Financial Performance - Revenue increased by RMB 170.5 million or 5.9% to RMB 3,074.6 million for the six months ended June 30, 2024[2] - Gross profit rose by RMB 135.2 million or 7.0% to RMB 2,078.6 million, with a gross margin of 67.6%[2] - Net profit attributable to shareholders increased by RMB 237.8 million or 158.5% to RMB 387.8 million[2] - EBITDA grew by RMB 288.9 million or 33.3% to RMB 1,156.1 million[2] - Basic earnings per share was RMB 10.31, compared to RMB 4.06 for the six months ended June 30, 2023[2] - Total revenue for the six months ended June 30, 2024, was RMB 3,074,582 thousand, compared to RMB 2,757,064 thousand for the same period in the previous year, marking an increase of around 11.5%[16] - The gross profit for the same period was RMB 1,227,724 thousand, reflecting a significant increase from the previous period[16] - The pre-tax profit for the six months ended June 30, 2024, was RMB 529,977 thousand, showcasing strong operational performance[16] - The company reported a net tax expense of RMB 91,799,000 for the six months ended June 30, 2024, compared to RMB 83,634,000 for the same period in 2023, representing an increase of approximately 9.4%[25] - The net profit for the six months ended June 30, 2024, was approximately RMB 438.2 million, an increase of about RMB 292.8 million or 201.4% compared to RMB 145.4 million for the same period in 2023[93] Assets and Liabilities - Total assets decreased to RMB 17,424.0 million from RMB 17,352.9 million as of December 31, 2023[8] - Current assets increased to RMB 12,535.9 million from RMB 10,703.3 million as of December 31, 2023[8] - Current liabilities rose to RMB 9,774.5 million from RMB 8,137.8 million as of December 31, 2023[8] - Non-current liabilities decreased to RMB 3,339,350 thousand from RMB 3,824,414 thousand, indicating a reduction of about 12.7%[9] - Net assets increased to RMB 14,084,653 thousand from RMB 13,528,494 thousand, representing a growth of approximately 4.1%[9] - The total amount of notes payable as of June 30, 2024, was RMB 346,122,000, slightly up from RMB 340,161,000 on December 31, 2023, indicating a growth of 1.4%[30] - The total trade payables and notes payable combined reached RMB 797,008,000 as of June 30, 2024, compared to RMB 767,187,000 at the end of 2023, reflecting an increase of 3.9%[30] - The total borrowings of the group as of June 30, 2024, amounted to approximately RMB 8,479.2 million, an increase from RMB 7,486.1 million as of December 31, 2023, with RMB 6,669.0 million due within one year[95] - The capital-to-debt ratio increased from 55.3% as of December 31, 2023, to 60.2% as of June 30, 2024, primarily due to an increase in total borrowings during the reporting period[96] Dividends and Shareholder Returns - The board did not recommend the payment of an interim dividend for the six months ended June 30, 2024[2] - The company did not declare any interim dividends for the six months ended June 30, 2024, consistent with the previous year[26] - The average number of ordinary shares issued for the calculation of basic earnings per share increased to 3,761,670,643 for the six months ended June 30, 2024, from 3,694,503,007 in 2023[26] Research and Development - The group has developed over 30 domestic and more than 10 international products in its research pipeline, maintaining high international standards in drug delivery technologies[41] - The group has a research and development team consisting of 720 employees, including 66 PhDs and 351 Master's degree holders, as of June 30, 2024[59] - The group holds 272 patents in China and 552 patents overseas, with 66 and 123 patents respectively in the application stage as of June 30, 2024[59] - The group has 27 products in various stages of development in China, including 18 oncology products, 5 CNS products, and 4 others as of June 30, 2024[59] Market Performance and Product Development - Revenue from the oncology treatment sector increased by 25.3% to RMB 1,140.9 million, while revenue from the central nervous system treatment sector rose by 20.9% to RMB 822.7 million[43] - The cardiovascular treatment sector experienced a revenue decline of 21.9%, totaling RMB 763.3 million, and the metabolic treatment sector saw a decrease of 20.8%, amounting to RMB 195.7 million[43] - The group has established a strong competitive advantage in 16 major products across high-prevalence disease areas, with market share expected to grow steadily or maintain current levels[43] - The group’s proprietary formulation, Liposome, is the first and only paclitaxel liposome product approved for global sale, included in the National Medical Insurance Catalog[44] - The flagship antipsychotic drug Erzofri is set to be approved in the U.S. in July 2024, with a market sales figure of USD 2.897 billion in 2023 for similar products, indicating substantial market potential[79] Strategic Initiatives - The group plans to continue optimizing its product pipeline, focusing on core therapeutic areas and increasing investment in new molecular innovative drugs[81] - The group aims to improve management efficiency and reduce unnecessary expenses, with a forecasted gradual recovery of overall net profit margin to industry levels over the next three years[82] - The group will focus on high-potential products in oncology and central nervous system areas for short-term revenue generation and will selectively pursue BD-out opportunities for non-core products[81] - The company plans to optimize its sales model and strategies to adapt to changes in the pharmaceutical market environment, aiming for high-quality revenue growth[80] - The group anticipates that adjustments in fundamental changes and strategies will support high-quality performance growth and long-term sustainable development[75]

