Financial Performance - In the first half of 2024, Hua Medicine's sales revenue reached RMB 102.7 million, a 46.0% increase compared to RMB 70.3 million in the first half of 2023[3]. - The gross profit for the first half of 2024 was RMB 47.8 million, with a gross margin of 46.5%, down from 62.6% in the first half of 2023 due to a 64.1% price reduction after inclusion in the national medical insurance catalog[3]. - The company reported a pre-tax loss of approximately RMB 142.2 million for the first half of 2024, an increase of about RMB 52.1 million or 57.9% from the previous year[4]. - The company reported a total comprehensive loss for the period was RMB 141,977,000, compared to RMB 90,547,000 in the previous year, highlighting ongoing financial challenges[54]. - The company reported a net loss attributable to equity holders for the period was RMB 142,241,000, resulting in a basic and diluted loss per share of RMB (0.15)[54]. Sales and Market Expansion - Sales of Huadongning® reached 846,000 boxes in the first half of 2024, significantly up from 212,000 boxes in the same period of 2023[2]. - 华堂宁® generated revenue of RMB 102.7 million in the first half of 2024, with over 846,000 boxes sold, representing an increase of 634,000 boxes or RMB 32.3 million compared to the same period in 2023[9]. - Over 2,100 hospitals and more than 2,900 pharmacies prescribed Huadongning® as of June 30, 2024, compared to 143 hospitals and 1,080 pharmacies in the same period of 2023[2]. - The company has successfully entered the National Medical Insurance Drug List, which is expected to significantly boost sales of 华堂宁® in the coming years[9]. Research and Development - Research and development expenses for the first half of 2024 totaled approximately RMB 119.8 million, an increase of about RMB 48.8 million or 68.7% compared to the same period in 2023[4]. - Clinical studies for HMM0601 and HMM0701 are ongoing, with 1,368 and 102 patients recruited respectively, focusing on the long-term safety and clinical benefits of dorzagliatin[3]. - The company plans to launch a new fixed-dose combination drug containing dorzagliatin and metformin by 2028, targeting type 2 diabetes and its complications[7]. - The company is exploring additional indications for dorzagliatin, including kidney disease, neurodegenerative diseases, and cognitive disorders, using a Mendelian randomization framework[7]. Operational Efficiency - The company aims to achieve profitability by 2025 through operational optimization and increased production capacity of dorzagliatin[5]. - The production capacity of dorzagliatin is expected to exceed 3 million boxes in 2024, with new processes established to enhance production capacity[3]. - The company anticipates an increase in gross margin as the production scale of dorzagliatin expands[3]. Cash Flow and Liquidity - As of June 30, 2024, the bank balance and cash amounted to approximately RMB 1,338.8 million[4]. - Operating activities used RMB 226.8 million in cash for the six months ended June 30, 2024, compared to a cash inflow of RMB 258.77 million for the same period in 2023[19]. - Cash and cash equivalents as of June 30, 2024, amounted to RMB 1,338.8 million, reflecting the company's liquidity position[19]. - The company’s cash and cash equivalents decreased to RMB 1,338,809,000 from RMB 1,460,824,000, indicating a reduction in liquidity[55]. Expenses and Liabilities - Selling expenses rose from RMB 529 million for the six months ended June 30, 2023, to RMB 611 million for the same period in 2024, an increase of RMB 82 million, mainly due to higher labor and promotional costs[15]. - Administrative expenses increased from RMB 540 million for the six months ended June 30, 2023, to RMB 611 million for the same period in 2024, an increase of RMB 71 million, primarily due to higher employee compensation and travel expenses[13]. - Current liabilities increased to RMB 311,076,000 from RMB 252,034,000, reflecting a rise in financial obligations[55]. - The company’s non-current liabilities increased to RMB 1,376,880,000 from RMB 1,372,188,000, showing a slight rise in long-term financial commitments[56]. Shareholder Information - The company has adopted two share plans, including a pre-IPO share incentive plan and a post-IPO share option plan, in compliance with new listing rules[40]. - The total number of options exercised during the reporting period is 4,700,000[46]. - As of June 30, 2024, there are 43,323,276 shares available for future grants under the post-IPO stock option plan[49]. - The company recognized share-based payment expenses of RMB 7,356,000 for the six months ended June 30, 2024, compared to RMB 11,626,000 for the same period in 2023[90]. Corporate Governance - The company has adopted a corporate governance code to enhance shareholder value and transparency[108]. - The audit committee has reviewed the unaudited interim results for the six months ending June 30, 2024, ensuring compliance with applicable accounting principles[110]. - The company has confirmed that all directors complied with the applicable standards of the corporate governance code during the reporting period[107].

