Financial Performance - For the six months ended June 30, 2021, the company's revenue was approximately RMB 171.8 million, an increase of about 8.8% compared to RMB 158.0 million for the same period in 2020[14] - The gross profit for the same period was RMB 78.6 million, reflecting a growth of approximately 10.4% from RMB 71.2 million in the previous year[14] - The net profit after tax for the six months ended June 30, 2021, was RMB 44.1 million, which is an increase of about 10.5% compared to RMB 40.0 million for the same period in 2020[14] - The basic and diluted earnings per share attributable to the owners of the company were RMB 7.43, a decrease of approximately 16.2% from RMB 8.87 for the same period in 2020[14] - The group recorded a consolidated revenue of approximately RMB 171.8 million for the six months ended June 30, 2021, an increase of approximately RMB 13.8 million or 8.8% compared to the same period in 2020[20] - The three main products, namely Shen Kidney Filling Pill, Jin Gui Shen Qi Pill, and Qi Blood Double Supplement Pill, contributed significantly to the revenue increase, accounting for approximately 46.4% and 30.5% of total revenue during the current and previous periods respectively[20] - The overall gross profit margin slightly increased from approximately 45.1% to 45.7% due to a decrease in procurement costs for key materials and an increase in net selling prices[21] - The net profit after tax increased by approximately 10.5% to about RMB 44.1 million, driven by higher sales of the main products[25] - The total comprehensive income for the six months ended June 30, 2021, was RMB 44,138,000, compared to RMB 39,665,000 for the same period in 2020, reflecting improved profitability[71] Cash Flow and Investments - The net cash generated from operating activities for the period was approximately RMB 24.9 million, a significant increase from RMB 5.9 million for the six months ended June 30, 2020[27] - The net cash used in investing activities was approximately RMB 40.1 million, up from RMB 0.23 million for the six months ended June 30, 2020, primarily due to increased payments for the acquisition of properties, plants, and equipment[27] - The net cash generated from financing activities was approximately RMB 115.9 million, a substantial increase from RMB 8.2 million for the six months ended June 30, 2020, mainly due to proceeds from a global offering[27] - The total cash and cash equivalents at the end of the reporting period was RMB 173,932,000, compared to RMB 49,746,000 at the end of June 30, 2020, showing strong liquidity growth[71] Assets and Liabilities - As of June 30, 2021, the total assets of the group were approximately RMB 347.4 million, up from RMB 209.3 million as of December 31, 2020[26] - The total liabilities decreased to approximately RMB 47.3 million from RMB 74.4 million as of December 31, 2020, mainly due to trade and other payables[26] - The capital debt ratio significantly decreased to approximately 0.1% from 4.1% as of December 31, 2020, due to the repayment of interest-bearing loans[26] - The group’s total equity as of June 30, 2021, was RMB 300,134,000, an increase from RMB 108,519,000 as of June 30, 2020, reflecting overall growth in shareholder value[71] Operational Highlights - The company holds 71 drug approval numbers and 59 types of traditional Chinese medicine, covering six major therapeutic areas[8] - The company plans to maintain its leading position in the traditional Chinese medicine market and expand its sales network in southern China[8] - The company is focused on enhancing its research and development capabilities, collaborating with local universities to optimize product quality and develop new drugs[10] - The company anticipates further strategic cooperation opportunities in drug development to accelerate the pace of major product development[10] - The group has established a distribution network with over 80 distributors covering about 40 cities in China, supported by over 35 marketing personnel with relevant industry experience[17] - The group is optimistic about the future of the Chinese economy and the traditional Chinese medicine industry, aiming to leverage government policies to enhance market position and shareholder value[18] Employee and Management Costs - The total employee costs for the period were approximately RMB 9.3 million, compared to RMB 7.2 million for the six months ended June 30, 2020[32] - The total compensation for key management personnel, including directors, increased to RMB 1,013,000 for the six months ended June 30, 2021, compared to RMB 620,000 for the same period in 2020, reflecting a growth of 63.39%[128] - The defined contribution plan contributions for key management personnel rose to RMB 141,000 in the first half of 2021, up from RMB 92,000 in the same period of 2020, marking a 53.26% increase[128] Capital Expenditures and Offerings - The company issued shares amounting to RMB 147,802,000 during the reporting period, contributing to its capital structure[71] - The global offering on January 15, 2021, involved issuing 150,000,000 new ordinary shares at HKD 1.18 per share, raising a total of HKD 177,000,000 (approximately RMB 147,802,000)[125] - The expenses related to the global offering were approximately HKD 31,891,000 (around RMB 26,638,000), which will be recognized in the company's capital surplus account[125] Dividend and Related Party Transactions - The company did not recommend any dividend payment for the period[36] - The group did not recommend the payment of an interim dividend for the six months ended June 30, 2021, consistent with the decision for the same period in 2020[100] - The company did not enter into any significant related party transactions during the reporting period[57]