Financial Performance - In 2023, Luye Pharma Group achieved revenue of RMB 6,143.1 million, a 2.7% increase from RMB 5,981.7 million in 2022[13] - The gross profit for 2023 was RMB 4,204.2 million, representing a gross margin of approximately 68.4%[13] - The net profit attributable to shareholders for 2023 was RMB 532.6 million, down from RMB 604.8 million in 2022, indicating a decrease of 11.9%[13] - Revenue increased by RMB 161.4 million or 2.7% to RMB 6,143.1 million for the year ended December 31, 2023[15] - EBITDA rose by RMB 264.6 million or 14.6% to RMB 2,077.4 million for the same period[15] - Product sales revenue grew by RMB 562.7 million or 11.2% to RMB 5,627.4 million[22] - The company reported product sales revenue of RMB 5,627.4 million, representing a growth rate of 11.2%, with total revenue reaching RMB 6,143.1 million for the fiscal year ending December 31, 2023[84] Assets and Liabilities - As of December 31, 2023, the total assets of the group reached RMB 25,490.7 million, an increase from RMB 24,249.6 million in 2022[13] - The total liabilities of the group decreased to RMB 11,962.2 million in 2023 from RMB 13,207.9 million in 2022, reflecting a reduction of 9.4%[13] - The company's debt-to-asset ratio decreased from 69.2% as of December 31, 2022, to 55.3% as of December 31, 2023, primarily due to an increase in total equity[112] Research and Development - The group has a robust R&D team consisting of 931 employees, including 86 PhDs and 467 Master's degree holders[6] - Luye Pharma has 35 products in various stages of development in China, including 17 oncology products and 12 CNS products[6] - The company holds 271 patents in China and 508 patents overseas, with additional patents pending[6] - The company has expanded its R&D capabilities into the biopharmaceutical field, balancing clinical development risks through strategic resource allocation[40] - The company continues to invest in four strategic therapeutic areas: oncology, central nervous system, cardiovascular, and metabolism, with 35 research products at various development stages in China as of December 31, 2023[41] - The company has achieved significant R&D milestones for several candidate products during the reporting period[42] Product Development and Approvals - The company successfully launched 3 new CNS drugs and 2 oncology drugs during the reporting period[18] - The product "Rikota" (long-acting risperidone microsphere injection) received FDA approval in January 2023 for treating schizophrenia in adults and as an adjunct therapy for bipolar disorder type I[43] - The "Lisdexamfetamine transdermal patch" received approval from the National Medical Products Administration (NMPA) in China in October 2023 for treating mild to moderate Alzheimer's disease symptoms[44] - The "Baitowei" (Goserelin microsphere injection) is the first and only approved long-acting microsphere formulation for treating prostate cancer, receiving NMPA approval in June 2023[50] - The company has developed "LY01022," a long-acting formulation of Goserelin with a three-month dosing interval, approved for clinical trials in January 2023[53] - The drug "Lobaplatin" has been approved in December 2023 for treating metastatic small cell lung cancer in Hong Kong and Macau, benefiting patients in mainland China through specific medical institutions[54] Market Presence and Sales - The company has established a national sales and distribution network in China, reaching over 21,660 hospitals, including approximately 2,280 tertiary hospitals, which accounts for about 89.0% of all tertiary hospitals in China[81] - The company has a global business presence in over 80 countries and regions, supported by more than 50 strong sales partnerships[80] - The flagship product Xue Zhi Kang has maintained rapid growth since its promotion rights were granted to AstraZeneca in 2019, with sales exceeding RMB 1 billion since 2021 and expected to maintain double-digit growth in the coming years[88] - The newly launched product Ruo Xin Lin is projected to become a blockbuster with sales potential reaching several billion RMB, targeting the approximately 50 million patients in China needing treatment for depression[90] Management and Governance - Liu Dianbo serves as the Executive Chairman and has been with the company since its establishment in 2003, previously holding leadership roles in Shandong Green Leaf Pharmaceutical[131] - Yang Rongbing, the Executive Vice Chairman, has been with the company since 2007 and has extensive experience in sales and management within the pharmaceutical industry[132] - The company has a strong board of directors with members holding significant positions in various pharmaceutical and healthcare organizations, enhancing its governance and strategic oversight[136] - The management team has a diverse background in finance, healthcare, and regulatory affairs, which supports the company's strategic initiatives and compliance[139] Environmental and Regulatory Compliance - The company has implemented various green office measures, including double-sided printing and recycling