Core Viewpoint - The company reported a decline in revenue and profit for the fiscal year ending December 31, 2024, with a focus on improving market accessibility and product approvals despite challenging market conditions [1][2]. Group 1: Financial Performance - The company's revenue for the year was HKD 57.73 billion, a decrease of 10.67% year-on-year [1]. - Shareholders' profit was HKD 10.61 billion, down 19.53% compared to the previous year [1]. - Basic earnings per share were HKD 0.3582, with a proposed final dividend of HKD 0.095 per share [1]. Group 2: Product Approvals and Market Access - The company successfully completed the market access for 44 generic names and 56 specifications, with significant approvals in various provinces [2]. - The company participated in over a thousand bidding activities, achieving notable success in national and regional procurement initiatives [2]. - The company has 162 products listed in the national medical insurance directory, with new products successfully entering the 2024 updated directory [2]. Group 3: Business Segments Performance - The infusion and ampoule water products maintained stable performance, with total sales volume reaching 2.036 billion bottles (bags), a year-on-year increase of 6.7% [3]. - Sales revenue for infusion products was HKD 37.35 billion, a decrease of 7.6% due to market demand and pricing pressures [3]. - The oral formulation segment saw significant growth, with sales revenue reaching approximately HKD 5.02 billion, up about 4.9% year-on-year [4]. Group 4: Raw Material Drug Segment - The raw material drug segment experienced a sales revenue decline of 11.7%, totaling approximately HKD 7.85 billion [4]. - Caffeine sales volume increased by about 44% to 5,478 tons, while sales of metronidazole decreased by 43% [4]. - The company anticipates a stabilization and recovery in the raw material drug business in the coming year [4].

Financial Performance - In 2024, the company achieved a total sales revenue of approximately RMB 5.266 billion, a decrease of 9.6% year-on-year; in HKD, the revenue was about HKD 5.773 billion, down 10.7% year-on-year, with a gross profit margin of 50.4%, a decline of 5.6 percentage points [3]. - The net profit for 2024 was approximately HKD 1.061 billion, representing a year-on-year decrease of 19.5% [3]. - The company's revenue for the year ended December 31, 2024, was HKD 5,773,251, a decrease of approximately 10.7% compared to HKD 6,463,009 in 2023 [20]. - Gross profit for 2024 was HKD 2,908,262, down from HKD 3,619,639 in 2023, indicating a decline of about 19.6% [20]. - The operating profit decreased to HKD 1,343,500 in 2024 from HKD 1,638,901 in 2023, reflecting a reduction of approximately 17.9% [20]. - The total comprehensive income for the year 2024 was HKD 877,973, down from HKD 1,202,341 in 2023, indicating a decline of approximately 27% [21]. - Basic earnings per share for 2024 were HKD 0.3582, compared to HKD 0.4441 in 2023, reflecting a decrease of about 19.4% [21]. - The company's profit before tax for 2024 was HKD 1,281,603,000, a decrease of 19.1% from HKD 1,583,569,000 in 2023 [44]. - The actual tax expense for 2024 was HKD 205,995,000, down 19.0% from HKD 254,281,000 in 2023 [44]. - Profit attributable to equity holders decreased by 19.5% to HKD 1,061,150,000 for the year ending December 31, 2024, with a net profit margin dropping from 20.4% to 18.4% [68]. Dividend and Shareholder Returns - The company declared a final dividend of HKD 0.095 per share, with a total annual dividend of HKD 0.175 per share, an increase of 2.9% year-on-year [4]. - The company proposed a final dividend of HKD 0.095 per share for 2024, down from HKD 0.100 per share in 2023 [51]. - The total dividend declared for 2024 was HKD 517,844,000, slightly up from HKD 504,807,000 in 2023 [51]. - The company has adopted a dividend policy to consider paying two dividends annually, with an interim dividend of HKD 0.08 per share declared for the year ending December 31, 2024, compared to HKD 0.07 per share in 2023 [85]. Market and Product Development - The company completed 44 generic names and 56 specifications for market access approvals in 2024, with 13 generic names and 14 specifications approved in over 30 provinces [6]. - The company actively expanded its market presence through strategic partnerships and product innovation in the pharmaceutical packaging materials sector, enhancing market penetration and coverage [9]. - The company achieved an export volume of approximately 118 million bottles (bags) in 2024, representing an 11% year-on-year growth, with export sales amounting to approximately HKD 178 million, a 9% increase year-on-year [10]. - The company has submitted 131 product approval applications, including 76 for new liquid and solid formulations and 27 for raw materials, with several products being the first of their kind in the domestic market [12]. - The company has successfully passed consistency evaluations for 117 varieties and 156 specifications, enhancing its product structure and market accessibility [14]. - The company is actively developing innovative drugs, with its self-developed Class I new drug SYN045 currently undergoing Phase I clinical trials [12]. Research and Development - Research and development costs for 2024 were HKD 466,925,000, slightly decreased from HKD 471,076,000 in 2023 [40]. - The company has applied for 88 patents and was granted 51 patents in 2024, with a total of 552 patent applications and 340 granted patents to date [14]. - The company has made significant progress in the development of complex formulations, establishing technology platforms for sustained release and lipid-based formulations [13]. - Research and development costs were approximately HKD 265,969,000, a decrease of 8.2% from HKD 289,748,000 in 2023, due to savings in raw materials and other direct R&D costs [64]. Financial Position and Assets - Non-current assets increased to HKD 7,542,759 thousand in 2024 from HKD 6,842,219 thousand in 2023, representing a growth of approximately 10.3% [22]. - Current liabilities decreased significantly from HKD 2,521,440 thousand in 2023 to HKD 1,820,950 thousand in 2024, a reduction of about 27.8% [22]. - Total assets less current liabilities rose to HKD 10,782,730 thousand in 2024, up from HKD 9,444,896 thousand in 2023, indicating an increase of approximately 14.2% [22]. - Non-current liabilities increased to HKD 3,247,080 thousand in 2024, compared to HKD 2,176,204 thousand in 2023, reflecting a growth of around 49.3% [23]. - The company's total equity reached HKD 7,535,650 thousand in 2024, up from HKD 7,268,692 thousand in 2023, marking an increase of approximately 3.7% [23]. - The company's cash and cash equivalents decreased from HKD 1,615,208 thousand in 2023 to HKD 1,257,702 thousand in 2024, a decline of about 22.1% [22]. - Inventory levels increased slightly from HKD 1,086,282 thousand in 2023 to HKD 1,109,462 thousand in 2024, representing a growth of approximately 2.1% [22]. - Trade receivables rose to HKD 2,226,355 thousand in 2024 from HKD 2,177,050 thousand in 2023, an increase of about 2.3% [22]. Corporate Governance and ESG - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange rules, except for the separation of the roles of Chairman and CEO, which are held by the same individual, Mr. Qu Jiguang [82]. - The company emphasizes the importance of