Financial Performance - The company's revenue for the year ended December 31, 2020, was approximately RMB 308.7 million, an increase of about 41.1% compared to RMB 218.8 million for the year ended December 31, 2019[8]. - The net profit for the same period rose to approximately RMB 63.6 million, reflecting an increase of about 37.5% from the previous year's net profit[8]. - The group recorded a total revenue of approximately RMB 308.7 million for the fiscal year 2020, an increase of about RMB 89.9 million or 41.1% compared to the fiscal year 2019[21]. - The pre-tax profit increased by approximately 38.6% from about RMB 65.3 million in 2019 to about RMB 90.5 million in 2020, primarily due to increased sales of herbal medicines[33]. - The gross profit margin slightly decreased from approximately 45.3% in 2019 to about 44.3% in 2020, primarily due to increased procurement costs of key raw materials[28]. - The net cash flow from operating activities for 2020 was approximately RMB 42.8 million, an increase from RMB 40.2 million in 2019[46]. - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[55]. Research and Development - Research and development expenses increased to approximately RMB 10.2 million, a rise of about 22.9% from RMB 8.3 million in the previous year[10]. - The company is investing $2 million in research and development for innovative drug formulations[55]. - New product development includes the launch of a herbal supplement line, expected to contribute an additional $5 million in revenue[55]. Market Expansion and Strategy - The company plans to expand production capacity by establishing a new workshop and a new extraction line to meet growing demand[9]. - The company aims to enhance its brand image and capitalize on digital growth by developing various online channels in response to changing consumer habits due to the COVID-19 pandemic[13]. - The company has actively expanded its sales network and optimized its sales channel structure to improve market penetration[9]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share by 2025[55]. - A strategic acquisition of a local competitor is anticipated to enhance production capabilities and increase market penetration[55]. Corporate Governance - The company has adopted the principles and code provisions of the Corporate Governance Code as the basis for its corporate governance practices since its listing on January 15, 2021[70]. - The board consists of 8 members, including 4 executive directors and 3 independent non-executive directors, ensuring compliance with the listing rules regarding board composition[79]. - The company will continue to review and monitor its corporate governance practices to ensure compliance with the Corporate Governance Code[71]. - The board is responsible for risk management and internal control systems, ensuring they are effective in achieving business objectives[114]. Environmental Sustainability - The company has implemented an environmental management system to identify, monitor, and reduce environmental risks[146]. - The company is committed to aligning its environmental goals with international standards and contributing to global environmental initiatives[146]. - The group has planted 265 trees, reducing greenhouse gas emissions by 6.1 tons of CO2 equivalent as part of its offset initiatives[151]. - Total waste generated in 2020 amounted to 12.03 tons, with a density of 0.070 tons per employee[152]. Employee Welfare and Diversity - The group employs a diverse workforce of 172 employees, with 116 females and 56 males, and a majority aged between 31 to 40 years[169]. - The company emphasizes gender equality, with 67% of employees being female and only 2% in senior management roles[179]. - Each employee received an average of 30 hours of training in 2020, tailored to their roles and business needs[178]. - The company prioritizes mental health by providing counseling services and promoting work-life balance through various activities[175]. Compliance and Risk Management - The company has established a robust intellectual property management system to protect sensitive information and ensure compliance with relevant laws[188]. - The company has implemented a whistleblowing platform for employees to report any breaches of confidentiality or misconduct[188]. - The company adheres to strict quality management standards, including compliance with GMP standards throughout the production process[193]. Stakeholder Engagement - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and ensure transparency[122]. - The company actively engages with stakeholders to address their concerns and improve communication channels[134]. - Key stakeholder concerns include risk management, economic performance, and information transparency[135].