream and downstream partners, enhancing product sales and market presence, particularly with increased holdings in Hong Kong Fo Chi Pharmaceutical [16]. Employee Development - The company emphasizes employee development and training, conducting numerous training sessions that reached nearly 1,000 participants, fostering a culture of continuous learning and growth [15]. - The company is enhancing employee training to improve overall capabilities and operational efficiency [143]. Market Trends - The overall retail pharmacy market in China saw a sales increase of RMB 180.4 billion in the first five months of 2023, representing a year-on-year growth of 10.81% [84]. - The e-pharmacy sector is experiencing rapid growth, with the market size reaching approximately RMB 97.8 billion, reflecting a year-on-year increase of 32.7% [109]. - The pharmaceutical distribution industry is entering a new development phase characterized by scaling, digitization, and lean management, driven by regulatory improvements and technological innovations [83].

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 957.7 million, representing a 13.0% increase from RMB 847.4 million in 2021[11] - Gross profit for the same period was RMB 277.6 million, a 5.3% increase compared to RMB 263.6 million in 2021[11] - Net profit attributable to the owners of the company decreased by 25.0% to RMB 22.7 million from RMB 30.3 million in 2021[11] - Basic earnings per share for 2022 was RMB 3.75, down 25.0% from RMB 5.00 in 2021[11] - The company reported a liquidity ratio of 1.15, down 14.8% from 1.35 in 2021[11] - The group's revenue for the year was approximately RMB 957,701,000, an increase of about RMB 110,315,000 or 13.0% compared to RMB 847,386,000 for the previous year[102] - The group's sales cost for the year was approximately RMB 680,074,000, an increase of about RMB 96,286,000 or 16.5% compared to the previous year[103] - Gross profit for the year was approximately RMB 277,627,000, an increase of about RMB 14,029,000 or 5.3%, with a gross margin decrease from 31.1% to 29.0%[103] - The net profit for the year was approximately RMB 43,542,000, a decrease of about RMB 7,669,000 or 15.0% compared to the previous year[112] Market Expansion and Product Development - The company achieved a 175% increase in sales of its prescription drug, indicating successful market penetration strategies[20] - The company is focusing on expanding its OTC sales channels for prescription drugs, establishing a professional marketing team[19] - In 2022, the company actively expanded its product portfolio, introducing new products such as the Lactobacillus probiotics for women and acquiring the online and offline distribution rights for Life's DHA in China[28] - The company completed the acquisition of French company Innopharm S.A. to pave the way for future overseas market development and to introduce high-quality European health food products[28] - The company is focused on identifying investment or acquisition opportunities to enhance its existing business network and achieve its strategic goals[35] - The company plans to leverage opportunities in the pharmaceutical e-commerce sector, enhancing its product offerings and sales through its cross-border e-commerce platform[35] - The company launched 33 products in collaboration with Hong Kong retailers, enhancing brand recognition and sales in the Hong Kong market[53] - The company is set to launch its Innopharm fish oil product, which has completed intellectual property registration and product sampling, aiming to leverage its marketing strategy for rapid consumer service[143] Operational Efficiency and Strategic Initiatives - The company is enhancing its research and development capabilities, collaborating with renowned universities to develop new technologies for pain physical therapy[31] - The company is implementing a dynamic strategic analysis and decision-making mechanism to adapt to the complex VUCA environment, ensuring orderly progress of its sub-strategies[24] - The company is committed to enhancing its operational efficiency through the automation of production lines at its subsidiary, Dongdixin Technology Co., Ltd., achieving balanced development in key markets[31] - The company has implemented a new operational model, allowing frontline staff to make decisions for quicker market responses, which has improved the ranking of its flagship store on Tmall International to the top 20[32] - The company is committed to improving its e-commerce operations and product offerings to respond quickly to market changes and enhance sales contributions[144] - The company implemented "Lean Production 6S" management, enhancing production efficiency and reducing costs through automation and digital manufacturing systems[74] - The group developed nearly 100 sales, customer, and team management reports through the SMART system, enhancing operational efficiency and management modernization[88] Market Trends and Consumer Behavior - Chronic disease medication demand is expected to