Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 1,353,470,000, a decrease of 1.7% compared to RMB 1,377,314,000 in the same period of 2023[5] - The gross profit for the same period increased by 7.7% to RMB 324,692,000, up from RMB 301,540,000 in 2023[5] - The net profit for the period rose by 22.7% to RMB 127,566,000, compared to RMB 104,002,000 in the previous year[6] - Profit attributable to equity holders of the parent increased by 21.6% to RMB 125,288,000 from RMB 103,009,000[5] - The adjusted profit for the period, a non-GAAP measure, was RMB 127,790,000, reflecting an 8.9% increase from RMB 117,396,000 in 2023[6] - Basic and diluted earnings per share for the period were RMB 9.27, up from RMB 7.62, representing an increase of 1.65[5] - The company reported an operating loss of RMB 5,012,000 from its proprietary brand product business, which is still in the early research stage, but this loss did not significantly impact overall financial performance[11] - The gross profit margin improved to 24.0%, up by 2.1 percentage points from 21.9% in the previous year[18] - The net profit for the reporting period was RMB 127,566,000, a 22.7% increase from RMB 104,002,000 for the six months ended June 30, 2023, mainly due to the increase in after-sales service gross profit margin[39] - The adjusted net profit for the reporting period was RMB 127,790,000, an increase of 8.9% from RMB 117,396,000 in the previous period, also driven by the increase in after-sales service gross profit margin[40] Revenue Breakdown - Distribution business revenue was RMB 1,253,634,000, accounting for 92.7% of total revenue, down 3.0% from RMB 1,293,002,000[22] - Revenue from solution services provided to clinical laboratories in hospitals reached RMB 117,462,000, a 4.7% increase from RMB 112,227,000 for the six months ended June 30, 2023[9] - Revenue from the sale of medical consumables was RMB 1,170,596,000, an increase of 1.2% from RMB 1,156,622,000 in the previous year[83] - Revenue from after-sales services increased significantly to RMB 95,258,000, up 22% from RMB 78,163,000 in the prior year[83] - Revenue from sales to hospitals and medical institutions was RMB 188,124,000, an increase from RMB 171,061,000 in the previous year[83] Market Position and Strategy - The company is a leading distributor of IVD products in China and is involved in the research, development, production, and sales of its own brand IVD products[7] - The company aims to stabilize and increase market share and profitability through a competitive and diversified product portfolio and extensive distribution network[7] - The company continues to focus on expanding its market presence and enhancing its product offerings in the IVD sector[7] - The company plans to expand its product portfolio and distribution network to capture high growth potential in the IVD market[14] - The company aims to enhance its R&D capabilities by investing in equipment and hiring experts to develop proprietary IVD products[16] Assets and Liabilities - Cash and cash equivalents increased by 29.8% to RMB 1,589,593,000 compared to RMB 1,224,786,000 at the end of 2023[19] - The total assets of the company rose by 11.3% to RMB 5,328,067,000 from RMB 4,785,052,000[19] - The net current assets increased to RMB 1,829,422,000 as of June 30, 2024, compared to RMB 1,783,091,000 as of December 31, 2023, reflecting an increase of RMB 46,331,000[45] - The group's debt-to-asset ratio was approximately 15.0% as of June 30, 2024, significantly up from 6.7% as of December 31, 2023[54] - The total liabilities as of June 30, 2024, were RMB 259,617,000, a decrease from RMB 330,790,000 as of December 31, 2023, reflecting a reduction of approximately 21.5%[95] Shareholder Information - The total issued and paid-up share capital is 1,354,590,080 shares, with a par value of USD 0.0005 per share, equivalent to RMB 4,637,000[97] - The company has a total of 175,517,429 shares held by KS&KL Investment Co. Limited, representing 12.96% of the issued shares[106] - The company’s major shareholder, King Sun Limited, also holds 175,517,429 shares, accounting for 12.96% of the issued shares[108] - The total shares held by the directors and major executives amount to 465,185,899 shares collectively[107] - The company’s shareholding structure indicates significant control by a few major shareholders, which may impact future strategic decisions[108] Employee Stock Option Plan - The employee stock option plan allows for the issuance of up to 32,507,627 shares, representing 5% of the total issued shares at the time, aimed at attracting and retaining top talent[117] - The management of the employee stock option plan is vested in the board or a committee authorized by the board, ensuring compliance with applicable laws and company regulations[118] - The total number of unexercised stock options as of the interim report date is 19,504,576, representing approximately 0.96% of the total issued shares[128] - The stock option plan is effective for ten years from July 12, 2019, unless terminated earlier by the shareholders or the board[132] - The employee stock option plan is designed to reward employees and promote the overall success of the group, aligning employee interests with company performance[116] Corporate Governance - The company has complied with all applicable corporate governance code provisions except for the separation of the roles of Chairman and CEO[146] - The audit committee reviewed the interim report and found the financial statements to be prepared in accordance with applicable accounting standards[148] - The board composition has changed with several new appointments and resignations during the reporting period[151][152] - The company has adopted a standard code for securities transactions by directors, and all directors confirmed compliance during the reporting period[145] Future Outlook - The Chinese IVD market is projected to reach RMB 278.7 billion by 2027, with a compound annual growth rate (CAGR) of 15.7% from 2021 to 2027[12] - The company is actively exploring business cooperation opportunities, including technology exchanges, to enhance its market competitiveness[16] - The company signed a strategic cooperation agreement with Sysmex in 2023 to deepen collaboration and revise distribution rights, transitioning to long-term distribution rights in specific regions[8]

Financial Performance - The company reported revenue of RMB 1,353,470,000 for the six months ended June 30, 2024, a decrease of 1.7% compared to RMB 1,377,314,000 in the same period of 2023[2]. - Profit for the period increased by 22.7% to RMB 127,566,000, up from RMB 104,002,000 in the previous year, primarily due to an increase in the gross margin of after-sales service[2]. - Adjusted profit attributable to the owners of the parent company was RMB 125,288,000, representing a 21.6% increase from RMB 103,009,000 in the prior year[3]. - Basic and diluted earnings per share increased to RMB 9.27 from RMB 7.62, reflecting a growth of 21.6%[6]. - Total comprehensive income for the period was RMB 127,758,000, compared to RMB 118,288,000 in the same period last year[5]. - Gross profit increased to RMB 324,692,000, representing a growth of 7.7% from RMB 301,540,000 in the previous year[39]. - Net profit for the period was RMB 127,566,000, an increase of 22.7% compared to RMB 104,002,000 in the same period last year[39]. - Adjusted net profit rose to RMB 127,790,000, reflecting an 8.9% increase from RMB 117,396,000 in the prior year[39]. - The gross margin improved to 24.0%, up 2.1 percentage points from 21.9%[38]. - The net profit margin increased to 9.4%, up 1.8 percentage points from 7.6%[38]. Revenue Breakdown - Revenue from the sale of medical equipment was RMB 87,616,000, down 38.6% from RMB 142,529,000 in the previous year[17]. - Revenue from the sale of medical consumables increased to RMB 1,170,596,000, up 1.2% from RMB 1,156,622,000 in the prior year[17]. - Revenue from after-sales services rose to RMB 95,258,000, an increase of 22% compared to RMB 78,163,000 in the previous year[17]. - Revenue from government subsidies was RMB 6,775,000, significantly higher than RMB 3,720,000 in the previous year, reflecting a 82.5% increase[18]. - Distribution business revenue accounted for 92.7% of total revenue, while after-sales service revenue increased by 21.9% to RMB 95,258,000, representing 7.0% of total revenue[44]. - The revenue from IVD analysis instruments in the distribution business decreased by 38.2% to RMB 87,032,000, while IVD reagents and other consumables revenue increased by 1.2% to RMB 1,170,596,000[45]. Assets and Liabilities - The company's total assets as of June 30, 2024, amounted to RMB 5,171,489,000, an increase from RMB 5,085,920,000 as of December 31, 2023[7]. - Current assets increased to RMB 3,522,083,000 from RMB 2,982,213,000, indicating a growth of 18.1%[7]. - The company's net asset value rose to RMB 3,436,885,000, up from RMB 3,385,889,000, reflecting a growth of 1.5%[8]. - Non-current liabilities decreased slightly to RMB 198,521,000 from RMB 200,041,000, showing a reduction of 0.8%[8]. - Non-current assets totaled RMB 1,766,561,000 as of June 30, 2024, slightly down from RMB 1,770,653,000 as of December 31, 2023[15]. - The debt-to-asset ratio as of June 30, 2024, was approximately 15.0%, an increase from 6.7% as of December 31, 2023[71]. Operational Highlights - The company continues to focus on enhancing its after-sales service business, which has contributed positively to its profit margins[2]. - The group has installed approximately 6,723 Sysmex coagulation analyzers in hospitals and medical institutions in China as of June 30, 2024[30]. - The group has a distribution network covering 31 provinces, municipalities, and autonomous regions in China, with 234 direct customers and 950 distributors as of June 30, 2024[31]. - The group incurred an operating loss of RMB 5,012,000 from its proprietary brand product development projects, which had no significant impact on overall financial performance[33]. - The company has established a joint venture with Carbon Cloud Intelligent for the development of molecular diagnostic reagents[33]. Employee and Governance - As of June 30, 2024, the group had a total of 815 employees, an increase from 779 employees as of June 30, 2023[74]. - Total employee compensation expenses amounted to RMB 66,402,000 for the reporting period, compared to RMB 62,898,000 for the six months ended June 30, 2023, reflecting an increase of approximately 8%[74]. - The company has adopted a competitive compensation system based on performance, with employees eligible for year-end bonuses and stock rewards[74]. - The board of directors has undergone changes, with new appointments and resignations during the reporting period[76]. - The company confirms compliance with the corporate governance code, with a clear division of responsibilities between the chairman and the CEO[77]. Future Outlook - The company plans to expand its product portfolio and distribution network to capture high growth potential in the IVD market[36]. - The company aims to enhance its R&D capabilities and accelerate the expansion of its proprietary brand product customer base, including AI-related projects[37]. - The Chinese IVD market is projected to reach RMB 278.7 billion by 2027, with a compound annual growth rate (CAGR) of 15.7% from 2021 to 2027[34].

Financial Performance - The company's total revenue for the year ended December 31, 2023, was RMB 3,088,387 thousand, an increase of 12.4% compared to RMB 2,748,809 thousand in 2022[21] - Net profit for the year grew by 21.3%, primarily due to increased revenue and the absence of certain expenses related to employee compensation and asset impairments that were present in the previous year[10] - Basic and diluted earnings per share for the year were RMB 17.62, compared to RMB 15.61 and RMB 15.50 in the previous year, respectively, reflecting a significant increase[3] - The company's total comprehensive income for the year was RMB 237,193 thousand, slightly down from RMB 237,615 thousand in 2022[3] - The adjusted net profit under non-GAAP was RMB 262,124,000, reflecting a 17.0% increase from RMB 224,052,000 in the previous year[63] - The group's profit before tax increased by 21.3% to RMB 237,126,000 compared to RMB 195,530,000 for the previous year[171] - The adjusted profit for the year was RMB 262,124,000, an increase of 17.0% compared to RMB 224,052,000 for the year ended December 31, 2022, primarily due to increased demand for IVD products as hospital operations gradually returned to normal post-COVID-19[176] Revenue Sources - Revenue from solution services provided to seven Chinese tertiary hospitals reached RMB 241,944,000, up 17.8% from RMB 205,406,000 in the previous year[39] - The distribution business generated revenue of RMB 2,898,390,000, accounting for 93.9% of total revenue, with a growth of 12.5% compared to the previous year[79] - Revenue from self-branded products in mainland China for the year 2023 was RMB 1,765,767 thousand, compared to RMB 1,769,320 thousand in 2022, indicating a decrease of about -0.3%[128] Financial Stability - Non-current liabilities decreased to RMB 200,041 thousand from RMB 215,649 thousand in the previous year, indicating improved financial stability[4] - The net asset value of the company increased to RMB 3,385,889 thousand from RMB 3,153,464 thousand in the previous year, showcasing growth in shareholder equity[4] - Total assets increased by 10.9% to RMB 4,785,052,000 from RMB 4,314,277,000, and equity attributable to owners of the parent rose by 6.1% to RMB 3,344,935,000 from RMB 3,153,386,000[71] - The debt-to-equity ratio remained stable at 0.1, indicating a consistent leverage position[71] - The debt-to-asset ratio as of December 31, 2023, was approximately 6.7%, down from 7.6% as of December 31, 2022[200] Cost Management - Financing costs decreased to RMB 21,040 thousand from RMB 30,580 thousand in the previous year, reflecting better cost management[22] - The cost of sales for the period was RMB 2,416,686,000, up 12.9% from RMB 2,140,668,000 for the year ended December 31, 2022, mainly due to increased sales[81] - The gross profit margin for the reporting period was 21.7%, a decrease of 0.4 percentage points compared to the previous year[60] - The gross profit margin for the period was 21.7%, a decrease from 22.1% for the year ended December 31, 2022, attributed to lower sales prices of IVD analyzers and increased service costs[89] Operational Insights - The company continues to focus on the sales and manufacturing of medical equipment and consumables, along with providing after-sales services, indicating a stable business model[26] - The company has established a distribution network covering 31 provinces, municipalities, and autonomous regions in China, with 332 direct customers and 1,164 distributors as of December 31, 2023[52] - The company aims to expand its product portfolio and distribution network to capture the high growth potential of the IVD market[61] - The company plans to enhance its R&D capabilities and accelerate the expansion of its proprietary brand product customer base[58] - The company intends to hire more sales personnel to manage the promotion and marketing of its solution services[57] Market Trends - The IVD market in China is projected to reach RMB 