Financial Performance - The company's revenue increased by 18.4% to RMB 1,624.6 million for the year ended December 31, 2022, compared to RMB 1,372.1 million for the year ended December 31, 2021[2]. - The net profit for the year ended December 31, 2022, was RMB 183.6 million, a significant recovery from a net loss of RMB 506.9 million in the previous year[2]. - Adjusted net profit rose to RMB 200.8 million for the year ended December 31, 2022, up from RMB 156.7 million in the previous year, representing an increase of 28.1%[2]. - Gross profit for the year ended December 31, 2022, was RMB 499.5 million, down from RMB 620.3 million in the previous year[3]. - The total comprehensive income for the year ended December 31, 2022, was RMB 175.3 million, compared to a loss of RMB 469.9 million in the previous year[5]. - Basic earnings per share for the year ended December 31, 2022, was RMB 0.80, recovering from a loss of RMB 4.38 in the previous year[6]. - The company's pre-tax profit for the reporting period was RMB 273,188 thousand, compared to RMB 343,048 thousand in the previous year, indicating a decline[26]. - The total income tax expense for the year was RMB 15,158 thousand, an increase from RMB 11,136 thousand in the previous year[31]. - The basic earnings per share for the year was RMB 0.796, compared to a loss of RMB 4.375 in the previous year, reflecting a significant turnaround[34]. - The company's total revenue increased by 18.4% from RMB 1,372.1 million in 2021 to RMB 1,624.6 million in 2022, primarily driven by the growth in healthcare solutions revenue[59]. Assets and Liabilities - The company's total assets as of December 31, 2022, amounted to RMB 3,418.9 million, an increase from RMB 3,167.5 million as of December 31, 2021[7]. - Non-current assets increased to RMB 1,254.0 million as of December 31, 2022, from RMB 1,094.9 million in the previous year[7]. - The company's total equity as of December 31, 2022, was RMB 1,722.1 million, up from RMB 1,549.4 million in the previous year[8]. - Cash and cash equivalents totaled RMB 994,330 thousand, a slight decrease from RMB 1,030,704 thousand in the previous year[38]. - The company's bank loans amounted to RMB 18,936,000 (2022) compared to RMB 28,525,000 (2021), reflecting a decrease of approximately 33.9%[41]. - Other borrowings increased to RMB 52,235,000 in 2022 from RMB 55,788,000 in 2021, indicating a decrease of about 6.4%[41]. - The company's debt-to-equity ratio was 4.1%, down from 5.4% as of December 31, 2021[88]. - Total interest-bearing bank and other borrowings amounted to RMB 71.2 million as of December 31, 2022, compared to RMB 84.3 million as of December 31, 2021[86]. Revenue Sources - Revenue from healthcare solutions was RMB 1,595,717 thousand, while sales of healthcare products amounted to RMB 28,844 thousand in 2022[19]. - Revenue from the national medical insurance reimbursement scheme accounted for 28.8% of total revenue in 2022, up from 27.8% in 2021, due to more offline medical institutions qualifying for reimbursement[64]. - Revenue from offline medical institutions increased by 12.0% from RMB 1,218.9 million in 2021 to RMB 1,364.9 million in 2022, consistent with the growth of newly acquired and existing institutions[66]. - Revenue from the online healthcare platform surged by 69.5% from RMB 153.2 million in 2021 to RMB 259.6 million in 2022, driven by increased customer visits and growth in specific geographic regions[66]. Expenses and Costs - The cost of providing healthcare solutions was RMB 1,107,644 thousand in 2022, up from RMB 735,635 thousand in 2021[25]. - The company's cost of sales rose by 49.6% from RMB 751.8 million in 2021 to RMB 1,125.0 million in 2022, primarily due to increased physician costs and operational expenses[67]. - The company's sales cost increased by 17.6% from RMB 751.8 million in 2021 to RMB 884.1 million in 2022, primarily due to the expansion of the physician group and increased material costs[68]. - Gross profit decreased by 19.5% from RMB 620.3 million in 2021 to RMB 499.5 million in 2022, mainly due to a significant increase in sales costs following the restructuring of offline medical institutions[70]. - Administrative expenses decreased by 59.6% from RMB 248.0 million for the year ended December 31, 2021, to RMB 100.2 million for the year ended December 31, 2022[77]. - Other expenses reduced by 81.3% from RMB 52.2 million for the year ended December 31, 2021, to RMB 9.8 million for the year ended December 31, 2022[79]. - Financing costs decreased by 38.0% from RMB 28.4 million for the year ended December 31, 2021, to RMB 17.6 million for the year ended December 31, 2022[80]. Customer Acquisition and Retention - The company reported a total of 551,999 new customers in the year ended December 31, 2022, compared to 526,820 in 2021, indicating effective customer acquisition strategies[51]. - The cumulative number of customers reached 2,732,824 by the end of 2022, up from 2,180,825 in 2021, reflecting a growth of approximately 25.3%[51]. - Customer visit frequency increased, with 2,945 thousand visits recorded in 