environmental sustainability and social responsibility, integrating ESG considerations into daily operations [83]. - The company acknowledges the increasing focus of investors and stakeholders on ESG matters and aims to operate responsibly and sustainably [83]. Operational Efficiency - Sales and distribution costs significantly reduced by 25.4% to HKD 1,143,425,000, reflecting improved efficiency in sales channels and increased sales through centralized procurement [62]. - The company incurred a financial cost of HKD 126,881,000 in 2024, slightly higher than HKD 125,413,000 in 2023 [39]. - The net financial costs for the year ending December 31, 2024, increased by 2.8% to HKD 88,390,000 compared to HKD 85,942,000 in 2023 [66]. Future Outlook - The company aims to achieve a sales volume target of 2.15 billion infusion products by 2025, representing a growth of about 6% compared to 2024 [16]. - The group plans to strengthen its clinical business team and focus on the market development of several key products, including Azithromycin tablets and others, to enhance market presence [16]. - The company targets a revenue growth rate of 20% for its raw material drug segment by 2025, focusing on high-value specialty products [17]. - The group aims to obtain 98 various national approvals by 2025, including 33 for liquid formulations and 26 for solid formulations [18].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 5.30 [1] Core Views - The company's 1-9M24 revenue was HKD 4.534 billion (-4.7% YoY), with a net profit of HKD 919 million (-2.8% YoY) [2] - The decline in revenue was attributed to stable growth in the large infusion sector but was offset by the impact of centralized procurement on ASP and a one-time impact from a specific product [2] - The net profit margin improved by 0.4 percentage points YoY due to optimized sales expenses [2] - The report expects the company's 2024 net profit to be HKD 1.35 billion, driven by seasonal demand in the large infusion sector and stabilized raw material prices [2] Large Infusion Sector - The large infusion sector generated HKD 2.97 billion in revenue (-1% YoY) in 1-9M24, with a 13.4% YoY increase in sales volume but a 12.7% YoY decline in ASP due to centralized procurement [3] - The sector is expected to grow steadily in 2024, with sales exceeding 2.2 billion bottles/bags, driven by seasonal demand, increased capacity utilization, and the expansion of high-margin products like peritoneal dialysis fluid [3] Raw Material Sector - The raw material sector reported HKD 598 million in revenue (-6.6% YoY) in 1-9M24, with caffeine prices stabilizing and azithromycin expected to see both volume and price increases in 2024 [4] - The ampoule sector saw a significant revenue decline (-30.5% YoY) due to a one-time impact but is expected to recover with HKD 700 million in revenue in 2024 [4] Solid Formulation Sector - The solid formulation sector achieved HKD 339 million in revenue (+5.3% YoY) in 1-9M24, with expected revenue of HKD 500 million in 2024 due to new product approvals and the deepening of the raw material/formulation integration strategy [4] Financial Forecasts and Valuation - The company's 2024/2025/2026 EPS is forecasted to be HKD 0.46/0.53/0.59, with a target price of HKD 5.30 based on a 10x PE ratio for 2025 [5] - Revenue is expected to grow from HKD 6.528 billion in 2024E to HKD 8.386 billion in 2026E, with net profit increasing from HKD 1.354 billion in 2024E to HKD 1.744 billion in 2026E [1][5] - ROE is projected to remain stable around 18.45%-18.84% from 2024E to 2026E [1]

Financial Performance - In the first half of 2024, the company achieved sales revenue of approximately RMB 3.034 billion, a year-on-year increase of about 2.4%[3] - The net profit for the same period was approximately HKD 686 million, reflecting a year-on-year growth of about 7.4%[3] - For the six months ended June 30, 2024, the total revenue was HKD 3,338,939,000, a slight increase of 0.2% compared to HKD 3,333,157,000 in the same period last year[24] - Operating profit for the six months ended June 30, 2024, was HKD 849,283,000, an increase of 7.2% from HKD 792,484,000 in the previous year, resulting in an operating profit margin of 25.4%[32] - The profit attributable to equity holders increased by 7.4% to HKD 685,737,000 for the six months ended June 30, 2024, compared to HKD 638,611,000 for the same period last year, with a net profit margin rising from 19.2% to 20.5%[35] - Basic earnings per share rose to HKD 0.2312, compared to HKD 0.2149 in the prior year, indicating a growth of approximately 10.9%[68] - Total comprehensive income for the period was HKD 630,292, significantly higher than HKD 387,537 in the same period last year, marking an increase of around 62.5%[68] Dividends and Shareholder Returns - The interim dividend declared is HKD 0.08 per share, representing a year-on-year increase of 14.3%[3] - The interim dividend declared is HKD 0.08 per share, totaling approximately HKD 237,523,000, up from HKD 0.07 per share last year[36] - The company declared an interim dividend of HKD 0.08 per ordinary share on August 28, 2024[124] Sales and Market Expansion - Sales volume of mannitol injection reached 21.07 million bottles (bags), a year-on-year increase of 70%[5] - Oral formulation sales volume reached 800.9 million pieces (tablets, bags), with a year-on-year growth of 8%[6] - The company added 32 new international customers for raw materials, expanding its customer base in Europe, America, and Asia[7] - The company aims to enhance its formulation development advantages by improving marketing management systems and expanding market share in key product categories such as infusion and oral formulations[13] - The company plans to accelerate the transformation of new products and optimize processes to enhance quality and reduce costs, targeting markets in the Americas, Europe, South Asia, and Southeast Asia for key raw materials like caffeine and azithromycin[14] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[72] Product Development and Innovation - The group approved 43 new products in the first half of the year, including 29 formulations and 14 active pharmaceutical ingredients (APIs) [8] - The group reported a significant increase in the proportion of high-end complex formulations among the approved products, enhancing its innovation influence in the industry [8] - The group has completed the integrated development of linezolid, with various formulations including linezolid sodium chloride injection and linezolid dry suspension, improving market accessibility for pediatric pneumonia treatment [9] - The group has received approval for 14 specialty APIs, enhancing its coverage in the emergency drug market, with key products like isoproterenol and norepinephrine [10] - The innovative drug SYN045 for pulmonary arterial hypertension has entered Phase I clinical trials, expected to conclude by the end of 2024, showing promising safety and tolerance [10] - A total of 45 patents were filed in the first half of the year, with 30 being invention patents, reflecting the group's commitment to innovation [11] - The company is committed to maintaining a strong innovation momentum and aims to achieve breakthroughs in high-end complex formulations and innovative drugs[15] Financial Position and Cash Flow - Cash and cash equivalents slightly decreased by 3.1% to HKD 1,564,535,000 as