278.7 billion by 2027, with a compound annual growth rate (CAGR) of 15.7% from 2021 to 2027[50] - The coagulation analysis IVD market in China was valued at RMB 5 billion in 2021, with the top three market participants holding a combined market share of 77.7%[54] Employee and Administrative Expenses - The total employee benefit expenses, including salaries and wages, amounted to RMB 183,869 thousand, compared to RMB 177,517 thousand in the previous year, showing an increase of approximately 3.5%[132] - Administrative expenses rose by 4.6% to RMB 159,980,000 from RMB 152,917,000, primarily due to increased business activities as COVID-19 impacts diminished[167] Cash Flow and Liquidity - Cash and cash equivalents increased by 20.0% to RMB 1,224,786,000 from RMB 1,020,626,000[71] - Cash and cash equivalents increased to RMB 1,224,786,000 from RMB 1,020,626,000, indicating improved liquidity[101] - Trade receivables at the end of the reporting period amounted to RMB 532,158,000, a decrease from RMB 566,796,000 in the previous year[142] Research and Development - Research and development costs for the year were RMB 8,665 thousand, up from RMB 7,219 thousand in 2022, reflecting an increase of about 20%[132] - The company plans to enhance its R&D capabilities by investing in equipment and hiring experts, focusing on developing proprietary IVD products with market potential[92] Dividends - The company proposed a final dividend of HKD 0.06209 per share, subject to approval at the upcoming annual general meeting[99] - The proposed final dividend for the year is HKD 6.209 per share, an increase from HKD 5.556 per share in the previous year, representing an increase of approximately 11.7%[134]

Revenue and Profitability - The company's revenue for the reporting period was RMB 1,377,314,000, an increase of 17.1% compared to RMB 1,176,557,000 for the six months ended June 30, 2022, primarily due to increased demand for IVD products as hospital operations gradually returned to normal post-COVID-19[1] - Distribution business revenue reached RMB 1,293,002,000, accounting for 93.9% of total revenue, with a year-on-year increase of 17.8% from RMB 1,097,468,000[3] - The self-branded product business saw a significant increase of 241.0%, with revenue rising to RMB 6,149,000 from RMB 1,803,000[3] - The company's gross profit was RMB 301,540,000, representing a 13.2% increase from RMB 266,423,000 for the same period last year[17] - The group's net profit for the period was RMB 104,002,000, a 49.2% increase from RMB 69,701,000 in the previous year[37] - Adjusted net profit for the period was RMB 117,396,000, reflecting a 21.3% increase from RMB 96,773,000 year-on-year[38] - Profit attributable to equity holders of the parent company rose by 26.9% to RMB 103,009,000 from RMB 81,149,000[159] - The EBITDA for the period was RMB 191,864,000, representing a significant increase of 41.7% compared to RMB 135,442,000 in the prior year[186] Cost and Expenses - The gross profit margin for the reporting period was 21.9%, a decrease from 22.6% for the six months ended June 30, 2022, mainly due to increased service costs[22] - Sales costs increased by 18.2% to RMB 1,075,774,000 from RMB 910,134,000 in the previous year[11] - Sales and distribution expenses rose by 31.7% to RMB 60,568,000, attributed to increased marketing activities following the easing of COVID-19 impacts[29] - Administrative expenses decreased by 7.1% to RMB 71,933,000, primarily due to the absence of share-based payment expenses that occurred in the previous year[31] Cash Flow and Financial Position - As of June 30, 2023, the group's cash and cash equivalents amounted to RMB 1,248,799,000, up from RMB 1,020,626,000 at the end of 2022[42] - The total equity attributable to the company's owners was RMB 3,202,848,000, an increase from RMB 3,153,386,000 at the end of 2022[43] - The company recorded a net cash inflow from operating activities of RMB 131,125,000, a significant improvement compared to a net outflow of RMB 100,554,000 in the same period last year[123] - The company's debt-to-asset ratio was approximately 10.9% as of June 30, 2023, compared to 7.6% as of December 31, 2022[57] - The total liabilities decreased to RMB 216,741,000, indicating a stable financial position[115] Market and Business Development - The company plans to continue expanding its market presence and investing in new product development to meet growing customer demand[1] - The company plans to continue expanding its distribution business and improving distribution channels[73] - The company aims to enhance its customer base under the expanded distribution business, with an investment of RMB 52,400,000[73] - The group established a distribution network covering 31 provinces, municipalities, and autonomous regions in China, with 240 direct customers and 935 distributors as of June 30, 2023[167] - The company aims to enhance its R&D capabilities by investing in equipment and hiring experts, focusing on developing proprietary IVD products with market potential[182] Foreign Exchange and Other Income - Other income and gains increased by 1,276.7% to RMB 18,957,000, primarily due to an increase in foreign exchange gains[27] - The company recorded a net foreign exchange gain of RMB 12,730,000 during the reporting period, compared to a net foreign exchange loss of RMB 2,232,000 for the six months ended June 30, 2022[1] - The company experienced a foreign exchange loss of RMB 531,000, compared to a loss of RMB 2,795,000 in the same period last year[131] Inventory and Receivables - The company’s inventory increased to RMB 822,814,000 from RMB 628,622,000, indicating a rise of approximately 31%[112] - Trade receivables decreased to RMB 491,036,000 from RMB 566,796,000, a decline of about 13.3%[112] Future Outlook - The Chinese IVD market is expected to reach RMB 278.7 billion by 2027, with a compound annual growth rate of 15.7% from 2021 to 2027[175] - The compound annual growth rate (CAGR) for the Chinese coagulation analysis IVD first-level distribution market is projected to increase from 13.3% to 17.5% from 2021 to 2027, with expected sales revenue reaching RMB 15.7 billion by 2027[178]

[Financial Summary](index=1&type=section&id=Financial%20Summary) The company achieved robust performance growth in the first half of 2023, driven by increased demand for in-vitro diagnostic products and improved hospital operations | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 1,377,314 | 1,176,557 | 17.1% | | **Gross Profit** | 301,540 | 266,423 | 13.2% | | **Profit for the Period** | 104,002 | 69,701 | 49.2% | | **Profit Attributable to Owners of the Parent** | 103,009 | 81,149 | 26.9% | | **Adjusted Profit for the Period** | 117,396 | 96,773 | 21.3% | | **Adjusted Profit Attributable to Owners of the Parent** | 116,403 | 98,654 | 18.0% | | **Basic Earnings Per Share (RMB cents)** | 7.62 | 6.07 | Increase of 1.55 cents | - Revenue growth of **17.1%** was primarily driven by increased demand for in-vitro diagnostic (IVD) products from end-customers, benefiting from the gradual normalization of hospital operations post-COVID-19 pandemic[2](index=2&type=chunk) - Profit growth of **49.2%** was primarily driven by increased revenue and the absence of a **RMB 19.524 million** impairment loss on property, plant and equipment and intangible assets recognized in the prior period[14](index=14&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company's total revenue reached **RMB 1.377 billion** with gross profit of **RMB 302 million**, and profit for the period increased **49.2%** to **RMB 104 million**, primarily due to revenue growth and the absence of prior-period impairment losses | Item (RMB thousands) | H1 2023 | H1 2022 | | :--- | :--- | :--- | | **Revenue** | 1,377,314 | 1,176,557 | | **Cost of Sales** | (1,075,774) | (910,134) | | **Gross Profit** | 301,540 | 266,423 | | Selling and Distribution Expenses | (60,568) | (45,999) | | Administrative Expenses | (71,933) | (77,395) | | Other Expenses | – | (21,761) | | **Profit Before Tax** | 162,909 | 103,495 | | **Profit for the Period** | 104,002 | 69,701 | - Basic earnings per share attributable to owners of the parent increased to **7.62 RMB cents** from **6.07 RMB cents** in the prior period[6](index=6&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets increased **5.5%** to **RMB 4.554 billion**, primarily driven by current assets, with total equity rising to **RMB 3.204 billion** and a current ratio of **2.4 times** indicating strong liquidity | Item (RMB thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Non-current Assets** | 1,825,251 | 1,839,639 | | **Total Current Assets** | 2,728,417 | 2,474,638 | | **Total Assets** | 4,553,668 | 4,314,277 | | **Total Current Liabilities** | 1,133,008 | 945,164 | | **Total Non-current Liabilities** | 216,741 | 215,649 | | **Net Assets** | 3,203,919 | 3,153,464 | | **Equity Attributable to Owners of the Parent** | 3,202,848 | 3,153,386 | - Within current assets, inventories increased from **RMB 629 million** to **RMB 823 million**, and cash and cash equivalents rose from **RMB 1.021 billion** to **RMB 1.249 billion**[20](index=20&type=chunk) - Among current liabilities, interest-bearing bank borrowings increased from **RMB 329 million** to **RMB 497 million**[20](index=20&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview](index=16&type=section&id=Business%20Overview) The Group is a leading IVD product distributor in China, primarily serving as the exclusive distributor for Sysmex coagulation products, with operations spanning distribution, after-sales services, and an emerging, loss-making private label product business - The Group's core business is the distribution of IVD products, primarily through its wholly-owned subsidiary, Vista, as the exclusive national distributor of Sysmex Corporation's coagulation products in China since 1997[42](index=42&type=chunk)[179](index=179&type=chunk) - The Group's operations are segmented into three businesses: distribution, after-sales services, and private label products[153](index=153&type=chunk) - As of June 30, 2023, the Group's distribution network included **240** direct customers (hospitals and medical institutions) and **935** distributors, covering **31** provinces, municipalities, and autonomous regions across China[44](index=44&type=chunk) - The private label product business (mass spectrometry, microbiology, molecular diagnostics) remains in early-stage research, incurring an operating loss of **RMB 13.058 million** during the reporting period[46](index=46&type=chunk)[156](index=156&type=chunk) [Industry Overview and Business Outlook](index=18&type=section&id=Industry%20Overview%20and%20Business%20Outlook) The China IVD market is projected for high growth, reaching **RMB 278.7 billion** by 2027 with a **15.7% CAGR**, benefiting the Group as a leader in coagulation analysis IVD primary distribution with a **43.2%** market share, as it expands its product portfolio, distribution network, and R&D capabilities - According to Frost & Sullivan, China's IVD market size is projected to grow from 2021 to **RMB 278.7 billion** by 2027, at a compound annual growth rate (CAGR) of **15.7%**[47](index=47&type=chunk) - In 2021, Vista was the leader in China's coagulation analysis IVD primary distribution market, holding a **43.2%** market share[48](index=48&type=chunk) - Development strategies include expanding the product portfolio and distribution network, enhancing solution service capabilities, and increasing R&D to accelerate private label product expansion[49](index=49&type=chunk)[161](index=161&type=chunk)[186](index=186&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) The Group demonstrated strong financial performance with revenue growing **17.1%**, primarily driven by distribution and after-sales services, while net profit margin improved from **5.9%** to **7.6%** due to effective cost control and the absence of prior-period impairment losses Key Financial Ratios | Financial Ratio | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Gross Margin (%) | 21.9% | 22.6% | | Net Profit Margin (%) | 7.6% | 5.9% | | Current Ratio (times) | 2.4 | 2.6 | | Quick Ratio (times) | 1.7 | 2.0 | | Debt-to-Equity Ratio (times) | 0.2 | 0.1 | - Adjusted profit for the period was **RMB 117 million**, increasing **21.3%** year-on-year, primarily due to increased revenue, after excluding non-operating items such as property impairment and share-based payment expenses[66](index=66&type=chunk)[94](index=94&type=chunk) - As of June 30, 2023, cash and cash equivalents totaled **RMB 1.249 billion**, a **22.4%** increase from **RMB 1.021 billion** at the end of 2022[53](index=53&type=chunk)[95](index=95&type=chunk) [Revenue Analysis](index=22&type=section&id=Revenue%20Analysis) Total revenue increased **17.1%** to **RMB 1.377 billion**, primarily driven by **17.8%** growth in distribution business and **241.0%** growth in private label products, with IVD reagents and consumables accounting for nearly **90%** of product sales Revenue by Business Segment (RMB thousands) | Business Segment | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Distribution Business | 1,293,002 | 1,097,468 | 17.8% | | After-sales Services | 78,163 | 77,286 | 1.1% | | Private Label Product Business | 6,149 | 1,803 | 241.0% | | **Total** | **1,377,314** | **1,176,557** | **17.1%** | Revenue by Product Type (RMB thousands) | Product Type | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | IVD Analyzers | 142,529 | 124,326 | 14.6% | | IVD Reagents and Other Consumables | 1,156,622 | 974,945 | 18.6% | | **Total (Excluding Services)** | **1,299,151** | **1,099,271** | **18.2%** | [Gross Profit and Gross Margin Analysis](index=24&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20Analysis) Total gross profit increased **13.2%** to **RMB 302 million**, but overall gross margin slightly decreased from **22.6%** to **21.9%**, primarily due to a significant decline in after-sales service gross margin, despite improvements in distribution and private label businesses Gross Profit and Gross Margin by Business Segment | Business Segment | H1 2023 Gross Profit (RMB thousands) | H1 2023 Gross Margin (%) | H1 2022 Gross Profit (RMB thousands) | H1 2022 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Distribution Business | 266,693 | 20.6% | 216,907 | 19.8% | | After-sales Services | 30,379 | 38.9% | 48,388 | 62.6% | | Private Label Product Business | 4,468 | 72.7% | 1,128 | 62.6% | | **Total** | **301,540** | **21.9%** | **266,423** | **22.6%** | - The overall gross margin decline was primarily due to increased cost of services provided, leading to a decrease in after-sales service gross margin from **62.6%** to **38.9%**[60](index=60&type=chunk)[228](index=228&type=chunk) [Expense Analysis](index=26&type=section&id=Expense%20Analysis) Selling and distribution expenses increased **31.7%** due to increased marketing activities post-pandemic, while administrative expenses decreased **7.1%** due to the absence of prior-period share-based payment expenses, and finance costs declined **9.8%** due to reduced average bank borrowings - Selling and distribution expenses increased **31.7%** to **RMB 60.57 million**, driven by increased marketing activities as the impact of COVID-19 subsided[63](index=63&type=chunk) - Administrative expenses decreased **7.1%** to **RMB 71.93 million**, primarily due to the absence of **RMB 11.99 million** in share-based payment expenses recognized in the prior period[92](index=92&type=chunk) - Other expenses of **RMB 21.76 million** (primarily asset impairment) recognized in the prior period did not recur in the current period, positively impacting profit growth[64](index=64&type=chunk) [Supplementary Information](index=31&type=section&id=Supplementary%20Information) [Interim Dividend](index=32&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of **2.970 HK cents** per share for the six months ended June 30, 2023, an increase from **2.729 HK cents** in the prior period, payable on September 6, 2023 - The Board declared an interim dividend of **2.970 HK cents** per share, higher than **2.729 HK cents** per share in the prior period[106](index=106&type=chunk) - The record date for the dividend is August 25, 2023, with an expected payment date of September 6, 2023[106](index=106&type=chunk) [Corporate Governance](index=32&type=section&id=Corporate%20Governance) The company complied with most corporate governance code provisions, with the Audit Committee reviewing interim results without objection, and the combined roles of Chairman and CEO are deemed beneficial for strong and consistent leadership - The Audit Committee reviewed the interim results and confirmed their preparation in accordance with applicable accounting standards, with no objections to the accounting policies[110](index=110&type=chunk) - The roles of Chairman and Chief Executive Officer are both held by founder Mr. He Jucheng, an arrangement the Board believes facilitates effective and efficient decision-making and strategic planning, benefiting the Group as a whole[105](index=105&type=chunk)[218](index=218&type=chunk)

Business Expansion and Market Presence - The company has expanded its product portfolio under the "Hua Jian Ecosystem" project to cover over 500 products from 18 local IVD manufacturers and 6 foreign manufacturers[15]. - As of December 31, 2022, the company had 295 direct customers and 1,139 distributors, covering 1,599 tertiary hospitals in China[25]. - The Chinese IVD market is expected to reach RMB 278.7 billion by 2027, with a compound annual growth rate (CAGR) of 15.7% from 2021 to 2027[29]. - The company aims to expand its distribution network and hospital coverage as part of its business strategy in China[30]. - The company is expanding its market presence in D regions, aiming to capture E% of the market share by the end of the next fiscal year[74]. - The company aims to provide solutions for at least two new hospitals in 2023 to capitalize on market trends and opportunities[130]. - The product portfolio includes over 500 products from 18 local IVD manufacturers with independent intellectual property rights and 6 well-known foreign IVD manufacturers[128]. - The company has established strategic partnerships with renowned IVD manufacturers to enhance its product offerings and expand its distribution network[128]. Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million for the fiscal year, representing a Y% growth compared to the previous year[74]. - The group achieved revenue of RMB 2,748,809,000, representing a growth of 0.7% compared to the previous year[159]. - The company reported revenue of RMB 2,748,809,000 for the year ended December 31, 2022, an increase of 0.7% compared to RMB 2,730,670,000 in 2021[180]. - Net profit for the year increased by 20.9% to RMB 195,530,000, driven by an increase in gross margin and a reduction in employee compensation expenses related to the share incentive plan[181]. - Adjusted net profit for the year was RMB 224,052,000, representing a growth of 12.0% compared to RMB 200,048,000 in the previous year[186]. - The adjusted net profit attributable to the company's shareholders rose by 11.1% to RMB 228,504,000 from RMB 205,706,000 in 2021[186]. - Basic earnings per share increased to RMB 15.61 from RMB 13.19, while diluted earnings per share rose to RMB 15.50 from RMB 12.94[180]. - The board proposed a final dividend of RMB 66,206,000, equating to HKD 0.05556 per share, in recognition of the support from shareholders[35]. - The company proposed a final dividend of HKD 0.05556 per share for the year ended December 31, 2022[182]. Research and Development - The company plans to enhance its R&D capabilities through internal growth and acquisitions, focusing on mass spectrometry and microbiology analysis[34]. - Research and development expenditures increased by H%, reflecting the company's commitment to innovation and product development[74]. - The company has been actively seeking investment opportunities in high-tech and innovative local IVD manufacturers to expand its ecosystem[15]. Environmental Sustainability - The company aims to enhance its environmental sustainability by implementing energy-saving measures and reducing greenhouse gas emissions[184]. - The total greenhouse gas emissions (Scope 1 and 2) amounted to 965.93 tons of CO2 equivalent, an increase from 858.35 tons in the previous year[164]. - Direct greenhouse gas emissions (Scope 1) increased to 620.22 tons of CO2 equivalent from 526.45 tons in the previous year[164]. - Energy indirect greenhouse gas emissions (Scope 2) were reported at 345.71 tons of CO2 equivalent, up from 331.90 tons in the previous year[164]. - The total amount of harmless waste per million RMB of revenue decreased by approximately 50% compared to the previous year, reflecting improved employee awareness of waste reduction[192]. - Energy consumption density increased by approximately 2.17% compared to the previous year, primarily due to the recovery of business activities involving vehicle usage[198]. - The group is actively seeking opportunities to implement environmental measures to improve its environmental performance[156]. - The group has established internal control mechanisms to enhance environmental awareness among employees and comply with relevant laws and regulations[156]. Corporate Governance - The Group has complied with all disclosure requirements under the Listing Rules regarding related party transactions[45]. - The Board of Directors has confirmed compliance with the corporate governance code throughout the reporting period[55]. - The Group's audit committee reviewed the unaudited interim financial statements for the six months ending June 30, 2022[70]. - The audit committee is responsible for reviewing the Group's financial information and discussing accounting policies and practices with management and external auditors[71]. - The Group has established four board committees to oversee specific areas of governance[66]. - The Group's non-executive directors serve a term of three years, with the possibility of reappointment[61]. - The Group has implemented a framework for high-level corporate governance to protect shareholder interests and enhance corporate value[54]. - The Group has engaged Ernst & Young as its auditor to report on related party transactions in accordance with the Listing Rules[45]. Operational Efficiency - The company has implemented new strategies to improve operational efficiency, targeting a G% reduction in costs over the next year[74]. - Employee compensation expenses related to the share incentive plan decreased significantly from RMB 38,555,000 in 2021 to RMB 11,993,000 in the reporting period[181]. - The Group paid approximately RMB 3,664,000 in actual rent to the Xinhua Medical Group during the reporting period for properties leased in Shanghai and Jinan[43]. - The rental agreements are short-term leases with a duration not exceeding one year, involving fixed amounts plus utilities and management fees[43].