2022, compared to 2,673 thousand in 2021, representing a growth of about 10.1%[51]. - The customer retention rate improved to 64.0% in 2022 from 62.8% in 2021, demonstrating effective customer retention strategies[51]. - The member retention rate was 86.4% in 2022, slightly down from 87.3% in 2021[53]. Strategic Initiatives and Future Plans - The company aims to combine traditional Chinese medicine with Western medical practices, focusing on chronic disease management and long-term health monitoring[45]. - The company plans to enhance its OMO platform and brand value while attracting quality medical resources to address the challenges of access and affordability in healthcare services[56]. - Future strategies include increasing R&D investment for productization and standardization of medical health solutions, with several in-house formulations already in trial production[57]. - The company aims to leverage digitalization and "Internet+" initiatives to enhance remote medical services and improve customer retention and average revenue per user[57]. - The company has established partnerships with 13 third-party online platforms to enhance online appointment services, expanding its digital reach[49]. Regulatory and Compliance - The company has adopted revised Hong Kong Financial Reporting Standards, which did not impact its financial position or performance for the year[13]. - The revised standards clarify the assessment of whether a contract is loss-making, including direct costs related to contract fulfillment[14]. - The company has not identified any loss contracts under the revised standards, indicating stable contract performance[14]. - The audit committee has reviewed the accounting practices and policies adopted by the group for the year ending December 31, 2022[103]. Miscellaneous - The company did not recommend any dividend payments for the years ended December 31, 2022, and 2021[32]. - The company has not experienced any strikes or significant labor disputes during the reporting period[94]. - No major litigation or arbitration involving the company or its subsidiaries as of the announcement date[100].

Financial Performance - Revenue for the first half of 2022 reached RMB 702.9 million, an increase of 17.5% compared to RMB 598.2 million in the same period of 2021[5] - Gross profit decreased to RMB 198.9 million, down 25.8% from RMB 268.1 million, resulting in a gross margin of 28.3%[5] - Adjusted net profit increased by 40.1% to RMB 64.3 million, compared to RMB 45.9 million in the previous year[5] - The company reported a net profit of RMB 55.8 million, a significant turnaround from a net loss of RMB 349.7 million in the same period last year[5] - The adjusted net profit margin improved to 9.2%, up from 7.7% in the previous year[5] - Revenue from healthcare solutions increased by 16.7% to RMB 687.5 million for the six months ended June 30, 2022, compared to RMB 588.9 million for the same period in 2021[19] - Revenue from the sale of healthcare products rose by 65.2% to RMB 15.4 million for the six months ended June 30, 2022, up from RMB 9.3 million in the prior year[19] - Total revenue for the six months ended June 30, 2022, was RMB 702.9 million, representing a 17.5% increase from RMB 598.2 million in the same period of 2021[19] - The company recorded the highest revenue generated from medical health solutions among private TCM service providers in China as of June 30, 2022[15] Customer Metrics - As of June 30, 2022, the company had 246,325 new customers, an increase from 227,500 in the same period of 2021, representing an increase of approximately 8.0%[11] - The total cumulative customer count reached 2,427,150 as of June 30, 2022, compared to 1,881,505 at the end of the same period in 2021, reflecting a growth of about 29.1%[11] - The number of customer visits increased to 1,323,000 in the first half of 2022, up from 1,181,000 in the same period of 2021, marking an increase of approximately 12.0%[11] - The cumulative number of customer visits reached 11,253,000 as of June 30, 2022, compared to 8,437,000 in the same period of 2021, indicating a growth of about 33.4%[11] - The customer retention rate improved to 66.9% in the first half of 2022, up from 61.5% in the same period of 2021[11] - The average spending per visit was RMB 531 in the first half of 2022, compared to RMB 507 in the same period of 2021, reflecting an increase of approximately 4.7%[11] Operational Developments - The online healthcare platform has been integrated with offline medical institutions to enhance service delivery and customer reach[6] - A digital staff system has been established at offline medical institutions to improve customer interaction and operational efficiency[7] - The company is strategically expanding its offline presence based on online physician and customer activity levels[6] - The company expanded its medical service network by acquiring Beijing Guozong Jishi Traditional Chinese Medicine Hospital in May 2022, enhancing its offline medical service capabilities[10] - The company operates 44 medical institutions across