initiatives, to promote environmental sustainability[176] - The company has maintained compliance with all relevant regulations and has established effective communication with regulatory authorities[179] - The company is committed to enhancing employee awareness of environmental protection and has adopted the 3R principles (Reduce, Recycle, Reuse) to strengthen sustainability efforts[176] Risks and Challenges - The company faces various risks, including market risk, operational risk, investment risk, and human resource risk, which could impact its financial performance and business outlook[168][169][171][172] - The arbitration ruling against the company regarding a claim from a former distributor amounted to approximately RMB 253.2 million, which has been provisioned in the financial statements[175] - The company has established risk management procedures to minimize significant risks that could affect its business objectives[174]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Viewpoints - The company is expected to achieve dual listings for its product Paliperidone in China and the US, with an increase in global commercialization of its products [1] - The overall performance for 2023 met expectations, with total revenue of 6.14 billion RMB, a year-on-year increase of 2.7%, and product sales revenue of 5.63 billion RMB, a year-on-year increase of 11.2% [1] - The decline in net profit to 533 million RMB, a decrease of 11.9% year-on-year, is attributed to a lower proportion of licensing income [1] - The company anticipates the approval of five new products in 2024, contributing to a continuous increase in new product numbers [1] - The launch of innovative drug Zepzelca in Hong Kong and Macau has broken the treatment bottleneck for SCLC [1] - The company’s operational efficiency is expected to improve, leading to an increase in net profit margin [1] Summary by Relevant Sections Financial Performance - In 2023, the revenue from oncology treatment reached 1.92 billion RMB, a year-on-year increase of 26.3%, while revenue from CNS treatment was 1.39 billion RMB, up 14.8% [1] - The cardiovascular treatment revenue was 1.69 billion RMB, reflecting a year-on-year growth of 10.8% [1] - The overall net profit margin improved in the second half of 2023, reaching 12.2%, an increase of 7.2 percentage points compared to the first half [1] Product Pipeline - The company has several products expected to be approved in 2024, including: - Lurbinectedin (LY01017) for small cell lung cancer - Oxycodone Naloxone (LY021702) for moderate to severe chronic pain - Rotigotine microspheres (LY03003) for Parkinson's disease - Paliperidone (LY03010) for schizophrenia in both China and the US - Dexamethasone (BA1102) for solid tumor bone metastases and giant cell tumor [3] Future Outlook - The company is projected to achieve revenues of 6.991 billion RMB, 8.529 billion RMB, and 10.279 billion RMB from 2024 to 2026, with net profits of 809 million RMB, 1.373 billion RMB, and 1.678 billion RMB respectively [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 61.43 billion HKD for 2023, a year-on-year increase of 2.70%, with product sales revenue reaching 56.27 billion HKD, reflecting a growth of 11.23% [1] - The net profit attributable to shareholders was 5.33 billion HKD, showing a decline of 11.94% year-on-year [1] - The company has seen continuous improvement in management efficiency and significant optimization of its financial structure [1] - Revenue growth was observed across three major fields, with double-digit growth in product sales recovery [1] - The company launched five new products in 2023, with significant potential for growth in the oncology sector [1][2] Financial Summary - The projected revenues for 2024, 2025, and 2026 are 68.11 billion HKD, 83.95 billion HKD, and 99.25 billion HKD, representing year-on-year growth rates of 11%, 23%, and 18% respectively [2][3] - The net profit attributable to shareholders is expected to be 7.75 billion HKD, 12.40 billion HKD, and 15.98 billion HKD for the years 2024, 2025, and 2026, with corresponding growth rates of 46%, 60%, and 29% [2][3] - The gross margin is projected to improve from 68.44% in 2023 to 73.79% in 2025, before slightly decreasing to 72.94% in 2026 [3][5] - The company’s asset-liability ratio is expected to decrease from 46.93% in 2023 to 36.10% in 2026, indicating a continued effort to reduce debt [5] Product and Market Development - The oncology treatment revenue reached 21.22 billion HKD, while the cardiovascular and central nervous system treatment revenues were 16.87 billion HKD and 16.95 billion HKD, reflecting increases of 10.8% and 28.1% respectively [1] - The company has successfully entered international markets with its cardiovascular products and has maintained a strong market position for its CNS products [1] - Several new products are expected to be approved soon, which will lay a solid foundation for future growth [1][2]