Financial Performance - For the year ended December 31, 2022, the group's net profit was RMB 195,530,000, an increase of 20.9% compared to RMB 161,750,000 for the year ended December 31, 2021[34]. - The group's adjusted profit for the year ended December 31, 2022, was RMB 224,052,000, up 12.0% from RMB 200,048,000 for the year ended December 31, 2021, primarily due to increased demand for IVD products and improved gross margins[36]. - Total comprehensive income for the year amounted to RMB 237,615,000, compared to RMB 146,796,000 in the previous year, indicating a significant increase[74]. - The company reported revenue of RMB 2,748,809,000 for the year ended December 31, 2022, representing a growth of 0.7% compared to RMB 2,730,670,000 in 2021[70]. - Adjusted net profit attributable to shareholders rose by 11.1% to RMB 228,504,000, compared to RMB 205,706,000 in 2021[68]. - Gross profit for the year ended December 31, 2022, was RMB 608,141,000, an increase of 7.4% from RMB 566,268,000 for the year ended December 31, 2021[55]. - The gross profit margin for the year ended December 31, 2022, was 22.1%, up from 20.7% for the year ended December 31, 2021[55]. Revenue and Sales - Revenue from customer contracts, including sales of goods and after-sales services, was RMB 2,575,382,000 in 2022, compared to RMB 2,584,320,000 in 2021[94]. - Revenue from IVD analysis instruments distribution business was RMB 360,620,000, down 7.1% from RMB 388,011,000 in the previous year[159]. - Revenue from IVD reagents and other consumables distribution business increased by 0.9%, totaling RMB 2,219,388,000 compared to RMB 2,199,776,000 in 2021[159]. - Revenue from distributors in the distribution business was RMB 2,171,726,000, accounting for 84.1% of total revenue, with a slight increase of 0.8% from RMB 2,154,139,000 in 2021[161]. - The revenue from solution services provided to clinical laboratories in hospitals was RMB 205,406,000 for the year ended December 31, 2022, a decrease of 0.7% compared to RMB 206,949,000 for the previous year[125]. Expenses and Costs - The group's administrative expenses decreased by 16.8% to RMB 152,917,000 for the year ended December 31, 2022, down from RMB 183,850,000 for the year ended December 31, 2021[32]. - The sales cost for the year ended December 31, 2022, was RMB 2,140,668,000, a decrease of 1.1% from RMB 2,164,402,000 in 2021, primarily due to lower purchase prices for IVD analysis instruments[163]. - The sales cost for the distribution business was RMB 2,067,379,000, representing 96.6% of total sales cost, a decrease of 0.9% from the previous year[164]. - The group's financing costs for the year ended December 31, 2022, were RMB 30,580,000, a 49.7% increase from RMB 20,422,000 for the year ended December 31, 2021, mainly due to rising bank borrowing rates[33]. Assets and Liabilities - The total equity attributable to the company's owners as of December 31, 2022, was RMB 3,153,386,000, an increase from RMB 2,978,865,000 as of December 31, 2021[40]. - The group's net current assets as of December 31, 2022, were RMB 1,529,474,000, an increase of RMB 153,570,000 from RMB 1,375,904,000 as of December 31, 2021[42]. - The company's capital reserve increased from RMB 2,974,233,000 in 2021 to RMB 3,148,749,000 in 2022, reflecting a growth of around 5.8%[78]. - The company reported a decrease in current liabilities to RMB 945,164,000 from RMB 1,155,899,000, improving its net current asset position[76]. - The company's non-current liabilities decreased slightly from RMB 218,050,000 in 2021 to RMB 215,649,000 in 2022, a reduction of approximately 1.8%[78]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.05556 per share for the year ended December 31, 2022, with an estimated total payout of approximately RMB 66,206,000 from the share premium account[21]. - The company plans to distribute a final dividend of HKD 0.05556 per share, subject to approval at the upcoming annual general meeting[70]. Corporate Governance and Compliance - The group has complied with the corporate governance code, except for the separation of the roles of chairman and CEO, which are held by the same individual[14]. - The company has maintained its compliance with International Financial Reporting Standards (IFRS) and has not reported any significant impacts from the adoption of revised standards during the year[87]. Market and Industry Insights - The IVD market in China is expected to reach RMB 278.7 billion by 2027, with a compound annual growth rate (CAGR) of 15.7% from 2021 to 2027[129]. - The coagulation analysis IVD market in China was valued at RMB 5 billion in 2021, with the top three market participants holding a combined market share of 77.7%[129]. - The group aims to expand its product portfolio and distribution network to capture the high growth potential of the IVD market[132]. Employee and Operational Metrics - As of December 31, 2022, the group employed 755 staff, an increase from 743 staff as of December 31, 2021[6]. - The total employee compensation expenses for the year ended December 31, 2022, amounted to RMB 177,517,000, a decrease from RMB 198,313,000 for the year ended December 31, 2021[6].

Financial Performance - The company reported revenue of RMB 1,176,557,000 for the six months ended June 30, 2022, a decrease of 0.9% compared to RMB 1,186,791,000 in the same period of 2021[14]. - Gross profit increased by 11.1% to RMB 266,423,000, up from RMB 239,889,000 year-on-year[14]. - Profit for the period decreased by 9.9% to RMB 69,701,000, down from RMB 77,361,000 in the previous year[14]. - Adjusted profit for the period was RMB 96,773,000, representing a 6.7% increase from RMB 90,683,000 in the same period last year[15]. - The company’s basic earnings per share increased to RMB 6.07, compared to RMB 5.96 in the previous year[14]. - The company’s diluted earnings per share rose to RMB 5.98, up from RMB 5.88 year-on-year[14]. - The company's revenue for the reporting period was RMB 1,176,557,000, a decrease of RMB 10,234,000 or 0.9% compared to the same period in 2021[28]. - Net profit for the period was RMB 69,701,000, down RMB 7,660,000 or 9.9% year-on-year[28]. - Adjusted profit for the period increased to RMB 96,773,000, representing a rise of RMB 6,090,000 or 6.7% compared to the previous year[29]. - Gross profit margin improved to 22.6%, an increase of 2.4 percentage points from 20.2% in the previous year[29]. Market and Business Development - The decrease in revenue was primarily due to reduced demand for IVD products amid COVID-19 related hospital closures and social distancing measures in mainland China[15]. - The company continues to expand its distribution network and product offerings, focusing on high-sensitivity chemiluminescence technology for early diagnosis of thrombosis[18]. - The company aims to stabilize its market share and profitability through a competitive and diversified product portfolio[17]. - The Chinese IVD market is expected to reach RMB 272.2 billion by 2026, with a compound annual growth rate (CAGR) of 20.5% from 2020 to 2026[22]. - The coagulation analysis IVD market in China was valued at RMB 4.6 billion in 2020, with the top three market participants holding a combined market share of 79.5%[23]. - The sales revenue from first-level distributors of coagulation analysis IVD products in China reached RMB 5.3 billion in 2020, with a projected CAGR of 13.3% from 2020 to 2026[24]. - The company aims to expand its product portfolio and distribution network to capture high growth potential in the IVD market[25]. - The company plans to enhance its solution service capabilities and promote its distribution business by hiring more sales personnel and acquiring