of June 30, 2024, compared to HKD 1,615,208,000 at the end of 2023[37] - Bank borrowings increased by 7.1% to HKD 3,607,505,000 as of June 30, 2024, from HKD 3,368,141,000 at the end of 2023[37] - The capital-to-debt ratio rose to 22.0% as of June 30, 2024, up from 20.2% at the end of 2023, due to increased bank borrowings[37] - Operating cash generated for the six months ended June 30, 2024, was HKD 615,165,000, a decrease of 7% from HKD 661,515,000 in the same period of 2023[74] - Net cash generated from operating activities was HKD 322,918,000, down 30% from HKD 463,601,000 year-on-year[74] - The company reported a net cash outflow from financing activities of HKD 69,013,000, compared to HKD 24,710,000 in the previous year, indicating increased financing costs[76] Risks and Market Environment - The company has established a dedicated team to manage the risks associated with national drug procurement and has obtained more product registrations to qualify for tenders[18] - The company recognizes the importance of maintaining good relationships with suppliers and customers to achieve both short-term and long-term goals[20] - The company is actively monitoring changes in the Chinese pharmaceutical market environment and is prepared to respond to any adverse impacts[20] Corporate Governance and Compliance - The company has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions during the six months ending June 30, 2024[62] - The roles of Chairman and CEO are held by Mr. Qu Jiguang, which the board believes is in the best interest of the company for effective strategy execution[62] Share Options and Equity - As of June 30, 2024, the total number of unexercised stock options under the 2012 stock option plan remains at 100,000,000, with a weighted average exercise price of HKD 4.218[44] - The company anticipates receiving proceeds of HKD 421,800,000 if all unexercised stock options as of June 30, 2024, are exercised[44] - The total number of stock options available for issuance under the 2023 stock option plan as of June 30, 2024, is 297,268,338, representing approximately 10.01% of the company's issued shares[46] - The company has a limit of 1% of the total issued shares for stock options granted to each eligible participant within any 12-month period, unless otherwise approved by shareholders[46] Legal and Regulatory Matters - The company has been found in violation of bidding terms related to the procurement of a specific injection solution, leading to a temporary suspension from national procurement eligibility for six months[124]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][18]. Core Views - The company demonstrated stable performance in H1 2024, with revenue of HKD 3.339 billion (+0.2%) and net profit of HKD 686 million (+7.4%) [5][8]. - The large-volume infusion segment showed significant growth, with revenue reaching HKD 2.185 billion (+5.6%) and sales volume of 1.139 billion bags (+21.7%) [8][9]. - The company is in a phase of intensive approval for formulation varieties, which is expected to support stable growth in the future [17]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of HKD 3.339 billion (+0.2%) and net profit of HKD 686 million (+7.4%), with a gross margin of 55.2% (-3.1pp) and a net margin of 20.5% (+1.4pp) [5][8]. - The sales expense ratio decreased to 22.7% (-4.9pp), while the management expense ratio increased slightly to 4.2% (+0.1pp) [5][8]. Business Segments - The large-volume infusion business generated revenue of HKD 2.185 billion (+5.6%), accounting for 65.4% of total revenue [8][9]. - The ampoule injection segment faced short-term pressure, with revenue declining to HKD 367 million (-19.0%) due to price reductions in collective procurement products [8][9]. - The raw material segment reported revenue of HKD 399 million (-12.1%), primarily due to low caffeine prices [8][9]. Research and Development - The company achieved significant R&D results in H1 2024, with 29 formulation varieties approved, including 18 injectable and 11 oral formulations [17]. - The innovative drug SYN-045 for pulmonary arterial hypertension has entered Phase I clinical trials, and the anti-liver fibrosis drug ADN-9 is expected to apply for Phase I trials soon [17]. Profit Forecast - The profit forecast for 2024-2026 has been adjusted, with expected revenues of HKD 65.32 billion, HKD 70.86 billion, and HKD 76.85 billion, reflecting a growth rate of 1.07%, 8.47%, and 8.46% respectively [17]. - The forecasted net profit for the same period is HKD 13.41 billion, HKD 14.98 billion, and HKD 16.51 billion, with growth rates of 1.71%, 11.69%, and 10.22% respectively [17].

Financial Performance - In the first half of 2024, the company achieved sales revenue of approximately RMB 3.034 billion, a year-on-year increase of about 2.4%[3] - The net profit for the first half of 2024 was approximately HKD 686 million, representing a year-on-year growth of about 7.4%[3] - The company declared an interim dividend of HKD 0.08 per share, an increase of 14.3% compared to the previous year[3] - The company reported a revenue of HKD 3,338,939 thousand for the six months ended June 30, 2024, compared to HKD 3,333,157 thousand in the same period of 2023, showing a slight increase[15] - Gross profit for the same period was HKD 1,843,455 thousand, down from HKD 1,944,751 thousand year-on-year, indicating a decrease of approximately 5.2%[15] - Operating profit increased to HKD 849,283 thousand from HKD 792,484 thousand, reflecting a growth of about 7.2%[15] - The company reported a net profit of HKD 697,786 thousand for the first half of 2024, compared to HKD 649,505 thousand in the same period of 2023, representing an increase of approximately 7.4%[15] - The total comprehensive income attributable to equity holders of the company for the period was HKD 620,566,000, a significant increase of 60.1% from HKD 387,382,000 in the previous year[17] - Basic earnings per share for the period was HKD 0.2312, up from HKD 0.2149, reflecting a growth of 7.3%[17] Sales and Revenue Breakdown - The intravenous infusion and other products generated sales revenue of HKD 3.244 billion, accounting for 97.2% of total revenue, with a slight increase from the previous year[4] - The sales volume of intravenous products reached 1.139 billion bottles (bags), a year-on-year increase of 21.7%[5] - The sales revenue from the ampoule injection business was HKD 367 million, a year-on-year decrease of 19.1%, despite a sales volume increase of 27%[6] - Oral formulations achieved sales of 80.09 million tablets (pieces, bags), a year-on-year increase of 8%, with notable growth in specific products like cefdinir capsules, which saw a 33.7% increase in sales volume[6] - The therapeutic infusion products achieved a sales volume of 149 million bottles (bags), a year-on-year increase of 34%[5] - Revenue from pharmaceutical sales was HKD 3,226,372,000, showing a marginal increase from HKD 3,225,011,000 year-on-year[23] - Revenue from sales in China was HKD 3,002,085,000, a slight decrease from HKD 3,013,522,000 in the previous year[23] Product Development and Innovation - The group received approvals for 43 new products, including 29 formulations and 14 APIs, with a significant increase in high-end complex formulations[9] - The group has completed the development of 94 products with 126 specifications that have passed or are deemed to have passed