major cities in China, including Beijing, Shanghai, and Guangzhou, as of June 30, 2022[10] - The company has established partnerships with 10 third-party online platforms to provide online appointment services, enhancing customer accessibility[10] Market and Regulatory Environment - The company is positioned to benefit from favorable government policies encouraging the development of online healthcare services[6] - The Chinese government has implemented policies to support the development of traditional Chinese medicine, which is expected to positively impact the company's operations and growth prospects[9] Financial Management - Total sales costs increased by 52.7% to RMB 504.0 million for the six months ended June 30, 2022, compared to RMB 330.1 million in the same period of 2021[24] - The cost of physicians and materials accounted for 77.2% of total sales costs, amounting to RMB 389.3 million, while additional operating expenses for offline medical institutions were RMB 114.7 million[25] - Sales cost increased by 17.9% from RMB 330.1 million for the six months ended June 30, 2021, to RMB 389.3 million for the six months ended June 30, 2022, primarily due to the expansion of the physician group and increased material costs[27] - Gross profit margin for medical health solutions was stable at 44.8% for the six months ended June 30, 2021, and decreased slightly to 44.7% for the six months ended June 30, 2022[30] - Other income and gains increased by 12.2% from RMB 10.3 million for the six months ended June 30, 2021, to RMB 11.6 million for the six months ended June 30, 2022, mainly due to increased interest income[31] Shareholder Information - As of June 30, 2022, the total number of issued shares was approximately 230,396,458[58] - Major shareholders include Wumianshan Ltd. with 30,043,777 shares (13.04%) and Action Thrive with 26,832,533 shares (11.65%)[65] - The shareholding structure indicates a concentration of ownership among a few entities, with several holding over one-third of the interests in various partnerships[69] - The pre-IPO share option plan was approved on March 31, 2021, allowing for the grant of options totaling 16,382,286 shares, which is approximately 7.11% of the total issued shares[72] Future Outlook - The company provided a future outlook, projecting a revenue growth of BB% for the next fiscal year, driven by new product launches and market expansion strategies[146] - New product development efforts include the introduction of a herbal medicine line, expected to contribute an additional CC million in revenue by the end of 2023[146] - The company is exploring market expansion opportunities in Southeast Asia, targeting a market share increase of DD% within the next two years[146] - A strategic acquisition of a local competitor is anticipated to enhance the company's market position and is expected to close by the end of Q4 2022[146] Corporate Governance - The company has established an audit committee consisting of two independent non-executive directors and one non-executive director to oversee compliance and financial reporting[50] - The company has committed to maintaining high standards of corporate governance, having adopted the corporate governance code as per the listing rules[48]

Financial Performance - The company's revenue for the year ended December 31, 2021, reached RMB 1.372 billion, representing a year-on-year growth of 48.3% compared to RMB 925.366 million in 2020[9]. - Gross profit for the same period was RMB 620.304 million, an increase of 41.8% from RMB 437.490 million in the previous year[9]. - Adjusted net profit amounted to RMB 156.719 million, reflecting an 85% increase from RMB 84.709 million in 2020[9]. - The company reported a pre-tax loss of RMB 518.022 million, which is a 114.3% increase from a loss of RMB 241.763 million in 2020[9]. - The basic loss per share was RMB (4.38), compared to RMB (3.28) in the previous year, indicating a 33.5% increase in loss per share[9]. - The gross margin for 2021 was 45.2%, down from 47.3% in 2020, showing a decrease of 2.1 percentage points[9]. - The company reported a significant increase in new customers, reaching 526,820 for the year ended December 31, 2021, compared to 361,754 in 2020, representing a growth of approximately 45.5%[25]. - Cumulative customers at the end of the year totaled 2,180,825, up from 1,654,005 in the previous year, indicating a growth of about 31.7%[25]. - The number of customer visits increased to 2,673,000, a rise from 1,787,000 in 2020, reflecting a growth of approximately 49.5%[25]. - The customer retention rate improved to 62.8% in 2021, compared to 57.5% in 2020, showing an increase of 5.3 percentage points[25]. Business Operations - The company operates a network of over 300 cities across China, establishing itself as a leading chain of traditional Chinese medicine services[11]. - The company operates 42 offline medical institutions across 11 cities, establishing a standardized and branded chain of medical halls[15]. - Over 20,000 renowned traditional Chinese medicine practitioners provide services through