grow due to the aging population, with a reported chronic disease prevalence rate of 23% in China[19] - The company reported a significant increase in demand for adult immunity products in Hong Kong, leading to successful promotions and sales growth despite challenges in the children's probiotics market[29] - The company recognizes the increasing demand for quality health products in the post-pandemic era, which presents significant growth opportunities for its branded products[35] - The company anticipates that the demand for four types of medicines will continue to grow as consumers adapt to new healthcare behaviors post-pandemic[46] - The B2C pharmaceutical e-commerce market in China reached RMB 96.1 billion in 2022, growing by 27.0% year-on-year, with December alone seeing a 68.4% increase to RMB 11.3 billion[144] - The offline retail pharmacy market maintained a dominant share of 85% in 2022, amounting to RMB 542.1 billion, which is a 10.2% increase, the highest growth in five years[144] Corporate Governance and Leadership - The company was co-founded by Zhao Lisheng and Chen Leshan, with Zhao serving as the executive director and chairman, responsible for overall strategic planning and business management[155] - Chen Leshan, also an executive director, focuses on financial planning and human resources management, bringing over 25 years of experience in the pharmaceutical industry[156] - The company has a strong leadership team with extensive experience in the pharmaceutical sector, including Zhou Xuhua, who has been the general manager since 2009 and has 25 years of industry experience[157] - The board consists of six directors, including three executive directors and three independent non-executive directors, ensuring a balanced governance structure[182] - The company has complied with the corporate governance code, with a commitment to high standards and shareholder value creation[177] - The board believes that increasing diversity at the board level is crucial for achieving strategic goals and sustainable development[187] Social Responsibility and Community Engagement - The group donated over RMB 7 million to various social causes, including pandemic relief and environmental support, during the year[91] - The group actively participated in environmental projects, including donations for sponge city construction and habitat protection[95] - The group was ranked 52nd in the Shenzhen charity donation list with a total donation of RMB 503,000[95] Future Outlook - The company has set a revenue guidance of $500 million for the next fiscal year, indicating a projected growth of 10%[165] - Future outlook remains positive, with a commitment to sustainable growth and shareholder value enhancement[165] - The company aims to expand its market presence internationally, particularly in the Belt and Road Initiative regions, leveraging its traditional Chinese medicine products[135]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 截至二零二二年十二月三十一日止年度之 年度業績公告 業績摘要 ‧ 收益增加13.0%至約人民幣957,701,000 元（二零二一年：人民幣 847,386,000元）。 ‧ 毛利增加 5.3% 至約人民幣 277,627,000 元（二零二一年：人民幣 263,598,000元）。 ‧ 毛利率下跌2.1個百分點至29.0%（二零二一年：31.1%）。 • 除匯兌虧損、投資物業估值虧損及稅前溢利增加12.5%至約人民幣 80,692,000元（二零二一年：人民幣71,723,000元）。 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 419,647,000, representing a 1.0% increase from RMB 415,300,000 in the same period of 2021[12] - Gross profit for the same period was RMB 133,696,000, with a gross margin of 31.9%, down from 32.2% in 2021[12] - Profit attributable to owners of the company increased by 24.3% to RMB 24,213,000 compared to RMB 19,482,000 in the previous year[12] - Basic earnings per share rose to RMB 3.99, up 24.3% from RMB 3.21 in the prior year[12] - For the six months ended June 30, 2022, the group's revenue was approximately RMB 419,647,000, an increase of about RMB 4,347,000 or 1.0% compared to RMB 415,300,000 for the same period in 2021[93] - The group's cost of sales for the same period was approximately RMB 285,951,000, an increase of about RMB 4,222,000 or 1.5% from RMB 281,729,000 in the previous year[94] - The gross profit margin decreased from 32.2% for the six months ended June 30, 2021, to 31.9% for the same period in 2022, primarily due to a reduction in the proportion of higher-margin products[94] - Operating profit for the six months ended June 30, 2022, was approximately RMB 46,737,000, an increase of about RMB 187,000 or 0.4% compared to RMB 46,550,000 in the previous year[100] - Profit before tax was approximately RMB 42,229,000, an increase of about RMB 1,686,000 or 4.2% compared to RMB 40,543,000 in the previous year[102] - For the six months ended June 30, 2022, the group's profit for the period was approximately RMB 35,103,000, an increase of about RMB 818,000 or 2.4% compared to approximately RMB 34,285,000 for the same period in 2021[105] Market Trends and Opportunities - The Chinese traditional medicine market is experiencing rapid growth, with a reported revenue of RMB 691.9 billion in 2021, a 12.4% increase year-on-year[16] - The easing