Financial Performance - Revenue for 2019 reached $100,415 thousand, representing a 20.8% increase from 2018's $83,114 thousand[7] - Adjusted net profit for 2019 was $21,397 thousand, up 28.5% from $16,629 thousand in 2018[9] - Total assets increased significantly to $315,268 thousand in 2019, compared to $77,464 thousand in 2018, marking a growth of 307.5%[7] - Cash and cash equivalents surged to $207,752 thousand in 2019, a substantial rise from $16,306 thousand in 2018, reflecting a growth of 1,174.5%[7] - Gross profit margin for 2019 was 37.1%, a decrease from 40.8% in 2018[7] - The company reported a net profit margin of 18.4% for 2019, an increase from 13.5% in 2018[7] - Total liabilities rose to $49,990 thousand in 2019, up from $33,830 thousand in 2018, indicating a growth of 47.8%[7] - The adjusted profit margin for 2019 was 21.3%, an increase from 20.0% in 2018[7] - The group's revenue increased by 20.8% from approximately $83.1 million for the year ended December 31, 2018, to approximately $100.4 million for the year ended December 31, 2019[50] - Revenue from North America rose by 33.1% from approximately $54.7 million to approximately $72.8 million during the same period[50] - Revenue from China increased by 1.0%, from approximately RMB 188.5 million (equivalent to about $28.5 million) to approximately RMB 190.3 million (equivalent to about $27.7 million)[50] - The revenue from the top five customers grew by 32.4% from approximately $24.3 million to approximately $32.1 million, accounting for 32.0% of total revenue for the year ended December 31, 2019[53] - The group's service costs increased by 28.3% from approximately $49.2 million to approximately $63.1 million, primarily due to new lease agreements and laboratory equipment acquisitions in China[54] - Gross profit rose by 10.0% from approximately $33.9 million to approximately $37.3 million, while the gross margin decreased from 40.8% to 37.1%[56] - Other income surged from approximately $0.5 million to approximately $5.5 million, mainly due to increased interest income from unutilized IPO proceeds and revenue from technical support services[57] - The group recorded a net other income of approximately $1.9 million for the year ended December 31, 2019, compared to approximately $0.1 million for the previous year[60] - Net profit increased by 64.0% from approximately $11.2 million for the year ended December 31, 2018, to approximately $18.4 million for the year ended December 31, 2019, with a net profit margin of 18.4%[67] - Adjusted net profit rose by 28.7% from approximately $16.6 million for the year ended December 31, 2018, to approximately $21.4 million for the year ended December 31, 2019, with an adjusted net profit margin of 21.3%[69] - EBITDA increased by 57.7% from approximately $18.8 million for the year ended December 31, 2018, to approximately $29.6 million for the year ended December 31, 2019, with an EBITDA margin of 29.5%[70] Market Expansion and Strategic Acquisitions - The company plans to expand its market presence and invest in new product development to drive future growth[5] - The company is focusing on strategic acquisitions to enhance its competitive position in the market[5] - The company acquired a 25.96% stake in Fonda Suzhou in September 2019, becoming the controlling shareholder[14] - The acquisition of RMI in November 2019 enhanced the company's drug metabolism and pharmacokinetics capacity[14] - The acquisition of BRI in December 2019 expanded the company's capabilities in drug metabolism and pharmacokinetics as well as bioanalytical services, extending its presence to Canada and the West Coast of North America[14] - The company plans to focus on improving existing core business performance and expanding into new business areas in 2020[14] - The company allocated more resources to its China operations to meet high demand for its services and capitalize on rapid growth opportunities in the region[11] - The company has expanded its service offerings significantly, establishing strategic alliances with large pharmaceutical companies due to its growing geographical coverage and scientific expertise[20] - The company aims to establish new drug metabolism and pharmacokinetics centers in North America and China as part of its strategic expansion[93] Operational Capacity and Facilities - As of December 31, 2019, the company operates seven facilities in North America and five in China, enhancing its operational capacity[21] - The company expanded its laboratory space in Pennsylvania from 10,000 square feet to accommodate biomarker testing and cell/gene therapy drug development services[12] - The laboratory space in Shanghai, China, was expanded from 15,000 square feet to 55,000 square feet[12] - The company has completed an expansion of its bioanalytical laboratory in Exton, Pennsylvania, adding 10,000 square feet to enhance its capabilities in biopharmaceutical and small molecule drug development[31] - A contract has been signed to lease an additional 71,000 square feet of laboratory space in Exton, Pennsylvania, aimed at expanding its chemistry, manufacturing, and control as well as bioanalytical services, with partial operations expected to commence in Q4 2020[32] - Frontage Shanghai opened a new laboratory facility in Shanghai, covering 42,000 square feet, dedicated to small molecule services and bioanalytical work[33] - A new research facility in Suzhou, covering over 215,000 square feet, was announced to focus on drug metabolism and pharmacokinetics research[45] Corporate Governance and Management - The company emphasizes the importance of independent directors maintaining professional standards and actively participating in board meetings[99] - The board believes that Mr. Li can dedicate sufficient time and effort to fulfill his duties as an independent non-executive director despite holding multiple positions[99] - The independent directors bring a wealth of experience from various sectors, enhancing the company's strategic decision-making[100] - The management team is committed to ensuring accurate financial reporting and compliance with regulatory standards[103] - The company has adopted a standard code for securities trading by directors, ensuring compliance with trading standards[182] - The board of directors believes that good corporate governance is essential for achieving the company's goals and maintaining ethical standards[181] - The company has established compliance policies to ensure adherence to applicable laws and regulations, with no known violations during the reporting period[178] Employee and Talent Management - The company emphasizes the importance of employee training and competitive compensation to retain talent[184] - The employee cost for the group was approximately $43.3 million for the reporting period, compared to $33.8 million for the year ended December 31, 2018[174] - The group has a total of 712 employees, with 410 located in the United States and Canada, and 302 in China[174] Financial Position and Shareholder Information - The total distributable reserves available for shareholders as of December 31, 2019, amounted to approximately $36.0 million[116] - Major shareholders include Hong Kong Tiger with 1,032,964,090 shares, representing 51.45% of the total equity, and Dr. Li Song with 192,647,320 shares, representing 9.60%[139] - The company granted a total of 7,990,000 stock options to eligible employees under the 2015 Share Incentive Plan on February 28, 2019, with an exercise price of $2.00[142] - The company has adopted share incentive plans to reward eligible participants for their contributions[174] Risks and Compliance - The company faces operational risks due to dependency on clients' demand for outsourcing services, which is influenced by their financial performance and R&D spending[151] - The company is exposed to international operational risks, including compliance with foreign laws and regulations, which may adversely affect business performance[153] - The company’s borrowings are floating-rate bank loans, exposing it to interest rate risk, which it plans to manage through various measures[154] - The company primarily operates in the U.S., with most transactions settled in USD, leading to foreign exchange risk due to some entities dealing in RMB and EUR[155] - The company has not engaged in any hedging activities to manage interest rate risk during the reporting period[154] Environmental and Social Responsibility - The company is committed to environmental responsibility and aims to reduce its operational impact on the environment[179] - The company has taken appropriate measures to protect employee and customer data from cyber threats, but ongoing investments are necessary to enhance security capabilities[157] - The evolving landscape of privacy and data protection legislation may increase liability risks and operational costs for the company[159] - Charitable donations during the reporting period totaled approximately $3,000, compared to $3,500 in 2018[118]