the company's online and offline network[15]. - The company has signed strategic cooperation agreements with over ten traditional Chinese medicine universities and top-tier hospitals to enhance clinical capabilities[15]. - The implementation of the OMO business model allowed the company to maintain service continuity during the COVID-19 pandemic, shifting to online consultations when necessary[16]. - The company aims to promote high-quality medical resources through a modernized traditional Chinese medicine medical alliance[15]. - The company aims to strengthen partnerships with public hospitals and traditional Chinese medicine universities to enhance resource allocation at the grassroots level[20]. - The company has established a rapid response mechanism to address various levels of pandemic impact, ensuring uninterrupted medical services[16]. Membership and User Engagement - Membership user count increased significantly from 25,310 in 2019 to 139,039 in 2021, with a retention rate exceeding 50%[13]. - Membership user consumption ratio rose from 8% in 2019 to 31% in 2021, with average revenue per member being about twice that of non-members[13]. - The company reported a member annual retention rate of approximately 88.2%, 89.1%, and 87.3% over the past three years[13]. - Average user spending per visit over the past three years was approximately RMB 515, 518, and 513, indicating stable customer spending[13]. - The average spending of members rose to RMB 3,118 in 2021, compared to RMB 2,782 in 2020, reflecting an increase of about 12.1%[27]. Strategic Initiatives - The company plans to develop OMO (Online-Merge-Offline) business to enhance internet-based traditional Chinese medicine services, aiming for high-quality growth in 2022[19]. - Increased R&D investment is planned to establish a product system for common prescriptions and treatment pathways for the top five diseases[20]. - The company intends to expand its membership system and explore new service models, including family doctor services[20]. - A high-quality expansion strategy will be implemented, focusing on both existing and new city layouts[20]. - The company will enhance supply chain supervision and digital capabilities to improve the quality of traditional Chinese medicine[20]. - The company aims to maintain industry-leading revenue growth while addressing public healthcare accessibility issues[20]. Digital Transformation and Compliance - The company invested significantly in digital operations and compliance management in 2021, enhancing user experience and increasing patient return rates through a digital store system[17]. - The company plans to enhance its OMO platform and attract quality medical resources to address healthcare service challenges[32]. - Future strategies include the introduction of smart hardware for remote medical services and the development of in-house formulations for various medical conditions[32]. - The company aims to strengthen risk management and internal controls to ensure stable growth amid market fluctuations and supply chain risks[33]. Governance and Management - The company has a strategic focus on expanding its business through the expertise of its board members in various sectors, including healthcare and investment[62][63][65]. - The management team is composed of individuals with extensive backgrounds in finance, investment, and healthcare, enhancing the company's strategic decision-making capabilities[63][65]. - The company is committed to maintaining high standards of governance and oversight through its experienced board and management team[63][65]. - The board includes members with significant experience in both domestic and international markets, which is expected to benefit the company's strategic direction[63][65]. - The company has established formal procedures for evaluating the independence of non-executive directors and for succession planning[172]. Environmental, Social, and Governance (ESG) - The company has established an ESG governance framework, with a dedicated ESG management committee to oversee the implementation of ESG policies[196]. - The board of directors is responsible for setting ESG management policies and strategies, with a focus on identifying and managing ESG-related risks[195]. - The company has committed to sustainable development and has set important ESG performance indicators to ensure goal achievement[195]. - The first ESG report covers the company's performance from January 1, 2021, to December 31, 2021, adhering to the ESG reporting guidelines[193]. Shareholder Relations - The company emphasizes active communication with shareholders and stakeholders, ensuring timely disclosure of significant developments[190]. - The company has a dedicated investor relations department to address shareholder inquiries and concerns[191]. - The company’s annual general meeting requires at least 21 days' notice, ensuring shareholder participation in key decisions[190]. - The company has a structured process for shareholders to propose special meetings and resolutions, enhancing shareholder rights[191].