of restrictions on the sale of certain pharmaceutical products is expected to positively impact sales moving forward[19] - The overall economic recovery is showing positive trends, which may contribute to the company's future performance[19] - The e-commerce market for pharmaceuticals reached RMB 125.9 billion in 2021, a year-on-year growth of 49.0%, with JD Health and Alibaba Health holding over 70.0% market share[25] - The online pharmacy market sales in 2021 grew by 51.5% compared to 2020, driven by the opening of prescription drug sales online[22] - The company is well-positioned to benefit from favorable policies in the traditional medicine sector, enhancing its growth prospects[16] - The company predicts a significant market potential for home testing products, particularly antigen test kits, in response to ongoing pandemic conditions and increasing health awareness[65] Product Development and Sales - The company has expanded its product offerings to include antigen test kits in response to the ongoing pandemic[19] - The company's revenue from the pharmaceutical division was approximately RMB 222,402,000, an increase of 3.0% year-on-year, accounting for 53.0% of total revenue[29] - The company's newly introduced innovative drug, folic acid tablets, saw sales increase threefold in the first half of 2022 compared to the same period in 2021[33] - The company's sales in the Hong Kong market increased by over 15.0% year-on-year, with product coverage expanding from dozens to over a hundred pharmacies[35] - The medical equipment division's revenue was approximately RMB 139,389,000, a decrease of 2.1% year-on-year, accounting for 33.2% of total revenue[29] - The OTC retail market sales in the first quarter of 2022 were approximately RMB 73.15 billion, a year-on-year increase of 3.8%[22] - The sales of the prescription drug "依葉" have rapidly increased, opening a new model for chronic disease health management, with a focus on OTC market development[38] - The sales of "康萃樂" probiotics in the Hong Kong market grew by 7% compared to the same period last year, maintaining a leading position among similar products[47] - "Life's DHA" sales increased by 213.2% compared to the previous year, gaining significant market attention due to its high-quality DHA sourced from algae[48] - The "金活依馬打正紅花油" product line recorded a growth of 23.9% compared to the same period last year, driven by increasing demand for orthopedic topical medications[48] Marketing and Brand Strategy - The company has established partnerships with professional doctors to enhance product credibility, achieving nearly one million views on Douyin for promotional videos[51] - The company is actively exploring new marketing models for prescription drugs in OTC channels, utilizing big data to identify high-risk hypertension areas[38] - Collaborations with top new media and live streaming events have been initiated to enhance brand awareness and consumer engagement[41] - The company is expanding its e-commerce channels, focusing on partnerships with major platforms like JD and Alibaba, while also enhancing short video promotions[44] - The company has developed a comprehensive marketing strategy that includes both online and offline activities to strengthen brand connection with consumers[44] - The introduction of new products, such as women's probiotics, is aimed at addressing the growing consumer demand for health and wellness products[47] - The Life's DHA algae oil series achieved over 10 million total exposures through various platforms, significantly increasing brand visibility and market share[53] Operational and Financial Management - The company has implemented a new operational mechanism for its cross-border e-commerce business, allowing for greater autonomy and responsiveness to market demands[58] - The company plans to improve its financing capabilities and optimize its capital structure while managing joint ventures and acquisitions more effectively[127] - The company is focused on strengthening risk control and enhancing its risk management system in response to uncertainties such as the pandemic and international instability[129] - The company is committed to developing its own research capabilities and establishing an integrated strategy for production and marketing[130] - The company has established a combination of short, medium, and long-term incentive mechanisms to attract and retain talent[130] - The group plans to strengthen brand operations and expand market share for key products such as Life's DHA and others in the second half of 2022[124] - The group aims to enhance e-commerce sales and develop a professional e-commerce operation team to respond quickly to market conditions in the second half of 2022[125] Shareholder and Equity Information - The company holds a total of 388,556,250 shares, with significant ownership percentages held by key executives, including 47.84% by Zhao Lisheng through controlled corporations[136] - Zhao Lisheng holds 20,372,000 shares directly, representing 