Financial Performance - Revenue increased by RMB 161.4 million or 2.7% to RMB 6,143.1 million compared to the year ended December 31, 2022[2]. - EBITDA rose by RMB 264.6 million or 14.6% to RMB 2,077.4 million compared to the previous year[2]. - Gross profit increased by RMB 63.7 million or 1.5% to RMB 4,204.2 million, with a gross profit margin of 68.4%[2]. - Profit before tax increased by RMB 30.3 million or 4.5% to RMB 700.1 million compared to the year ended December 31, 2022[2]. - Net profit attributable to shareholders decreased to RMB 532.6 million, a decline of RMB 72.2 million compared to the previous year[2]. - Basic earnings per share decreased to RMB 14.29 from RMB 17.38 in the previous year[2]. - Total revenue for the year ended December 31, 2023, was RMB 6,143,078 thousand, an increase from RMB 5,981,656 thousand in 2022, representing a growth of approximately 2.7%[23][26]. - The pre-tax profit for the year ended December 31, 2023, was RMB 700,100 thousand, compared to RMB 669,762 thousand in 2022, indicating an increase of about 4.5%[21][23]. Assets and Liabilities - Total non-current assets increased to RMB 14,787.4 million from RMB 13,463.8 million in the previous year[6]. - Current assets totaled RMB 10,703.3 million, slightly down from RMB 10,785.8 million in the previous year[6]. - Cash and cash equivalents increased to RMB 3,238.9 million from RMB 2,323.7 million in the previous year[6]. - As of December 31, 2023, total current liabilities decreased to RMB 8,137,807 thousand from RMB 9,487,203 thousand in 2022, representing a reduction of approximately 14.3%[7]. - The net value of current assets increased significantly to RMB 2,565,475 thousand in 2023, compared to RMB 1,298,610 thousand in 2022, marking a growth of approximately 97.6%[7]. - Total assets minus current liabilities rose to RMB 17,352,908 thousand in 2023, up from RMB 14,762,422 thousand in 2022, indicating an increase of about 17.7%[7]. - The total equity attributable to the parent company increased to RMB 12,531,185 thousand in 2023 from RMB 10,175,954 thousand in 2022, reflecting a growth of approximately 23.2%[8]. - The company’s total non-current liabilities amounted to RMB 3,824,414 thousand in 2023, slightly up from RMB 3,720,700 thousand in 2022, indicating a marginal increase of about 2.8%[7]. Revenue Breakdown - The segment revenue from tumor drugs was RMB 5,627,352 thousand for 2023, while the revenue from cardiovascular system drugs was RMB 1,687,359 thousand[22]. - Revenue from sales products amounted to RMB 5,627,352 thousand in 2023, compared to RMB 5,059,298 thousand in 2022, reflecting an increase of about 11.2%[25][26]. - The revenue from R&D services was RMB 81,550 thousand in 2023, up from RMB 86,689 thousand in 2022, indicating a decrease of approximately 6.5%[25][26]. - The total revenue from the Chinese mainland market was RMB 5,029,604 thousand in 2023, a slight decrease from RMB 5,031,164 thousand in 2022, reflecting a marginal decline of approximately 0.03%[25][26]. Expenses and Costs - Administrative expenses for the year were RMB 643,967 thousand, up from RMB 582,870 thousand in 2022, reflecting an increase of approximately 10.5%[21][23]. - The cost of goods sold for 2023 was RMB 1,866,830,000, compared to RMB 1,762,326,000 in 2022, indicating an increase of about 5.9%[30]. - Research and development expenses decreased to RMB 586,157,000 in 2023 from RMB 857,337,000 in 2022, a reduction of approximately 31.6%[30]. - Total financial costs rose to RMB 675,454,000 in 2023, up from RMB 471,755,000 in 2022, marking an increase of about 43.2%[32]. - The total tax expense for the year was RMB 161,023,000, significantly higher than RMB 86,466,000 in 2022, reflecting an increase of approximately 86.2%[35]. Dividends and Share Capital - The board does not recommend the payment of a dividend for the year ended December 31, 2023[2]. - The company did not declare or propose any interim or final dividends for the year ending December 31, 2023, consistent with 2022[38]. - Basic earnings per share for the year were calculated based on 3,728,362,856 shares, an increase from 3,480,852,775 shares in 2022[38]. - The issued share capital rose to RMB 486,107 thousand in 2023, up from RMB 456,953 thousand in 2022, which is an increase of about 6.4%[8]. Research and Development - The R&D team consists of 931 employees, including 86 PhDs and 467 Master's degree holders, as of December 31, 2023[70]. - The company holds 271 patents in China and 508 patents overseas, with 61 and 123 patents pending, respectively[70]. - The company is actively engaged in strategic development in cell therapy and gene therapy[54]. - The company has over 30 domestic and more than 10 international products in the research pipeline[54]. Market and Product Development - The company has established eight production bases globally and maintains a GMP quality management system[54]. - The company has initiated multiple global collaborations, including a partnership with Abacus Medicine Pharma Services for the exclusive distribution of Lurbinectedin in Hong Kong[91]. - The company signed an agreement with Zhengda Qingdao for the exclusive sales rights of Dushudan injection in mainland China in January 2023[91]. - The company completed strategic cooperation with Baijie Shenzhou for the commercialization of its innovative formulation, Goserelin microspheres, in mainland China in July 2023[91]. Future Outlook - The company plans to continue expanding its market presence and investing in new product development to drive future growth[20]. - The group expects existing products to achieve stable growth, with new products approved in the past three years anticipated to ramp up quickly[93]. - The innovative formulation of Baitowei for prostate and breast cancer treatment has been approved for commercialization in China, with a significant market potential estimated at RMB 9.72 billion[94].