IVD products from various brands[26]. - The company intends to invest more resources in R&D to improve its capabilities and develop market-potential self-branded IVD products[27]. - The company aims to strengthen its quality management and optimize the performance of self-developed products to enhance market competitiveness[27]. Revenue Breakdown - Distribution business revenue was RMB 1,097,468,000, a decrease of 2.4% from RMB 1,124,314,000 in the previous year[33]. - Revenue from maintenance services rose by 27.8% to RMB 77,286,000 compared to RMB 60,489,000 in the previous year[33]. - IVD analysis instruments revenue decreased by 25.2% to RMB 124,314,000 from RMB 166,153,000 in the previous year[35]. - Revenue from solution services provided to hospitals was RMB 72,987,000, a decrease of 24.7% compared to RMB 96,957,000 for the six months ended June 30, 2021, primarily due to reduced demand for IVD products amid COVID-19 restrictions[19]. - The revenue from self-branded products was RMB 1,803,000, a decrease of 9.3% compared to RMB 1,988,000 in the previous year[36]. - Revenue from the sale of medical equipment was RMB 124,326,000, down from RMB 166,296,000 in the previous year, indicating a decrease of about 25.3%[103]. - Revenue from the sale of medical consumables increased to RMB 974,945,000 from RMB 960,006,000, reflecting a growth of approximately 1.0%[103]. - The company’s total revenue from customer contracts was RMB 1,176,557,000, with the majority coming from sales to distributors at RMB 955,831,000[103]. Assets and Liabilities - Total assets as of June 30 amounted to RMB 4,502,688,000, reflecting a growth of 3.1% from RMB 4,367,361,000 at the end of 2021[30]. - Cash and cash equivalents increased by 18.1% to RMB 985,811,000 from RMB 834,626,000[30]. - The total equity attributable to the parent company was RMB 3,037,906,000 as of June 30, 2022, compared to RMB 2,978,865,000 as of December 31, 2021[57]. - The company's debt-to-asset ratio was approximately 15.8%, an increase from 9.4% as of December 31, 2021[67]. - Total non-current liabilities increased to RMB 500,999,000 as of June 30, 2022, compared to RMB 218,050,000 as of December 31, 2021, reflecting a significant rise[83]. - The company’s bank loans totaled RMB 710,937,000 as of June 30, 2022, compared to RMB 408,809,000 as of December 31, 2021, indicating an increase of 74%[120]. - The total amount of other payables and accrued expenses was RMB 206,221,000 as of June 30, 2022, a decrease from RMB 218,797,000 as of December 31, 2021[119]. Cash Flow - The net cash flow from operating activities for the six months ended June 30, 2022, was RMB (100,554,000), a decrease from RMB 20,642,000 in the same period of 2021[87]. - The net cash flow used in investing activities was RMB (14,093,000), compared to RMB (16,613,000) in the previous year[87]. - The net cash flow from financing activities increased to RMB 231,960,000 from RMB 89,096,000 year-over-year[87]. - The company raised RMB 870,833,000 in new bank loans, an increase from RMB 599,253,000 in the prior year[87]. - The company reported a decrease in cash flow from operating activities, indicating potential challenges in revenue generation[87]. Employee and Management - The total employee compensation expenses amounted to RMB 65.99 million for the reporting period, compared to RMB 64.14 million for the same period last year[72]. - The company has 739 employees as of June 30, 2022, an increase from 719 employees a year earlier[72]. - Total remuneration paid to key management personnel for the six months ended June 30, 2022, amounted to RMB 7,980,000, an increase from RMB 6,163,000 in the same period of 2021, representing a growth of approximately 13.2%[126]. - The total short-term employee benefits for key management personnel for the six months ended June 30, 2022, were RMB 6,025,000, compared to RMB 5,907,000 in the previous year, indicating a year-on-year increase of approximately 2%[126]. Corporate Governance - The company has complied with the corporate governance code, except for the separation of roles between the chairman and CEO[176]. - The audit committee reviewed the interim report, confirming that the financial statements were prepared in accordance with applicable accounting standards[178]. - The company established a strategic and investment committee during the reporting period to enhance governance and decision-making[174].

Financial Performance - The company reported revenue of RMB 2,730,670,000 for the year ended December 31, 2021, representing a 12.5% increase compared to RMB 2,428,210,000 in 2020[20] - Gross profit increased to RMB 566,268,000, up 18.9% from RMB 476,165,000 in the previous year[20] - Net profit for the year rose by 4.6% to RMB 161,750,000, compared to RMB 154,618,000 in 2020[20] - Adjusted net profit was RMB 200,048,000, reflecting a 19.0% increase from RMB 168,047,000 in the prior year[21] - The adjusted profit attributable to equity holders of the parent company increased by 19.5% to RMB 205,706,000 from RMB 172,147,000 in 2020[24] - Basic earnings per share increased to RMB 13.19, up 10.6% from RMB 11.93 in the previous year[20] - The distribution business generated revenue of RMB 2,584,320,000, accounting for 94.7% of total revenue, with a growth of 12.9%[48] - Total gross profit increased by 22.0% to RMB 499,349,000 in 2021, up from RMB 409,204,000 in 2020, with an overall gross margin of 19.3%[57] Revenue Growth Drivers - The growth in revenue was primarily driven by the recovery in demand for in vitro diagnostic (IVD) products as the impact of COVID-19 lessened[20] - The increase in profit was also attributed to a rise in gross margin and the absence of share option expenses of RMB 17,906,000 recorded in the previous year[21] - Revenue from solution services provided to clinical laboratories reached RMB 206,949,000, a 50.7% increase from RMB 137,292,000 in the previous year[34] - Revenue from IVD reagents and other consumables accounted for 85.0% of total revenue, increasing by 25.0% to RMB 2,199,776,000 from RMB 1,759,253,000 in 2020[49] Market Expansion and Strategy - The company has expanded its product portfolio to over 500 products from 14 local IVD manufacturers and 5 well-known foreign IVD manufacturers as part of the "Hua Jian Ecosystem" project[27] - The company aims to double the revenue generated from the four types of thrombus markers by 2022 compared to 2021[29] - The Chinese IVD market is projected to reach RMB 272.2 billion by 2026, with a compound annual growth rate (CAGR) of 20.5% from 2020 to 2026[29] - The company plans to provide solution services to at least two new hospitals in 2022 to enhance its distribution business[30] - The company plans to continue expanding its market presence and enhancing its product offerings in response to the recovering demand[55] Corporate Governance and Management - The company emphasizes the importance of independent oversight in its management through its audit committee and other governance structures[95][96] - The board includes members with diverse backgrounds in finance, healthcare, and safety management, enhancing the company's strategic decision-making capabilities[95][97] - The management team is committed to leveraging their extensive industry experience to drive the company's growth and innovation[93][96] - The board believes it has adhered to the corporate governance code throughout the reporting period, except for one specific provision[188] Employee Compensation and Stock Options - Employee compensation expenses related to the share award plan amounted to RMB 38,555,000 during the reporting period[21] - Total employee compensation expenses for the year amounted