3.27% of the company's total issued share capital[136] - Major shareholders include Jin Guo with 297,812,250 shares (47.84%) and Jin Chen with 90,000,000 shares (14.46%) as of June 30, 2022[144] - The company has a stock option plan approved in November 2010, with a total of 18,368,000 options granted[150] - A share reward plan was implemented on August 27, 2019, with a total of 16,000,000 shares available for rewards[152] - In January 2022, the board approved the grant of 1,556,000 reward shares, representing approximately 0.25% of the total issued share capital[153] - The reward plan limit was increased to 46,000,000 shares, approximately 7.39% of the total issued share capital as of July 13, 2022[153] Assets and Liabilities - As of June 30, 2022, the total assets amounted to RMB 1,284,829 thousand, an increase from RMB 1,213,829 thousand as of December 31, 2021, representing a growth of approximately 5.8%[179] - The total liabilities as of June 30, 2022, were RMB 507,212 thousand, an increase from RMB 473,623 thousand as of December 31, 2021, indicating a rise of 7.1%[179] - The company's inventory as of June 30, 2022, was RMB 122,724 thousand, up from RMB 106,744 thousand as of December 31, 2021, reflecting an increase of 15%[179] - The company's non-current assets totaled RMB 610,354 thousand as of June 30, 2022, compared to RMB 574,174 thousand as of December 31, 2021, marking an increase of 6.3%[179] - The group’s total borrowings as of June 30, 2022, were approximately RMB 236,591,000, all of which are due within one year[111] Cash Flow and Expenditure - The group’s cash and cash equivalents increased by approximately RMB 49,895,000 during the reporting period, mainly from net cash generated from operating activities of approximately RMB 98,385,000[108] - The net cash generated from operating activities for the six months ended June 30, 2022, was RMB 98,385 thousand, compared to RMB 48,894 thousand for the same period in 2021, indicating an increase of 101.5%[188] - The net cash used in investing activities for the six months ended June 30, 2022, was RMB (44,737) thousand, compared to RMB (3,774) thousand for the same period in 2021, indicating a significant increase in cash outflow[188] - The group’s capital expenditure for the reporting period was approximately RMB 37,978,000, compared to RMB 5,337,000 for the same period in 2021[114] Compliance and Governance - The company has not applied any new standards or interpretations that have not yet come into effect during the reporting period[196] - The application of revised accounting standards did not have a significant impact on the financial statements presented[198] - The company anticipates that the application of other new and revised standards will not significantly affect its performance and financial position[198] - The financial statements are prepared based on historical cost, except for investment properties and financial assets measured at fair value[198]

Financial Performance - Total revenue for the year ended December 31, 2021, was RMB 847,386,000, representing a 13.7% increase from RMB 745,383,000 in 2020[34] - Gross profit decreased by 5.9% to RMB 263,598,000 from RMB 280,154,000 in the previous year[34] - Net profit attributable to the owners of the company surged by 158.8% to RMB 30,319,000 compared to RMB 11,716,000 in 2020[34] - Basic earnings per share increased by 161.8% to RMB 5.00 from RMB 1.91 in the prior year[34] - Proposed final dividend per share increased by 267.7% to HKD 2.39 from HKD 0.65 in 2020[34] - The current ratio improved to 1.35 from 1.29 in the previous year, indicating better short-term financial health[34] - The debt-to-equity ratio decreased to 5.8% from 6.7%, reflecting a reduction in leverage[34] - The company reported a pre-tax profit of RMB 69,434,000, a slight decrease of 2.1% from RMB 70,891,000 in 2020[34] - The cost of sales increased by 25.5% to RMB 583,788,000 from RMB 465,229,000 in the previous year[34] Market Trends and Opportunities - The company noted that the global economy showed signs of recovery, with China's GDP growth at 8.1% in 2021[39] - The Chinese traditional medicine market is projected to reach RMB 3.8 trillion in 2021, with an annual growth rate of 15% expected to exceed RMB 7.5 trillion by 2025[41] - The Chinese medicine health market grew from RMB 1,029 billion in 2014 to RMB 3,024 billion in 2020, representing a compound annual growth rate of 19.7%[41] - The population aged 60 and above in China reached 264.02 million in 2021, accounting for 18.7% of the total population, an increase of 5.4% from 2020[41] - The company is leveraging the growing demand for preventive and health care services in traditional Chinese medicine, driven by increased health awareness among consumers[41] - The market for traditional Chinese medicine is expected to exceed RMB 75 trillion by 2025, driven by increasing healthcare demands and rising disposable income[59] Business Strategy and Development - The company has actively expanded its business through