Reward Shares - The total number of reward shares granted in the fiscal year 2022 was 26,389,000, with 25,206,000 shares having vested by May 15, 2022[1] - As of December 31, 2022, there were no unvested reward shares held by the top five highest-paid employees, who collectively held 1,135,000 unvested shares at the beginning of the fiscal year[2] - The closing price of the shares on the stock exchange prior to the vesting date was HKD 2.33 per share[2]

Financial Performance - Revenue increased by RMB 53.3 million or 1.9% to RMB 2,904.1 million compared to the six months ended June 30, 2022[7]. - Gross profit decreased by RMB 106.7 million or 5.2% to RMB 1,943.4 million, with a gross margin of 66.9%[7]. - Net profit attributable to shareholders decreased by RMB 147.0 million or 49.5% to RMB 150.0 million[7]. - EBITDA decreased by RMB 48.7 million or 5.3% to RMB 867.3 million[7]. - The group recorded a significant increase in product sales revenue of 18.7% to RMB 2,784.5 million for the six months ended June 30, 2023, compared to the same period in 2022[9]. - Total revenue, including product sales and licensing agreements, increased by 1.9% to RMB 2,904.1 million during the same period[9]. - In the oncology treatment sector, revenue decreased by 11.2% to RMB 910.3 million, while cardiovascular treatment revenue increased by 24.2% to RMB 977.9 million[10]. - The central nervous system treatment revenue rose by 4.4% to RMB 680.4 million, whereas metabolic treatment revenue decreased by 23.4% to RMB 247.1 million[10]. - The group’s net profit for the six months ended June 30, 2023, was approximately RMB 145.4 million, a decrease of about RMB 157.8 million or 52.0% compared to RMB 303.2 million for the same period in 2022[52]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 4.06, down from RMB 8.54 in 2022, representing a decline of approximately 52.4%[80]. Research and Development - As of June 30, 2023, the group has 39 products under development in China, including 13 oncology products and 12 CNS products[4]. - The R&D team consists of 908 employees, including 79 PhDs and 447 Master's degree holders[3]. - The group holds 272 patents in China and 481 patents overseas, with additional patents pending[3]. - The group aims to continue investing in the strategic therapeutic areas of oncology, CNS, cardiovascular, and digestive and metabolic diseases[3]. - The company continues to invest in four strategic therapeutic areas: oncology, central nervous system, cardiovascular, and metabolic diseases, with 39 products in various stages of development in China as of June 30, 2023[23]. - LY03003, a long-acting injectable for Parkinson's disease, has its New Drug Application (NDA) accepted by the CDE in August 2023, marking it as the first global product to provide continuous dopamine stimulation[25]. - Bai Tuo Wei (Goserelin microspheres) is the first and only approved long-acting microsphere formulation globally, approved in June 2023 for prostate cancer treatment, and in September 2023 for breast cancer in premenopausal women[26]. - The innovative microsphere technology of Bai Tuo Wei significantly improves patient experience with a needle diameter of only 0.8 mm, enhancing the drug delivery process[26]. Market and Product Development - The group has established a national sales and distribution network covering over 21,660 hospitals across 31 provinces in China[3]. - The group has established a global supply chain with 8 production bases and a GMP quality management system[8]. - The group has over 30 domestic and more than 10 international products in the pipeline, focusing on innovative drug delivery technologies[8]. - The group’s major products in China include 4 oncology drugs, 3 central nervous system drugs, 3 cardiovascular drugs, and 1 metabolic drug[10]. - The company aims to maintain or steadily grow its market share in high-prevalence disease areas with its 12 major products[11]. - The flagship product Xuezhikang generated over RMB 1 billion in sales in 2021 and is expected to maintain double-digit growth in the coming years[38]. - The company plans to expand its sales team in core therapeutic areas and deepen its market coverage in oncology and central nervous system treatments[42]. Financial Position and Liabilities - The total assets as of June 30, 2023, amounted to RMB 26,300.2 million, while total liabilities were RMB 14,105.9 million[7]. - As of June 30, 2023, the group had total borrowings of approximately RMB 8,372.6 million, an increase from RMB 7,642.7 million as of December 31, 2022[54]. - The company reported a total of RMB 12,855,350,000 in financial liabilities as of June 30, 2023, including interest-bearing loans and borrowings of RMB 7,642,713,000[157]. - The company has secured bank loans with actual interest rates ranging from 2.80% to 5.00% due between 2023 and 2024, totaling RMB 3,388,117 thousand[132]. - The company has a total of RMB 379,664 thousand in other non-current liabilities as of June 30, 2023[136]. Shareholder Information and Corporate Governance - Major shareholders include Green Leaf Pharmaceutical Investment Limited, holding 1,257,196,703 shares (33.42%)[67]. - Hillhouse NEV Holdings Limited holds 552,324,108 shares, representing 14.68% of the company[67]. - UBS Group AG has a holding of 414,017,118 shares (11.01%) and 368,053,174 shares in short positions (9.78%)[67]. - The company has complied with all applicable corporate governance code provisions except for the separation of the roles of Chairman and CEO, which are held by the same individual[60]. - The company’s audit committee reviewed the unaudited interim financial statements for the six months ended June 30, 2023, and recommended their adoption to the board[63]. Cash Flow and Investments - Net cash flow from operating activities increased to RMB 689,727 thousand, up from RMB 604,447 thousand year-over-year, representing a growth of approximately 14.1%[89]. - Total cash and cash equivalents at the end of the period reached RMB 4,472,767 thousand, compared to RMB 3,372,826 thousand in the previous year, reflecting an increase of about 32.5%[90]. - Cash flow from investing activities showed a net outflow of RMB 78,019 thousand, a significant decrease from a net inflow of RMB 319,776 thousand in the prior year[89]. - The company reported