consistency evaluation, enhancing its market competitiveness[10] - The group’s new product development includes 14 approved specialty APIs, strengthening its market presence in emergency drug raw materials[10] - The group’s new product highlights include pen-type injectors and high-permeability cell culture bags, contributing to a sales increase of 4.9% in the pharmaceutical packaging business[8] - The company plans to apply for 52 new products for market approval in the second half of 2024, including 24 liquid formulations and 16 solid formulations[14] - The company aims to achieve a total of 28 approvals for formulations and raw materials in the second half of 2024, with 14 liquid formulations and 9 oral formulations included[14] Market Strategy and Operations - The company participated in over 500 national and provincial drug procurement events, significantly enhancing market share for key products[5] - The company is focusing on product innovation and market expansion, optimizing its product structure and marketing channels to enhance operational efficiency[4] - The company is focusing on high-value formulations and new product market development to increase the contribution rate of new products and expand market share[13] - The company has established a dedicated team to manage the risks associated with national centralized procurement and other forms of drug bidding[45] - The company has achieved more product registrations that have passed or are deemed to have passed consistency evaluations, qualifying for national centralized procurement[45] Financial Position and Assets - Non-current assets increased to HKD 7,275,706,000 as of June 30, 2024, compared to HKD 6,842,219,000 at the end of 2023, marking a rise of 6.3%[18] - Current assets rose to HKD 5,272,975,000, up from HKD 5,124,117,000, indicating a growth of 2.9%[18] - The net current assets increased to HKD 3,267,488,000, compared to HKD 2,602,677,000, showing a significant increase of 25.5%[18] - Total assets less current liabilities amounted to HKD 10,543,194,000, up from HKD 9,444,896,000, reflecting a growth of 11.6%[18] - The company’s total assets as of June 30, 2024, were HKD 12,548,681,000, compared to HKD 11,966,336,000 at the end of 2023[26] Costs and Expenses - Total employee costs increased to HKD 373,921,000 from HKD 341,362,000, marking an increase of about 10%[28] - Research and development costs amounted to HKD 247,094,000, slightly higher than HKD 243,021,000 in the previous year, with capitalized costs of HKD 110,578,000[29] - Sales and distribution costs decreased by 17.7% to HKD 758,055,000, attributed to optimized sales channels and increased procurement sales[56] - Research and development costs slightly decreased by 1.6% to HKD 136,516,000, including R&D staff salaries of approximately HKD 56,721,000[58] Shareholder Information - The interim dividend declared for the six months ended June 30, 2024, was HKD 237,523,000, an increase from HKD 207,903,000 for the same period in 2023[39] - The company did not repurchase any ordinary shares through the stock exchange for the six months ended June 30, 2024, but repurchased 2,640,000 shares for approximately HKD 13,672,000 in the previous period[41] - As of June 30, 2024, there were no stock options granted or exercised, with a total of 100,000,000 options remaining unexercised[42] - The company has not purchased any shares under the restricted share award plan during the reporting period, with 3,300,000 shares repurchased and recorded as treasury shares[43] Regulatory and Compliance - The effective tax rate for the six months ended June 30, 2024, was approximately 15% for high-tech enterprises, compared to 25% for other subsidiaries[31] - The company has not recognized deferred tax liabilities for undistributed profits amounting to HKD 7,441,963,000 as it does not intend to distribute these profits in the foreseeable future[31] - The company has not applied temporary exceptions under the OECD Pillar Two rules, pending the enactment of relevant legislation[32] Miscellaneous - The company primarily engages in the research, development, manufacturing, and sales of pharmaceutical products, including intravenous infusion and ampoule injection products[44] - The group had no significant acquisitions or disposals of subsidiaries or associates during the six months ended June 30, 2024[68] - The group maintained a sufficient public float of over 25% of its issued share capital as of August 28, 2024[69] - The group has not utilized any hedging financial instruments, as it does not anticipate significant adverse effects from exchange rate fluctuations[66] - The company will suspend the registration of share transfers from September 16, 2024, to September 20, 2024, inclusive[75] - The interim results announcement will be published on the company's website and the Hong Kong Stock Exchange website[76] - The interim report will include all information required by the listing rules and will be sent to shareholders later[76]

Financial Performance - In 2023, the company achieved a sales revenue of approximately RMB 5.824 billion, representing a year-on-year growth of about 4.9%[6] - The sales revenue in Hong Kong dollars was approximately HKD 6.463 billion, with a year-on-year growth of about 0.5%[6] - The gross profit margin for the year was 56.0%, an increase of 0.6 percentage points compared to the previous year[6] - The net profit reached approximately HKD 1.319 billion, reflecting a year-on-year increase of about 17.4%[6] - The company plans to distribute a final dividend of HKD 0.10 per share, resulting in a total annual dividend of HKD 0.17 per share, a year-on-year increase of approximately 21.4%[6] - For the fiscal year ending December 31, 2023, the total revenue of the group was HKD 6,463,009,000, representing a year-on-year increase of 0.5% from HKD 6,434,025,000 in 2022[28] - The revenue from intravenous infusion products was HKD 4,040,743,000, a 15.1% increase compared to HKD 3,510,342,000 in 2022, primarily driven by increased sales volume[30] - The revenue from oral formulations increased by 38.2% to HKD 478,195,000, driven by new products such as Buprenorphine tablets and Azithromycin tablets[31] - The group reported a 6% decline in sales revenue for its pharmaceutical packaging materials, totaling approximately HKD 162 million, while maintaining stable production and expanding market share[12] Product Development and Innovation - The group secured 86 production approvals in 2023, including 72 formulations and 14 raw materials, with significant advancements in areas such as anti-infection and rare disease medications[14] - The group is advancing its innovative drug research, with NP-01 tablets undergoing Phase I clinical trials and SYN-045 receiving approval for Phase I trials in January 2024[15] - The company achieved breakthroughs in complex formulation drug research, with 9 consistency evaluation approvals obtained in 2023, totaling 86 product approvals, including 5 products that were the first in the industry to pass consistency evaluation[17] - The company is focusing on the development of specialty generics and high-end complex formulations, aiming to achieve breakthroughs in these areas[21] - The company plans to obtain 82 national production approvals in 2024, including 38 liquid formulation products, 23 solid formulation products, and 21 raw materials, enhancing