various channels and marketing strategies, maintaining stable local business performance despite the pandemic[44] - The company has implemented a dynamic strategic management system, focusing on mission-driven and vision-led development for the next 50 years[45] - The company has engaged in extensive market research, issuing nearly 250,000 words of questionnaires and holding around 70 seminars to refine its strategic planning[45] - The company has adapted to changing consumer habits by embracing new retail models and social media marketing strategies[44] - The company aims to integrate online and offline resources for digital transformation in the health industry, focusing on data-driven and product-first strategies[52] - The company will implement a "cost reduction and efficiency enhancement" strategy to optimize management and improve operational quality[53] Product Development and Innovation - The company’s subsidiary, Dongdixin Technology, has improved production efficiency through semi-automatic line upgrades and has made significant progress in product R&D, including new pain therapy technologies[45] - The company plans to strengthen its product structure by launching a series of French self-owned brand products and expanding its product categories to meet diverse health needs[53] - The group introduced new products, including the preservative-free sodium hyaluronate eye drops and women's probiotics, enhancing its product portfolio[8] - The company has developed proprietary products for the prevention and treatment of infertility, leveraging unique patents in Hong Kong[62] - The company has entered the slow disease market, targeting respiratory diseases, gastrointestinal diseases, and hypertension[62] Corporate Governance and Management - The company is committed to a people-oriented management philosophy to enhance employee engagement and performance[162] - The management team includes experienced professionals with extensive backgrounds in the pharmaceutical and healthcare product distribution sectors[164][165][166] - The company has a structured approach to financial management, with senior members being part of recognized accounting associations[173] - The board consists of six directors, including three executive directors and three independent non-executive directors, ensuring a balanced governance structure[189] - The company has complied with the corporate governance code, with a commitment to enhancing internal control systems and professional training for directors[185] Social Responsibility and Community Engagement - The company actively participated in social responsibility initiatives, donating medical supplies and support to various communities and organizations during the pandemic[100] - The company ranked 29th in the Shenzhen Charity Donation List for 2020, reflecting its commitment to social contributions[102] - The group organized various consumer engagement activities during traditional holidays, such as "Duanwu Rice Dumpling Festival" and "Father's Day," which received enthusiastic participation from the community and pharmacies[74] Talent Development and Retention - The company plans to enhance its talent development platform and introduce more high-end professionals to stabilize and grow its workforce[56] - The company aims to implement a combination of short, medium, and long-term incentive mechanisms to attract and retain talent[56] - The group emphasizes the importance of talent retention and development through a structured incentive mechanism[149] - The company collaborates with higher education institutions to introduce EMBA and EDP courses for employee development[160] E-commerce and Digital Marketing - The group achieved double-digit year-on-year growth in its e-commerce segment, leveraging major platforms like JD.com and Alibaba, while also providing health knowledge services[76] - The company is actively participating in the online retail space, adapting to changing consumer habits and expanding its digital marketing efforts[69] - The group launched a B2C e-commerce retail store with 13 stores across six major platforms, including Tmall and JD.com, featuring 36 brands and 89 SKUs in its cross-border pharmacy section[86] Financial Commitments and Investments - The capital expenditure for the year was approximately RMB 66,301,000, compared to RMB 11,425,000 in the previous year[143] - The group's capital commitment as of December 31, 2021, was approximately RMB 325.07 million, a decrease from RMB 357.95 million as of December 31, 2020[147] - The investment in BYD Semiconductor is expected to yield significant financial returns once the company goes public in 2022[105] - The acquisition of French company Innopharm S.A. is expected to be completed in 2022, facilitating faster access to the European market and enhancing the introduction of quality health products[155]