a significant increase in interest expenses, totaling RMB 306,837 thousand, up from RMB 214,111 thousand, which is an increase of about 43.3%[88]. Related Party Transactions and Legal Matters - The group reported related party transactions totaling RMB 5,035,000 in product sales to Steward Cross and RMB 2,709,000 to Qingdao Luye for the six months ended June 30, 2023[142]. - The group has outstanding receivables from related parties amounting to RMB 24,673,000 as of June 30, 2023, with significant amounts due from Yantai Painuo (RMB 19,411,000) and Qingdao Luye (RMB 1,365,000)[144]. - The group has received approval to appeal a court decision regarding the arbitration ruling, with a hearing scheduled for the end of 2023[138]. Employee Incentives and Share Plans - The company adopted a share incentive plan on January 10, 2017, which is effective for ten years, aimed at rewarding employees and retaining talent[146]. - The share incentive plan was terminated early on January 20, 2023, due to the share price falling below HKD 4, resulting in all granted shares becoming void[148]. - The company confirmed zero expenses related to share-based payments during the reporting period, compared to RMB 6,966,000 for the six months ending June 30, 2022[150].

Financial Performance - Revenue increased by RMB 53.3 million or 1.9% to RMB 2,904.1 million compared to the six months ended June 30, 2022[2] - Gross profit decreased by RMB 106.7 million or 5.2% to RMB 1,943.4 million, with a gross profit margin of 66.9%[2] - Net profit attributable to shareholders decreased by RMB 147.0 million or 49.5% to RMB 150.0 million[2] - EBITDA decreased by RMB 48.7 million or 5.3% to RMB 867.3 million[2] - Basic earnings per share were RMB 4.06, down from RMB 8.54 for the six months ended June 30, 2022[3] - Total revenue for the six months ended June 30, 2023, was RMB 2,904,108 thousand, an increase from RMB 2,850,826 thousand for the same period in 2022, representing a growth of approximately 1.9%[24] - The pre-tax profit for the six months ended June 30, 2023, was RMB 922,980 thousand, compared to RMB 800,742 thousand for the same period in 2022, indicating an increase of about 15.3%[25] - Total tax expense for the six months ended June 30, 2023, was RMB 83,634,000, an increase of 15.5% compared to RMB 72,187,000 for the same period in 2022[28] - The group’s total comprehensive income attributable to equity holders of the parent company for the six months ended June 30, 2023, was RMB (201) thousand, compared to RMB (140) thousand for the same period in 2022[18] Assets and Liabilities - Total assets as of June 30, 2023, were RMB 14,892.5 million, compared to RMB 14,762.4 million as of December 31, 2022[6] - Non-current assets increased to RMB 13,191.2 million from RMB 13,463.8 million[5] - Current assets totaled RMB 13,109.0 million, up from RMB 10,785.8 million[5] - Total equity attributable to equity holders of the parent increased to RMB 11,334.8 million from RMB 10,175.9 million[6] - Non-current liabilities decreased to RMB 2,698,179 thousand as of June 30, 2023, down from RMB 3,720,700 thousand as of December 31, 2022, representing a decline of about 27.4%[7] - Trade receivables and notes receivable as of June 30, 2023, amounted to RMB 1,876,917,000, an increase from RMB 1,435,170,000 as of December 31, 2022[31] - Trade payables as of June 30, 2023, totaled RMB 439,628,000, an increase from RMB 417,814,000 as of December 31, 2022[38] - The total amount of discounted notes receivable was RMB 1,783,389,000 as of June 30, 2023, compared to RMB 1,713,387,000 as of December 31, 2022[34] - As of June 30, 2023, the total interest-bearing bank and other borrowings amounted to RMB 8,372,648 thousand, an increase from RMB 7,642,713 thousand as of December 31, 2022[40][41] Corporate Governance and Compliance - The company has adopted new and revised International Financial Reporting Standards (IFRS) effective from January 1, 2023, which may impact the disclosures in the annual financial statements[12] - The board did not recommend the payment of an interim dividend for the six months ended June 30, 2023[2] - The company has adopted high standards of corporate governance, complying with all applicable codes except for a deviation regarding the separation of the roles of Chairman and CEO[107] - The independent auditor has reviewed the unaudited interim financial results for the six months ended June 30, 2023, in accordance with the relevant auditing standards[111] Research and Development - The R&D team consists of 908 employees, including 79 PhDs and 447 Master's degree holders, with 272 patents granted in China as of June 30, 2023[67] - The company has 39 products in various stages of development in China, including 18 oncology products and 15 central nervous system products[67] - The company continues to invest in four strategic therapeutic areas: oncology, central nervous system, cardiovascular, and metabolism[67] - The company has developed over 30 domestic and more than 10 international products in its pipeline, maintaining a high level in innovative drug delivery technologies[51] Market and Product Performance - The company recorded product sales revenue of RMB 2,784.5 million, representing an 18.7% growth, and total revenue of RMB 2,904.1 million during the reporting period[84] - In the oncology treatment sector, revenue decreased by 11.2% to RMB 910.3 million, while cardiovascular treatment revenue increased by 24.2% to RMB 977.9 million[54] - The company has established a strong competitive advantage in 12 major products across high-prevalence disease areas, with market share expected to grow or maintain current levels[54] - The product "Baituo Wei" is expected to have significant market potential in China, with rapid sales growth anticipated due to strategic collaboration with BeiGene[85] Strategic Initiatives - The company aims to enhance management efficiency and reduce unnecessary expenses to navigate macroeconomic challenges[89] - The sales team for core therapeutic areas will be expanded to solidify market position in oncology and deepen coverage in the central nervous system treatment field[89] - The company will actively seek partnerships and explore domestic and international markets to ensure sustainable growth[89] - The strategic partnership with Abacus Medicine Pharma Services grants exclusive distribution rights for NPP drugs in Hong Kong, initiated in January 2023[81]