its innovation capabilities[21] Market Expansion and Sales Growth - In 2023, the sales revenue from national procurement products was approximately HKD 936 million, showing a year-on-year growth of about 70%[8] - The company is leveraging national procurement opportunities to expand product market accessibility and drive sales growth[8] - The group achieved a cumulative sales volume of approximately 1.91 billion bottles (bags) in the infusion business in 2023, representing a year-on-year growth of 21%, with sales revenue of approximately HKD 4.04 billion, a 15% increase year-on-year[10] - The sales volume of key therapeutic products reached approximately 362 million bottles (bags), an increase of 25% compared to last year, with significant growth in specific products such as the sales of Ammonium Bromide Sodium Chloride Injection increasing by approximately 215%[10] Cost Management and Profitability - The group's cash and cash equivalents slightly decreased to HKD 1,615,208,000 from HKD 1,667,547,000, while bank borrowings increased to HKD 3,368,141,000 from HKD 3,207,648,000[45] - The overall gross profit margin increased by 0.6 percentage points to 56.0%, with total gross profit recorded at HKD 3,619,639,000 compared to HKD 3,567,586,000 in 2022[34] - Sales and distribution costs decreased by 7.7% to HKD 1,532,591,000, with advertising and promotional expenses dropping to HKD 1,017,254,000 from HKD 1,121,283,000[36] - General and administrative expenses increased by 8.2% to HKD 308,321,000, driven by higher administrative staff salaries and utility costs[38] - Research and development costs rose by 11.8% to HKD 289,748,000, reflecting increased investment in new product development and innovation[39] Corporate Governance - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange, except for the separation of roles between the chairman and CEO[57] - The board consists of four executive directors and three independent non-executive directors, ensuring a balanced governance structure[58] - The company has established clear guidelines for management responsibilities and reporting to the board[59] - The board has delegated various responsibilities to its committees, including the nomination, remuneration, and audit committees[59] - The company has adopted a board diversity policy aiming to enhance board effectiveness by considering factors such as gender, age, cultural and educational background, race, professional experience, skills, knowledge, and tenure[71] Environmental, Social, and Governance (ESG) Initiatives - The environmental, social, and governance (ESG) report outlines the company's commitment to sustainable development and responsible business practices[98] - The company recognizes the growing importance of ESG issues among investors and stakeholders[98] - The company aims to reduce pollutant emissions with an average reduction in emission density from 2023 to 2032 compared to 2022, with ongoing efforts to adopt new equipment and optimize production processes[110] - The company has implemented measures to comply with GMP standards and relevant environmental laws, ensuring that pollution prevention and ecological protection capabilities are enhanced[112] - The company promotes a "green" pharmaceutical concept, emphasizing environmental protection and resource utilization in its production processes[111] Employee and Labor Practices - As of December 31, 2023, the total employee count increased to approximately 5,600, up from 5,000 in 2022, reflecting a growth of 12%[47] - The total salary cost for the year ending December 31, 2023, was approximately HKD 717,031,000, representing a 7.3% increase from HKD 668,407,000 in 2022[47] - The company adheres to strict compliance with labor laws and regulations, ensuring employee rights and safety[127] - The health and safety committee has implemented various training and safety measures to enhance workplace safety[128] - The employee turnover rate in 2023 was 16.5%, a decrease from 17.0% in 2022[127] Risk Management - The company has established a new risk control model for ensuring drug quality and safety, recognized as a national quality benchmark in 2023[14] - The group has established a dedicated team to manage risks related to centralized procurement and has obtained more product registrations that meet consistency evaluation standards[25] - The board of directors confirmed the effectiveness and adequacy of the risk management and internal control systems as of December 31, 2023[86] - The company has implemented sufficient internal control procedures for managing related party transactions[180] Shareholder and Investor Relations - The company has adopted a dividend policy to consider paying two dividends annually, with a stable dividend payout ratio based on audited net profit attributable to shareholders[95] - The company emphasizes the importance of effective communication with investors and stakeholders through various channels, including annual general meetings and reports[96] - The proposed final dividend record date is set for May 22, 2024, with expected payment around June 4, 2024[188] - The company has maintained a public float exceeding 25% of its issued share capital as of March 27, 2024[184]

Investment Rating - The investment rating for the company is "Buy" [4][17]. Core Views - The company achieved steady profit growth in 2023, with revenue of RMB 58.24 billion (+4.9%) and net profit of HKD 13.19 billion (+17.4%) [6][17]. - The growth in profit outpaced revenue growth due to product mix optimization and reduced sales expenses [6][17]. - The large-volume infusion segment showed significant improvement, with revenue of HKD 40.41 billion (+15.1%) and sales volume doubling for key products [11][17]. - The company is expected to benefit from new product approvals and competitive bidding wins, which will drive future performance [11][17]. - The raw material drug segment faced short-term pressure due to declining caffeine demand, but diversification is expected to provide long-term growth [11][17]. - The company maintains a leading position in the efficiency and quantity of generic drug development [17]. Financial Summary - In 2023, the company reported total revenue of HKD 64.63 billion (+0.5%) and net profit of HKD 13.19 billion (+17.4%) [6][19]. - The projected net profit for 2024-2026 is HKD 14.85 billion, HKD 16.71 billion, and HKD 18.61 billion, with growth rates of 12.63%, 12.53%, and 11.33% respectively [17][19]. - The company's PE ratios for 2024, 2025, and 2026 are projected to be 10.3, 9.2, and 8.2 respectively [17][19]. - The overall gross margin increased to 56.0% (+0.6pp) in 2023, while the net margin rose to 20.4% (+3.0pp) [10][19]. Segment Performance - The large-volume infusion segment accounted for 62.5% of total revenue, with a significant increase in sales volume [10][11]. - The raw material drug segment's revenue decreased by 34.6% due to lower caffeine sales, while the oral formulation segment grew by 38.2% [10][11]. - The company achieved substantial sales growth in its ampoule business, with a volume increase of 83.8% [11][17]. Product Development - In 2023, the company obtained 86 production approvals, including 72 for formulations and 14 for raw materials [17]. - The company has a total of 68 products that have passed or are deemed to have passed the national consistency evaluation for generic drugs [17].