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 415.3 million, an increase of 41.8% compared to RMB 292.9 million in the same period of 2020[12]. - Gross profit for the same period was RMB 133.6 million, reflecting a 21.5% increase from RMB 109.9 million year-on-year[12]. - The net profit attributable to the owners of the company was RMB 19.5 million, a significant increase of 97.8% compared to RMB 9.9 million in the previous year[12]. - Basic earnings per share rose to RMB 3.21, up 100.6% from RMB 1.60 in the same period last year[12]. - Operating profit for the six months ended June 30, 2021, was approximately RMB 46,550,000, a decrease of about RMB 2,778,000 or 5.6% compared to RMB 49,328,000 in 2020[97]. - Profit before tax for the same period was approximately RMB 40,543,000, a decrease of about RMB 4,775,000 or 10.5% compared to RMB 45,318,000 in 2020[99]. - The group's net profit for the six months ended June 30, 2021, was approximately RMB 34,285,000, an increase of about RMB 2,512,000 or 7.9% compared to RMB 31,773,000 in 2020[101]. - Total comprehensive income for the period was RMB 40.1 million, compared to RMB 33.1 million in 2020, an increase of 21%[178]. Market Environment - The Chinese economy showed a GDP growth of 12.7% year-on-year in the first half of 2021, contributing to a favorable market environment for the pharmaceutical industry[17]. - The pharmaceutical industry is recovering steadily, with ongoing improvements despite fluctuations caused by the COVID-19 pandemic[17]. - The aging population and the new three-child policy are expected to increase health demand, positively impacting various segments of the pharmaceutical market[22]. - The "14th Five-Year Plan" is expected to drive rapid development in traditional Chinese medicine, providing long-term growth opportunities for the company's core products[18]. Product and Sales Performance - The sales proportion of the pharmaceutical division was 52.0%, amounting to approximately RMB 215,976,000, representing a 107.5% increase compared to the same period last year[30]. - The health products division accounted for 13.7% of sales, approximately RMB 57,001,000, reflecting a 34.1% increase year-on-year[30]. - The medical equipment division's sales proportion was 34.3%, approximately RMB 142,323,000, which decreased by 2.8% compared to the previous year[30]. - The sales revenue of the flagship product, Kyoto Nianci An Pi Pa Gao, significantly increased compared to the same period last year, despite previous pandemic-related restrictions impacting sales[31]. - The sales of the La Ba brand Zheng Lu Wan increased significantly, with 27 distribution areas showing year-on-year growth, including 15 areas with over 100% growth[36]. - The sales of Jin Huo Yi Ma Da Zheng Hong Hua You grew by 17% year-on-year, with pure customer sales increasing by 42% due to a detailed chain cooperation plan[41]. Strategic Initiatives - The company plans to continue enhancing its commercial channel layout and increase terminal coverage in the second half of 2021, focusing on county-level markets and consumer education[35]. - The company has actively engaged in online marketing and promotional activities, including collaborations with O2O e-commerce platforms like Meituan and Ele.me, to boost sales and brand visibility[39]. - The company aims to strengthen the value chain of Zheng Lu Wan's distribution channels and enhance cooperation with partners to improve sales performance in key areas[39]. - The company is set to launch terminal trial activities for Hong Hua You in the second half of the year, focusing on consumer interaction and brand reputation enhancement[43]. Financial Stability - The current ratio improved to 1.37, a 6.2% increase from 1.29 at the end of 2020[12]. - The asset-liability ratio decreased to 20.8%, down from 23.6% at the end of 2020, indicating improved financial stability[12]. - The total borrowings of the group as of June 30, 2021, were approximately RMB 264,881,000, all of which are due within one year[106]. - The debt-to-asset ratio as of June 30, 2021, was 20.8%, a decrease from 23.6% as of December 31, 2020, due to a reduction in interest-bearing bank loans and an increase in total assets[107]. Corporate Governance - The board of directors is committed to high standards of corporate governance and has adopted measures to enhance internal control systems[164]. - The company’s chairman and CEO roles are held by the same individual, which the board believes provides strong leadership[167]. - The company has complied with all applicable provisions of the corporate governance code during the reporting period, except for a deviation regarding the separation of roles[164]. Future Outlook - The company plans to optimize its product portfolio and leverage its online and offline supply chain advantages in the second half of 2021[120]. - The company is in the final year of its "14th Five-Year Development Strategy" and is preparing for the "15th Five-Year Development Strategy" to enhance its long-term development goals[120]. - The company is focusing on strategic partnerships to explore traditional health products and expand into overseas markets[123].