Financial Performance - Revenue increased by RMB 781.5 million or 15.0% to RMB 5,981.7 million compared to the year ended December 31, 2021[12]. - EBITDA rose by RMB 905.9 million or 99.9% to RMB 1,812.8 million compared to the year ended December 31, 2021[12]. - Gross profit increased by RMB 743.8 million or 21.9% to RMB 4,140.5 million, with a gross margin of 69.2%[12]. - Net profit attributable to shareholders was RMB 604.8 million, an increase of RMB 739.2 million compared to the loss for the year ended December 31, 2021[12]. - Normalized EBITDA grew by 44.8% year-on-year to RMB 1.9626 billion, while normalized net profit attributable to shareholders surged by 101.8% to RMB 886 million[14]. - The company recorded a revenue growth of 15.0% in 2022, reaching RMB 5,981.7 million, despite challenges from government policies and the COVID-19 pandemic[68]. - The company expects significant revenue growth in 2023 due to the commercialization of new products and the introduction of several new therapies[68]. Research and Development - R&D expenses increased by RMB 174.2 million or 25.5% to RMB 857.3 million compared to the year ended December 31, 2021[12]. - The company holds 257 patents in China and 486 patents overseas as of December 31, 2022[4]. - The R&D team consists of 934 employees, including 81 PhDs and 459 master's degree holders[4]. - The company has 35 products in various stages of development in China, including 15 oncology products[4]. - The company continues to invest in four strategic therapeutic areas: oncology, central nervous system, cardiovascular, and digestive and metabolic products, with 35 research products at various development stages in China as of December 31, 2022[40]. - The company has eight products under NDA review in various markets, with five products undergoing NDA review in mainland China[79]. Product Development and Launches - The company successfully launched several new drugs, including Rykindo® and the first domestically developed antidepressant, Ruo Xin Lin®[15]. - The oncology segment saw a revenue increase of 63.1%, amounting to RMB 2.3058 billion, while the cardiovascular segment's revenue rose by 7.6% to RMB 1.5357 billion[24]. - The product Lurbinectedin for small cell lung cancer has shown a 45.5% overall response rate in a Phase I trial in China, with a median progression-free survival of 6.6 months[46]. - The new drug LY03005 for generalized anxiety disorder has been approved for Phase III clinical trials in China, marking a significant breakthrough in local drug development[48]. - The product Ruoxinlin, approved for depression treatment, is the first domestically developed Class 1 chemical new drug with independent intellectual property rights in China[76]. - The product Boyoubai, launched in November 2022, is the world's first approved biosimilar of Prolia for osteoporosis treatment in postmenopausal women[77]. Market Presence and Sales - The company has established a national sales and distribution network covering over 20,150 hospitals in China[3]. - The company operates in over 80 countries and regions globally, including the US, EU, and Japan[3]. - The company has established strong sales partnerships across over 80 countries, enhancing its global market presence[58]. - The product Xuezhikang generated over RMB 1 billion in sales in 2021 and is expected to maintain double-digit growth in the coming years[71]. - The product Oukai has been rapidly growing and is now a significant product in the cardiovascular treatment sector, with ongoing exploration of its market potential[71]. Financial Position and Capital Management - As of December 31, 2022, the group's net current assets were approximately RMB 1,298.6 million, down from RMB 3,066.5 million as of December 31, 2021[97]. - The current ratio decreased from approximately 1.42 on December 31, 2021, to approximately 1.14 on December 31, 2022, primarily due to an increase in loans and borrowings[97]. - Total borrowings amounted to approximately RMB 7,642.7 million as of December 31, 2022, compared to RMB 7,620.1 million as of December 31, 2021[98]. - The company issued convertible bonds totaling RMB 1,200 million and RMB 300 million in August and September 2022, respectively, with a conversion price of HKD 3.50 per share[104]. - The net proceeds from the August 2022 convertible bonds were approximately HKD 1,371.15 million, with planned uses including RMB 548.46 million for product development and RMB 411.35 million for debt repayment[110]. Corporate Governance and Management - The company has a strong board of directors, including Mr. Song Ruilin, who has extensive experience in healthcare law and policy, and has held various significant positions in the industry[128]. - The company is committed to enhancing its corporate governance through a diverse and experienced board of directors, ensuring effective oversight and strategic direction[135]. - The company has established a remuneration committee to review its remuneration policies and structures for all directors and senior management, considering the company's performance and market practices[192]. - The independent non-executive directors have confirmed their independence according to the listing rules, and the company considers all of them to be independent[185]. Risk Management and Compliance - The company has established risk management procedures to mitigate financial risks, including interest rate, foreign exchange, credit, and liquidity risks[165]. - The company has allocated resources to ensure compliance with regulatory requirements, maintaining good relationships with regulatory authorities[170]. - The company has a structured approach to managing operational risks through standard operating procedures and regular assessments[160]. Employee and Operational Insights - As of December 31, 2022, the company employed 5,005 staff, an increase from 4,845 staff as of December 31, 2021[117]. - Employee costs for the year ended December 31, 2022, were approximately RMB 778.3 million, down from RMB 830.0 million in the previous year[117]. - The company aims to attract and retain skilled personnel by offering competitive compensation packages[162].