Financial Performance - In 2023, the company achieved a sales revenue of approximately RMB 5.824 billion, representing a year-on-year growth of about 4.9%[2] - The sales revenue in Hong Kong dollars was approximately HKD 6.463 billion, with a year-on-year increase of about 0.5%[4] - The gross profit margin for the year was 56.0%, an increase of 0.6 percentage points compared to the previous year[2] - Net profit reached approximately HKD 1.319 billion, reflecting a year-on-year growth of about 17.4%[2] - The company declared a final dividend of HKD 0.10 per share, totaling an annual dividend of HKD 0.17 per share, which is a year-on-year increase of approximately 21.4%[3] - The group achieved a revenue of HKD 6,463,009 thousand for the year ended December 31, 2023, representing a slight increase from HKD 6,434,025 thousand in 2022[16] - The operating profit for 2023 was HKD 1,638,901 thousand, up from HKD 1,423,713 thousand in the previous year, indicating a growth of approximately 15.1%[16] - The net profit attributable to equity holders for 2023 was HKD 1,318,616 thousand, compared to HKD 1,122,837 thousand in 2022, reflecting an increase of about 17.4%[18] - The company reported a gross profit of HKD 3,619,639 thousand for 2023, compared to HKD 3,567,586 thousand in 2022, indicating a slight improvement in profitability[16] - The total revenue for the year ended December 31, 2023, was HKD 6,688,833,000, an increase from HKD 6,616,220,000 in 2022, representing a growth of approximately 1.1%[29] - The operating profit for the intravenous infusion and others segment was HKD 1,641,613,000, while the medical materials segment reported an operating profit of HKD 17,651,000, leading to a total operating profit of HKD 1,638,901,000[29] - Revenue from pharmaceutical sales was HKD 6,258,527,000 in 2023, compared to HKD 6,206,967,000 in 2022, indicating a growth of approximately 0.8%[32] Sales Performance - The company sold approximately 1.91 billion bottles (bags) of infusion products, a year-on-year increase of 21%, with sales revenue of about HKD 4.041 billion, up 15%[6] - The sales of oral formulations reached approximately HKD 478 million, marking a year-on-year growth of about 38%[7] - The company participated in national drug procurement, achieving sales of approximately HKD 936 million from these products, a year-on-year increase of about 70%[6] - The company’s sales of ampoule products reached approximately 310 million units, a year-on-year increase of 84%[7] - The company’s solid dosage forms saw significant growth, with key therapeutic products achieving a sales volume increase of approximately 25%[6] - The revenue from intravenous infusion products reached HKD 4,040,743,000, representing a 15.1% increase from HKD 3,510,342,000 in the previous year, primarily due to sales volume growth[53] - The revenue from ampoule injection products decreased to HKD 826,103,000, down 15.6% from HKD 978,707,000 in 2022, attributed to changes in product mix and increased sales through centralized procurement[54] - The revenue from active pharmaceutical ingredients fell to HKD 888,867,000, a decrease of 34.6% from HKD 1,358,949,000 in the previous year, reflecting weak market demand and price declines[54] - The revenue from oral formulations increased by 38.2% to HKD 478,195,000, up from HKD 346,058,000 in 2022, driven by new products such as Buprenorphine tablets and Acyclovir tablets[54] Research and Development - The group obtained 86 production approvals, including 72 for formulations and 14 for raw materials, during the reporting period[9] - The group plans to accelerate clinical trials for the new drug NP-01, which has shown good safety and efficacy signals in preliminary studies[9] - The group has applied for 110 product approval projects, including 89 for new varieties of liquid and solid formulations[10] - The group achieved 9 consistency evaluation approvals, bringing the total to 86 approvals across various products[10] - The group applied for 70 patents and was granted 43 patents in 2023, with a total of 452 patent applications to date[10] - Research and development costs amounted to HKD 471,076,000 in 2023, a slight decrease from HKD 473,060,000 in 2022[37] - The company capitalized development costs of HKD 289,748,000 in 2023, compared to HKD 259,104,000 in 2022, marking an increase of about 11.9%[37] - The company plans to continue focusing on high-quality intravenous infusion products and will launch new products in ampoule injections, active pharmaceutical ingredients, oral formulations, and medical materials to drive revenue growth[54] Financial Position - The total current assets increased to HKD 5,124,117 thousand in 2023 from HKD 4,884,452 thousand in 2022, reflecting a growth in liquidity[19] - Total assets decreased from HKD 9,444,896 thousand to HKD 8,288,626 thousand, reflecting a decline of approximately 12.3%[22] - Non-current liabilities increased from HKD 1,742,802 thousand to HKD 2,176,204 thousand, representing a rise of about 24.9%[22] - Net assets rose from HKD 6,545,824 thousand to HKD 7,268,692 thousand, indicating an increase of approximately 11%[22] - Borrowings increased significantly from HKD 1,561,566 thousand to HKD 1,947,568 thousand, a growth of around 24.7%[22] - The company's equity attributable to shareholders increased from HKD 6,213,600 thousand to HKD 6,932,534 thousand, marking an increase of about 11.6%[22] - Deferred income rose from HKD 160,390 thousand to HKD 203,714 thousand, reflecting an increase of approximately 27%[22] Cost Management - The company’s employee costs increased to HKD 717,031,000 in 2023 from HKD 668,407,000 in 2022, marking an increase of approximately 7.3%[35] - The total depreciation and amortization expenses for the year were HKD 405,574,000, compared to HKD 370,642,000 in 2022, indicating an increase of approximately 9.4%[29] - Sales and distribution costs decreased by 7.7% to HKD 1,532,591,000, with advertising and promotional expenses dropping to HKD 1,017,254,000 from HKD 1,121,283,000[58] - General and administrative expenses increased by 8.2% to HKD 308,321,000, driven by higher administrative staff costs and utility expenses[59] - Net financial costs surged by 124.1% to HKD 85,942,000 due to rising average bank borrowing rates[62] - Income tax expenses increased by 21.3% to HKD 254,281,000, attributed to higher pre-tax profits[63] Corporate Governance and Compliance - The company has adopted new and revised Hong Kong Financial Reporting Standards, which did not have a significant impact on the financial statements[24] - The company has not applied any new standards or interpretations that have not yet come into effect during the accounting period[24] - The company is currently assessing the impact of the OECD's second pillar model rules on its financial reporting[26] - The company has not experienced significant impacts from the abolition of the MPF long service payment offset mechanism[26] - The company has complied with all applicable provisions of the corporate governance code during the year ended December 31, 2023, except for the separation of roles between the Chairman and CEO[76] - The external auditor confirmed that the financial data for the year ended December 31, 2023, is consistent with the audited financial statements[78] Shareholder Information - The proposed final dividend per ordinary share is HKD 0.08, compared to HKD 0.06 in the previous year, with total dividends for the year amounting to HKD 504,807,000, up from HKD 416,647,000 in 2022[49] - The interim dividend of HKD 0.07 per share was declared on August 29, 2023, and paid on September 27, 2023, compared to HKD 0.06 per share in 2022[79] - The total dividend for the year ending December 31, 2023, will be HKD 0.17 per share, an increase from HKD 0.14 per share in 2022[79] - The annual general meeting is scheduled for May 17, 2024, at 2:00 PM[80] - Share transfer registration will be suspended from May 14, 2024, to May 17, 2024[81] - The annual report will be published on the company's website and the Hong Kong Stock Exchange website[82]