Financial Performance - Total revenue for the year ended December 31, 2020, was RMB 745,383,000, a decrease of 23.8% from RMB 977,928,000 in 2019[11] - Gross profit increased by 4.8% to RMB 280,154,000 compared to RMB 267,403,000 in the previous year[11] - Net profit attributable to shareholders was RMB 11,716,000, a significant decrease of 73.0% from RMB 43,427,000 in 2019[11] - Basic earnings per share decreased to RMB 1.91, down 72.7% from RMB 7.00 in 2019[11] - Proposed final dividend per share is HKD 0.65, a decrease of 72.2% from HKD 2.34 in the previous year[11] - The group's profit before tax for the year was approximately RMB 70,891,000, an increase of about RMB 1,082,000 or 1.5% compared to RMB 69,809,000 for the previous year[142] - The group's annual profit attributable to owners was approximately RMB 11,716,000, a decrease of about RMB 31,711,000 or 73.0% compared to RMB 43,427,000 in the previous year[146] Liquidity and Financial Ratios - Current ratio improved slightly to 1.29 from 1.27, indicating better short-term financial stability[11] - Quick ratio increased to 1.05 from 0.92, reflecting improved liquidity[11] - The capital debt ratio rose to 23.6%, up from 16.7%, indicating a higher proportion of debt in the capital structure[11] - The group's debt-to-equity ratio increased to approximately 43.7% from 31.8% in the previous year, primarily due to increased bank borrowings[154] - Cash and cash equivalents increased by approximately RMB 137,323,000, with net cash inflow from operating activities of about RMB 123,584,000[150] Impact of COVID-19 - The company faced significant challenges due to the COVID-19 pandemic, which impacted global economic conditions[16] - The global economy contracted by 4.3% in 2020, which may have long-term effects on economic activity and income growth[16] - The Chinese pharmaceutical industry experienced a negative growth of -0.5% in retail sales during the first half of 2020, with traditional Chinese medicine sales declining by -5.5% due to the pandemic impact[36] - The pandemic led to a 94% decline in the number of free travelers, severely impacting sales channels in Hong Kong[73] Business Operations and Strategies - The company repurposed its GMP solid production workshop to produce masks, operating 24/7 to meet the demand for pandemic prevention materials[21] - The company is expanding its e-commerce presence, focusing on partnerships with major platforms like Alibaba Health and JD Health, and exploring new marketing models such as live-streaming sales[26] - The company plans to establish a comprehensive research and development base to support the innovation of health products, enhancing its capabilities in testing, production, and logistics[26] - The company is actively involved in the construction of the Guangdong-Hong Kong-Macao Greater Bay Area's traditional Chinese medicine industry, aiming to strengthen its market position[23] - The group plans to strengthen product structure and expand product introduction channels, focusing on self-owned brand innovation in 2021[31] Marketing and Sales - The company actively engaged in online marketing and live streaming activities to boost brand awareness and sales during the pandemic[44] - The company implemented a brand development strategy to enhance the distribution network in third and fourth-tier cities for Jinhuo brand products[62] - The company collaborated with major platforms for O2O marketing activities to drive sales and improve customer retention[47] - The company emphasized online sales and new media promotion through platforms like Douyin and Xiaohongshu to showcase product applications[62] - The company is focused on integrating online and offline marketing strategies to enhance consumer experience and meet the demand for high-quality pharmaceutical products[172] Product Development and Innovation - The company has successfully introduced the new drug, Enalapril Maleate Tablets, which received Class I new drug certification from the National Medical Products Administration and is included in hypertension treatment guidelines[26] - The group is committed to introducing high-quality health products, including pharmaceuticals and health foods, to meet changing consumer demands[167] - The group is collaborating with Hong Kong University of Science and Technology on probiotic product development, with plans for market launch soon[167] Human Resources and Corporate Governance - The total employee cost for the group was approximately RMB 152,774,000 for the year, compared to RMB 127,134,000 in 2019, reflecting an increase of about 20.2%[174] - The group has a total of 1,033 employees as of December 31, 2020, with 411 employees primarily engaged in sales and marketing roles[174] - The company has implemented various incentive mechanisms to improve employee performance and has established a business school in collaboration with higher education institutions[174] - The company emphasizes a people-oriented approach, providing employees with protective measures during the pandemic, including medical masks and traditional Chinese medicine[109] Investments and Future Plans - The group is actively seeking quality investment opportunities, including participation in BYD Semiconductor's strategic investment and spin-off listing project, aiming for substantial investment returns[114] - The group plans to launch new products and expand its product portfolio, focusing on OTC market opportunities[164] - The group is advancing the construction of the Longde Health Industry Park, which will integrate R&D, testing, production, storage, and transportation[167] Social Responsibility - The group donated approximately RMB 6.6 million for charitable purposes, focusing on pandemic relief, environmental protection, and community support[123] - The group signed a distribution agreement for medical masks to address market shortages during the pandemic, demonstrating its commitment to social responsibility[123]