to RMB 198,313,000, an increase from RMB 136,025,000 for the year ended December 31, 2020[83] - The employee stock option plan allows for the issuance of up to 32,507,627 shares with a par value of $0.0005 each[148] - The employee stock option plan is designed to attract and retain top talent, providing additional incentives to employees, senior executives, and directors[146] Related Party Transactions - The company has been leasing properties for office and dormitory purposes from the founding group, with specific properties listed and their respective rental amounts detailed[171] - The company has engaged in non-exempt continuing connected transactions under the Listing Rules, specifically related to property leases[171] - The independent non-executive directors confirmed that the related party transactions were conducted in the ordinary course of business and on normal commercial terms[176] Shareholder Information - The board proposed a final dividend of HKD 0.05284 per share, subject to shareholder approval, with a total payout of approximately RMB 58,004,000 from the share premium account[113] - The group’s share premium account balance was approximately RMB 2,415,733,000, with an expected remaining balance of about RMB 2,357,729,000 after the proposed dividend[113][116] - The company has maintained at least 25% of its issued share capital held by the public as of December 31, 2021, in compliance with listing rules[180] Future Outlook - The company plans to invest in research for mass spectrometry reagents and microbiological analyzers through newly acquired companies and partnerships[31] - The company plans to enhance its solution service capabilities by providing services to two new hospitals in 2022[40] - The company is focused on maintaining high standards of corporate governance and compliance with financial regulations[95]

Financial Performance - The company reported revenue of RMB 1,186,791,000 for the six months ended June 30, 2021, representing a 20.9% increase compared to RMB 981,240,000 in the same period of 2020[4]. - Gross profit for the same period was RMB 239,889,000, up 23.5% from RMB 194,179,000 year-on-year[4]. - Net profit for the period surged 114.3% to RMB 77,361,000, compared to RMB 36,092,000 in the previous year[4]. - Adjusted net profit attributable to the parent company was RMB 90,683,000, reflecting a 47.0% increase from RMB 61,674,000 in 2020[6]. - The company’s basic earnings per share increased to RMB 5.96, up from RMB 2.87, marking a significant rise of 107.5%[4]. - The gross profit margin improved to 20.2%, up 0.4 percentage points from 19.8% in the previous year[19]. - Profit for the period increased significantly by 114.3% to RMB 77,361,000 from RMB 36,092,000 for the six months ended June 30, 2020, driven by recovering demand for IVD products and improved gross margins[41]. - Adjusted profit for the period rose by 47.0% to RMB 90,683,000 from RMB 61,674,000 for the six months ended June 30, 2020, reflecting the recovery in IVD product demand[42]. Revenue Sources - The increase in revenue was primarily driven by the recovery in demand for IVD products as the impact of COVID-19 diminished[5]. - Revenue from solution services provided to hospitals reached RMB 96,957,000, an increase of 80.8% compared to RMB 53,630,000 for the same period in 2020[9]. - Distribution business revenue was RMB 1,124,314,000, a growth of 23.2% from RMB 912,447,000[23]. - Revenue from IVD reagents and other consumables in the distribution business increased by 42.4% to RMB 958,161,000[25]. - Revenue from distributors in the distribution business was RMB 922,679,000, accounting for 82.0% of total revenue, with a year-on-year increase of 18.2%[26]. - Revenue from hospitals and medical institutions in the distribution business rose by 50.6% to RMB 144,491,000, representing 12.8% of total revenue[26]. - Revenue from the sale of medical equipment and consumables was RMB 1,126,296,000, compared to RMB 913,185,000 in the previous year, indicating a growth of about 23.4%[89]. Market Position and Strategy - The distribution business remains the cornerstone of the company, focusing on IVD products sold to distributors, hospitals, and medical institutions[8]. - The company has maintained exclusive distribution rights for certain products since 1997, enhancing its market position in China[8]. - The company plans to continue expanding its product offerings and distribution network to capture a larger market share[7]. - The company plans to expand its product portfolio and distribution network to capture high growth potential in the IVD market[15]. - The company aims to enhance its solution service capabilities and expand its distribution business by providing centralized procurement services and after-sales support[16]. - The company intends to invest more resources in R&D to improve its self-owned brand IVD products and enhance product quality management[17]. - The company aims to penetrate the mid-to-low-end market by offering high cost-performance self-owned brand products[17]. Employee and Compensation - Employee compensation expenses related to the share incentive plan amounted to RMB 13,322,000 during the reporting period, impacting overall profitability[5]. - The total employee compensation expenses amounted to RMB 64,143,000 for the reporting period, compared to RMB 60,474,000 for the same period last year, reflecting an increase of approximately 2.8%[61]. - The group has granted a total of 32,507,627 and 26,668,000 stock options under the employee stock option plan and stock option plan, respectively[58]. - The total remuneration paid to key management personnel was RMB 6,163,000 in the first half of 2021, compared to RMB 32,749,000 in the same period of 2020, indicating a decrease of approximately 81.12%[117]. Financial Position - The company’s total assets increased by 8.8% to RMB 4,251,208,000 compared to RMB 3,907,096,000 at the end of December 2020[20]. - Cash and cash equivalents rose by 10.8% to RMB 873,565,000 from RMB 788,613,000[20]. - The debt-to-asset ratio as of June 30, 2021, was approximately 12.7%, compared to 10.2% as of December 31, 2020[55]. - The company’s total equity as of June 30, 2021, was RMB 4,632,000,000, compared to RMB 4,534,000,000 as of December 31, 2020, indicating a growth of 2.2%[111]. - The company reported a significant increase in other receivables, which rose to RMB 414,917,000 as of June 30, 2021, from RMB 235,567,000 as of December 31, 2020, representing a 76.2% increase[103]. Shareholder Information - As of June 30, 2021, the total shares held by KS&KL Investment Co. Limited and King Sun Limited are 175,517,429 shares each, representing approximately 12.97% of the company's equity[124][128]. - Lucan Investment Limited holds 112,664,041 shares, accounting for approximately 8.33% of the company's equity[128]. - The company has a structured ownership with significant stakes held by controlled corporations and private equity firms[130][131]. - The data reflects the ownership structure and potential influence of major shareholders on company decisions and strategies[128]. Corporate Governance - The audit committee, consisting of three independent non-executive directors, reviewed the interim report for the six months ending June 30, 2021, and found no objections to the accounting treatment adopted by the company[165]. - The company has complied with all applicable corporate governance code provisions during the reporting period, except for the separation of roles between the chairman and CEO[164]. - The company has adopted the standard code for securities transactions by directors and confirmed compliance throughout the reporting period[163].