Financial Performance - Sales revenue for the first half of 2023 reached approximately RMB 2.962 billion, a year-on-year increase of 4.7%, but due to the depreciation of RMB against HKD by approximately 6.5%, the sales revenue in HKD terms was approximately HKD 3.333 billion, a year-on-year decrease of 2.1%[3] - Net profit for the first half of 2023 was approximately HKD 639 million, a year-on-year increase of 12%[3] - Revenue for the six months ended June 30, 2023, was HKD 3,333.16 million, a decrease of 2.1% compared to HKD 3,404.51 million in the same period last year[68] - Gross profit for the six months ended June 30, 2023, was HKD 1,944.75 million, a slight increase of 0.3% compared to HKD 1,939.45 million in the same period last year[68] - Operating profit for the six months ended June 30, 2023, was HKD 792.48 million, an increase of 4.8% compared to HKD 756.32 million in the same period last year[68] - Net profit attributable to equity holders of the company for the six months ended June 30, 2023, was HKD 638.61 million, an increase of 12.0% compared to HKD 570.06 million in the same period last year[70] - Basic earnings per share for the six months ended June 30, 2023, was HKD 0.2149, an increase of 12.8% compared to HKD 0.1906 in the same period last year[70] - Total assets as of June 30, 2023, were HKD 8,626.78 million, an increase of 4.1% compared to HKD 8,288.63 million as of December 31, 2022[71] - Net current assets as of June 30, 2023, were HKD 2,341.34 million, an increase of 6.1% compared to HKD 2,206.57 million as of December 31, 2022[71] - Total assets increased to HKD 6,681,527 thousand as of June 30, 2023, compared to HKD 6,545,824 thousand at the end of 2022[72] - Non-current liabilities rose to HKD 1,945,248 thousand, up from HKD 1,742,802 thousand at the end of 2022[72] - Operating cash flow for the six months ended June 30, 2023, was HKD 661,515 thousand, a significant increase from HKD 362,146 thousand in the same period last year[76] - Net cash generated from operating activities was HKD 463,601 thousand, compared to HKD 193,380 thousand in the previous year[76] - Investment activities used HKD 265,381 thousand in cash, slightly higher than HKD 245,941 thousand in the same period last year[76] - Cash and cash equivalents at the end of June 2023 stood at HKD 1,789,616 thousand, up from HKD 1,625,224 thousand at the end of June 2022[78] - Dividends paid to shareholders amounted to HKD 237,604 thousand, compared to HKD 209,073 thousand in the previous year[78] - The company repurchased and canceled shares worth HKD 13,672 thousand during the period[78] - Borrowings received during the period totaled HKD 688,129 thousand, down from HKD 1,808,986 thousand in the previous year[78] - The company's equity attributable to shareholders increased to HKD 6,350,612 thousand, up from HKD 6,213,600 thousand at the end of 2022[72] - Revenue from sales of pharmaceuticals decreased to HKD 3,225,011 thousand in 2023 from HKD 3,294,478 thousand in 2022, a decline of approximately 2.1%[85] - Revenue from medical materials increased slightly to HKD 89,097 thousand in 2023 from HKD 87,850 thousand in 2022, a growth of approximately 1.4%[85] - Total customer contract revenue under HKFRS 15 decreased to HKD 3,333,157 thousand in 2023 from HKD 3,404,396 thousand in 2022, a decline of approximately 2.1%[85] - Revenue from China (domestic) increased to HKD 3,013,522 thousand in 2023 from HKD 2,850,800 thousand in 2022, a growth of approximately 5.7%[85] - Revenue from other countries decreased significantly to HKD 319,635 thousand in 2023 from HKD 553,713 thousand in 2022, a decline of approximately 42.3%[85] - Operating profit for the intravenous infusion and other segment was HKD 806,104 thousand in 2023, compared to HKD 763,408 thousand in 2022, an increase of approximately 5.6%[87][91] - Operating profit for the medical materials segment was HKD 10,484 thousand in 2023, compared to HKD 10,316 thousand in 2022, a slight increase of approximately 1.6%[87][91] - Total profit before tax for the reportable segments was HKD 770,699 thousand in 2023, compared to HKD 749,219 thousand in 2022, an increase of approximately 2.9%[87][91] - Total profit for the reportable segments after tax was HKD 649,505 thousand in 2023, compared to HKD 611,476 thousand in 2022, an increase of approximately 6.2%[87][90] - Total assets for the reportable segments were HKD 10,966,512 thousand as of December 31, 2022, with the intravenous infusion and other segment accounting for HKD 10,355,222 thousand[92] - Total reportable segment assets amounted to 11,331,939 thousand HKD, with intravenous infusion and others contributing 10,685,003 thousand HKD[93] - Total reportable segment liabilities were 4,650,412 thousand HKD, with intravenous infusion and others accounting for 3,350,970 thousand HKD[93] - Net financial costs increased to 35,958 thousand HKD in 2023 from 13,187 thousand HKD in 2022[95] - Employee costs rose to 341,362 thousand HKD in 2023, up from 299,452 thousand HKD in 2022[96] - R&D expenses increased to 243,021 thousand HKD in 2023, with 104,273 thousand HKD capitalized as intangible assets[97] - Inventory costs decreased to 1,384,100 thousand HKD in 2023 from 1,474,961 thousand HKD in 2022[97] - Current tax expense for corporate income tax in China was 117,916 thousand HKD in 2023, down from 137,942 thousand HKD in 2022[98] - Basic earnings per share increased to 638,611 thousand HKD in 2023 from 570,056 thousand HKD in 2022[100] - Diluted earnings per share were calculated based on 2,985,285 thousand weighted average shares in 2023[101] - The weighted average number of ordinary shares (diluted) was 2,985,285 thousand in 2023, up from 2,990,288 thousand in 2022[102] - The company acquired property, plant, and equipment with a cost of HKD 442,789,000 and intangible assets with a cost of HKD 104,552,000 during the six months ended June 30, 2023[103] - The company sold plant and equipment with a book value of HKD 4,416,000, generating a gain of HKD 399,000 during the six months ended June 30, 2023[103] - The company's investment in Chenxin Pharmaceutical, an associate, was valued at HKD 399,200,000 as of June 30, 2023, representing a 6.10% equity interest[104][105] - The company received dividends of HKD 10,052,000 from Chenxin Pharmaceutical during the six months ended June 30, 2023[105] - The company's inventory increased to HKD 1,000,583,000 as of June 30, 2023, compared to HKD 810,656,000 as of December 31, 2022[106] - The company's trade receivables and bills decreased to HKD 1,990,902,000 as of June 30, 2023, compared to HKD 2,112,680,000 as of December 31, 2022[108] - The company's bank acceptance bills receivable decreased to HKD 139,075,000 as of June 30, 2023, compared to HKD 191,746,000 as of December 31, 2022[108] - The company's total borrowings increased to HKD 3,379,969,000 as of June 30, 2023, compared to HKD 3,207,648,000 as of December 31, 2022[110] - The company's trade payables and bills increased to HKD 494,157,000 as of June 30, 2023, compared to HKD 361,063,000 as of December 31, 2022[113] - The interim