Financial Performance - Revenue increased by RMB 781.5 million or 15.0% to RMB 5,981.7 million compared to the year ended December 31, 2021[2] - EBITDA rose by RMB 905.9 million or 99.9% to RMB 1,812.8 million, while normalized EBITDA increased by RMB 607.3 million or 44.8% to RMB 1,962.6 million[2] - Gross profit increased by RMB 743.8 million or 21.9% to RMB 4,140.5 million, with a gross profit margin of 69.2%[2] - Net profit attributable to shareholders was RMB 604.8 million, an increase of RMB 739.2 million compared to a net loss in the previous year[2] - Total comprehensive income for the year was RMB 576.9 million, compared to a loss of RMB 168.9 million in the previous year[6] - Basic earnings per share were RMB 17.38, compared to a loss of RMB 3.90 per share in the previous year[5] Revenue Breakdown - The revenue from product sales was RMB 5,059,298,000, with significant contributions from various therapeutic areas including cardiovascular and oncology[18] - Revenue in the oncology treatment sector increased by 63.1% to RMB 2,305.8 million in 2022[53] - Cardiovascular treatment revenue rose by 7.6% to RMB 1,535.7 million, while central nervous system treatment revenue decreased by 0.1% to RMB 1,322.7 million[53] - The sales revenue from digestive and metabolic products decreased to RMB 632.4 million, a decline of approximately RMB 266.1 million or 29.6% compared to RMB 898.5 million in the previous year[90] Expenses and Costs - Research and development expenses increased by RMB 174.2 million or 25.5% to RMB 857.3 million, with total R&D expenses amounting to RMB 1,399.4 million[2] - Administrative expenses for the year were RMB 582,870,000, while other expenses totaled RMB 990,405,000[18] - Financial costs rose to RMB 471,755 thousand in 2022 from RMB 399,458 thousand in 2021, marking an increase of about 18.1%[31] - Total tax expense for the year was RMB 86,466 thousand, compared to RMB 70,226 thousand in 2021, indicating an increase of approximately 23.1%[34] Assets and Liabilities - Non-current assets increased to RMB 13,463,812 thousand in 2022 from RMB 12,185,397 thousand in 2021, representing an increase of approximately 10.5%[8] - Current assets totaled RMB 10,785,813 thousand in 2022, up from RMB 10,396,664 thousand in 2021, reflecting a growth of about 3.7%[8] - Total liabilities rose to RMB 13,207,903 thousand in 2022, compared to RMB 13,468,158 thousand in 2021, indicating a decrease of approximately 1.9%[9] - The company's net assets increased to RMB 11,041,722 thousand in 2022, up from RMB 9,113,903 thousand in 2021, marking a growth of around 21.1%[10] Shareholder Returns - The board did not recommend the declaration of any dividend for the year ended December 31, 2022[5] - No interim or final dividends were declared for the year ended December 31, 2022, consistent with 2021[36] Market and Product Development - The company is investing in four strategic therapeutic areas: oncology, central nervous system, cardiovascular, and digestive and metabolic diseases, with 35 products in various stages of development in China[65] - The company has eight products under NDA review in various markets, with five products undergoing NDA review in mainland China[88] - The newly launched product, Bo You Bei, is the world's first approved biosimilar of Prolia for treating osteoporosis in postmenopausal women, significantly reducing fracture risks[87] Compliance and Governance - The company has complied with all applicable corporate governance codes as of December 31, 2022, with one exception regarding the roles of the chairman and CEO[111] - The company has confirmed compliance with the standard code of conduct for securities trading by all directors for the year ending December 31, 2022[112]