dividend for 2023 is HK$0.07 per share, totaling HK$207,903 thousand, compared to HK$0.06 per share and HK$179,043 thousand in 2022[114] - The proposed final dividend for 2023 is HK$0.08 per share, totaling HK$237,604 thousand, compared to HK$0.07 per share and HK$209,073 thousand in 2022[115] - The company repurchased 2,640,000 shares in the first half of 2023, with a total cost of HK$13,672 thousand, compared to 9,938,000 shares and HK$36,193 thousand in 2022[116] - The fair value of financial assets measured at fair value through other comprehensive income (FVTOCI) was HK$139,075 thousand as of June 30, 2023, classified under Level 2[121] - The fair value of financial assets measured at FVTOCI was HK$191,746 thousand as of December 31, 2022, classified under Level 2[122] - The company's capital commitments as of June 30, 2023, were HK$641,902 thousand, compared to HK$524,849 thousand as of December 31, 2022[124] - Sales to Kelun Group in the first half of 2023 amounted to HK$35,014 thousand, compared to HK$26,198 thousand in 2022[128] - Purchases from Kelun Group in the first half of 2023 amounted to HK$148,519 thousand, compared to HK$91,845 thousand in 2022[128] - The trustee purchased 3,300,000 shares under the restricted share award plan after the reporting period, with a total cost of HK$14,933 thousand[129] Product Sales and Market Performance - Large infusion products achieved a cumulative sales volume of approximately 936 million bottles (bags), with sales revenue of HKD 2.069 billion, a year-on-year increase of 24.1% and 12.8% respectively[6] - Therapeutic infusion products achieved sales revenue of HKD 566 million, a year-on-year increase of 24.7%[6] - Ampoule product sales volume reached approximately 131 million units, a year-on-year increase of 92%[7] - Hydrobromide injection sales reached approximately HKD 180 million, a year-on-year increase of 4.6 times[7] - Ambroxol hydrochloride injection sales reached approximately HKD 14.67 million, a year-on-year increase of 98%[7] - Sales of Bidol capsules reached 22.56 million units, a year-on-year increase of approximately 302%[8] - Sales of Rosuvastatin Calcium Tablets reached 29.3 million units, a year-on-year increase of approximately 60%[8] - Sales of Azithromycin Dispersible Tablets reached 34.79 million units, a year-on-year increase of approximately 43%[8] - Export sales of infusion products reached 51.08 million bottles (bags), a year-on-year increase of approximately 17%, with export sales revenue of 80.08 million HKD, a year-on-year increase of approximately 25%[9] - Revenue from intravenous infusion products increased by 12.8% to HKD 2,069,115,000, driven by strong post-pandemic demand in China[21] - Non-PVC soft bag and upright soft bag infusion revenue increased by 16.3% to HKD 1,526,497,000, accounting for 73.8% of intravenous infusion revenue[21] - Revenue from oral formulations surged by 68.4% to HKD 244,391,000, supported by new products such as antiviral drug Abidol capsules[21] - Revenue from active pharmaceutical ingredients (API) decreased by 41.6% to HKD 453,626,000 due to weak market demand and price declines[21] - Revenue from ampoule injections declined by 11.2% to HKD 453,398,000, influenced by changes in product mix and centralized procurement sales[21] - Medical materials revenue slightly decreased by 0.5% to HKD 90,067,000[22] Research and Development - The company successfully bid for 5 products with 7 specifications in the 8th national drug centralized procurement, bringing the total number of products selected for national drug centralized procurement to 13 varieties with 18 specifications[5] - New products such as Lacosamide Injection, Peritoneal Dialysis Solution, and Terbutaline Sulfate Injection have gained market access in 30, 27, and 23 provinces respectively[5] - The company obtained 34 production approvals, including 8 for APIs and 26 for formulations, with several products being the first or second in China to receive approvals[11] - The company's innovative drug NP-01 for anti-tumor treatment showed positive progress in Phase I clinical trials, with expected completion of Phase I tolerance study by November 2023[12] - The company has 51 products with 67 specifications that have passed or are deemed to have passed consistency evaluations, enhancing market competitiveness[12] - The company applied for 49 patents and was granted 26, including 24 invention patents, bringing the total number of valid patents to 254, with 128 being invention patents[12] - R&D costs increased by 11.5% to HKD 138,748,000 in the first half of 2023, reflecting the company's focus on new product development in finished drugs, APIs, and medical materials[26][28] - Research and development costs for the six months ended June 30, 2023, were HKD 138.75 million, an increase of 11.5% compared to HKD 124.43 million in the same period last year[68] Corporate Governance and Shareholder Information - The company declared an interim dividend of HKD 0.07 per share, a year-on-year increase of 16.7%[3] - The company plans to focus on expanding the market share of high-value-added products and optimizing the production and sales structure in the second half of 2023[14] - The company is actively promoting the spin-off and listing of Bosheng Medical Materials on the Beijing Stock Exchange and seeking M&A opportunities in the pharmaceutical industry[15] - The company continues to focus on producing high-quality intravenous infusion products and launching new products in ampoule injections, APIs, oral formulations, and medical materials[22] - The company has established a dedicated team to handle centralized procurement and other forms of drug bidding to mitigate risks[17] - The company has obtained more product registrations that have passed or are deemed to have passed consistency evaluations, qualifying them for centralized procurement[17] - The company emphasizes environmental sustainability and green manufacturing, adhering to GMP standards and implementing low-energy and low-pollution measures[18] - Sales cost decreased by 5.2% to HKD 1,388,406,000 from HKD 1,465,066,000 in the first half of 2023, with direct materials, direct labor, and other costs accounting for 54.8%, 14.4%, and 30.8% of total sales cost respectively[23] - Gross profit margin increased by 1.3 percentage points to 58.3% in the first half of 2023, driven by a higher proportion of revenue from higher-margin finished drugs[24] - Other net income increased to HKD 45,301,000 in the first half of 2023, primarily due to government grants[25] - Operating profit increased by 4.8% to HKD 792,484,000 in the first half of 2023, with operating profit margin improving to 23.8% from 22.2%[29] - Net finance costs increased by 172.7% to HKD 35,958,000 in the first half of 2023 due to higher average bank borrowing rates[30] - Income tax expense decreased by 12.0% to HKD 121,194,000 in the first half of 2023, benefiting from a preferential tax rate of 15% for high-tech enterprises[31] - Profit attributable to equity holders increased by 12.0% to HKD 638,611,000 in the first half of 2023, with net profit margin rising to 19.2% from 16.7%[32] - Cash and cash equivalents increased to HKD 1,789,616,000 as of June 30, 2023, with bank borrowings slightly rising to HKD 3,379,969,000[34] - Capital-to-debt ratio remained stable at 20.1% as of June 30, 2023, with a current ratio improving to 1.87 from 1.82[34] - Total employee count increased to 5,300 as of June 30, 2023, up from 4,800 in the same period last year, reflecting a 10.4% growth[35] - Total employee compensation costs for the first six