2024 年 09 月 02 日 公司点评 买入/维持 华领医药-B(02552) 目标价: 5.47 昨收盘:1.15 医疗保健 药品及生物科技 华堂宁 24H1 同比增长 46%，二代 GKA 美国临床 24Q4 读出 ◼ 走势比较 (40%) (22%) (4%) 14% 32% 50% 23/9/4 23/11/1524/1/2624/4/724/6/1824/8/29 华领医药-B 恒生指数 ◼ 股票数据 总股本(亿股) 10.56 总市值(亿港元) 12.14 12 个月内最高/最低价 (港元) 2.65/1.08 相关研究报告 <<华堂宁放量限制因素解除，二代 GKA 美国临床顺利推进>>--2024-04- 05 证券分析师：周豫 E-MAIL：zhouyua@tpyzq.com 分析师登记编号：S1190523060002 证券分析师：霍亮 E-MAIL：huoliang@tpyzq.com 分析师登记编号：S1190523070002 研究助理：戎晓婕 E-MAIL：rongxj@tpyzq.com 一般证券业务登记编号：S1190123070050 事件： 近日，公司发布 2024 年中 ...

Sales Performance - For the first half of 2024, sales of Huadongning® reached 846,000 boxes, a significant increase from 212,000 boxes in the same period of 2023, representing a growth of approximately 299%[2] - The sales revenue for the first half of 2024 was RMB 102.7 million, reflecting a growth of 46.0% compared to RMB 70.3 million in the first half of 2023[2] - 华堂宁®在2024年上半年的收入达到人民币102.7百万，预计在2024年下半年继续增长[4] - 截至2024年6月30日，华堂宁®已售出约846,000盒，销售额约人民币102.7百万，较2023年同期增加634,000盒或人民币32.3百万[8] - 华堂宁®自首次商业上市至2024年6月30日，累计销售约1,150,000盒，销售额约人民币196.9百万[8] - 2024年上半年，为华堂宁®开具处方的医院数量超过2,100家[4] - 华堂宁®已成功纳入国家医保药品目录，预计未来销量将大幅上升[9] Financial Performance - The company reported a pre-tax loss of approximately RMB 142.2 million for the first half of 2024, an increase of 57.9% compared to the same period in 2023[3] - The total other income for the first half of 2024 was approximately RMB 55.1 million, including milestone revenue from Bayer of about RMB 47.8 million[3] - The company reported revenue of RMB 102,663,000 for the six months ended June 30, 2024, compared to RMB 70,331,000 for the same period in 2023, representing an increase of approximately 46%[36] - The gross profit for the six months ended June 30, 2024, was RMB 47,762,000, up from RMB 44,047,000 in the same period of 2023[36] - The company incurred a loss before tax of RMB 142,241,000 for the six months ended June 30, 2024, compared to a loss of RMB 90,096,000 for the same period in 2023[36] - The company reported a loss attributable to shareholders of RMB 142,241,000 for the six months ended June 30, 2024, compared to a loss of RMB 90,096,000 for the same period in 2023, representing an increase in loss of approximately 58%[50] Research and Development - Research and development expenses for the first half of 2024 totaled approximately RMB 119.8 million, an increase of 68.7% from RMB 71.0 million in the first half of 2023[3] - Research and development expenses increased significantly to RMB 119,776,000 for the six months ended June 30, 2024, compared to RMB 70,998,000 for the same period in 2023[36] - Dorzagliatin与SGLT-2抑制剂联合使用的研究显示可改善血糖控制，为扩展适应症提供新机会[7] - 公司正在进行针对2型糖尿病患者的上市后真实世界证据研究，以优化医疗实践[5] - Dorzagliatin的III期临床试验显示良好的安全性，未出现高甘油三酯血症风险[4] - 公司计划于2028年推出Dorzagliatin-二甲双胍固定剂量组合新药[6] Cash Flow and Liquidity - As of June 30, 2024, the bank balance and cash amounted to approximately RMB 1,338.8 million[3] - The company reported a net cash outflow from operating activities of RMB 226.8 million for the six months ended June 30, 2024, compared to a net inflow of RMB 258.8 million for the same period in 2023[19] - Cash and cash equivalents as of June 30, 2024, amounted to RMB 1,338.8 million, with no significant investments or acquisitions reported during the period[18] - The net current asset value was RMB 1,205.1 million as of June 30, 2024, compared to RMB 1,320.4 million as of December 31, 2023, reflecting cash flow management efforts[30] - The company monitors cash and cash equivalents to manage liquidity risk, maintaining levels deemed appropriate for operations[30] Operational Expenses - Selling expenses increased from RMB 529 million for the six months ended June 30, 2023, to RMB 611 million for the same period in 2024, primarily due to increased labor costs and promotional expenses[15] - Administrative expenses rose from RMB 540 million for the six months ended June 30, 2023, to RMB 611 million for the same period in 2024, mainly due to increased labor costs and travel expenses[13] - Employee costs, including directors' remuneration, totaled RMB 86,006,000 for the first half of 2024, compared to RMB 85,808,000 in 2023, an increase of about 0.2%[46] Financing and Investments - The company secured new bank loans amounting to RMB 122,562,000 during the interim period, with interest rates linked to the Loan Prime Rate (LPR) ranging from 3.2% to 3.3%[57] - The company plans to continue investing in Shanghai Hualing Biotechnology Co., Ltd. to ensure sufficient commercial supply of dorzagliatin, with funding expected from internal resources and/or external borrowings[34] - The net proceeds from the global offering amount to RMB 747.2 million, with 36.4 million remaining unutilized as of June 30, 2024[60] Corporate Governance - The company has declared no interim dividend for the six months ending June 30, 2024[61] - The board confirms compliance with applicable corporate governance codes during the six-month period ending June 30, 2024[63] - The company has adopted the standard code for securities trading by directors since its listing date[62] Other Financial Metrics - The company has not recognized any income tax expenses for the six months ended June 30, 2024, and 2023[18] - The company had a net equity of RMB (33,171,000) as of June 30, 2024, compared to RMB 101,151,000 as of December 31, 2023[38] - The company has no significant contingent liabilities as of June 30, 2024, apart from those disclosed in the announcement[35] - The company’s subsidiary in China is subject to a preferential corporate income tax rate of 15% due to its certification as a high-tech enterprise[47] Management Changes - Robert Taylor Nelsen has resigned as a non-executive director effective July 12, 2024[64]

Financial Performance - The group will receive a transaction amount not exceeding RMB 40.0 million for the year ending December 31, 2023, with the actual transaction amount being RMB 10.7 million[3]. - The total amount of related party transactions disclosed did not exceed the annual cap set by the company for the year ending December 31, 2023[5]. - As of December 31, 2023, the company's bank balance and cash amounted to approximately RMB 1,460.8 million[96]. - Since the commercial launch at the end of October 2022 until December 31, 2023, the company achieved total revenue of RMB 94.2 million[98]. - Total revenue for the year ended December 31, 2023, was approximately RMB 76.6 million, reflecting sales of about 251,000 boxes of Huadongning®[144]. - Other income increased by 214.6% to approximately RMB 131 million, primarily due to milestone payments being amortized[123]. - The company reported a pre-tax loss increase of approximately RMB 7.7 million or about 4% to approximately RMB 211.2 million for the year ending December 31, 2023[124]. - Operating cash flow generated was RMB 889.4 million, adjusted for pre-tax loss and non-operating cash income[131]. - Total expenses for the year ended December 31, 2023, were approximately RMB 383.3 million, with RMB 171.5 million attributed to research and development expenses[145]. - Gross profit for the year was approximately RMB 37.4 million, with a gross margin of 48.8%, an increase of 5.1% from 43.7% in the previous year[163]. Research and Development - R&D expenses rose by approximately RMB 42.0 million or about 32% to approximately RMB 171.5 million for the year ending December 31, 2023[120]. - The increase in R&D spending reflects a commitment to enhancing product development and regulatory compliance[199]. - The company has submitted patent applications for new indications of dorzagliatin in preventing diabetes and memory impairment[126]. - The company is focusing on expanding glucose kinase therapy to prevent diabetes and delay complications[127]. - The company plans to continue research on dorzagliatin's efficacy in preventing memory decline and its relationship with neurodegenerative diseases[158]. - The company is developing fixed-dose combination products of dorzagliatin with existing oral antidiabetic medications, aiming to address unmet medical needs[191]. - The company is optimizing core technologies for allosteric modulation of physiologically important protein targets to develop first-in-disease therapies[191]. - The company is conducting clinical research on dorzagliatin for diabetes prevention, with the SENSITIZE II study initiated at CUHK[143]. - The company has achieved significant milestones in the development of dorzagliatin, including its combination with DPP-4 and SGLT-2 inhibitors to improve blood glucose control in diabetic and obese patients[101]. - The company has published results from the SEED-DREAM study in a prominent medical journal, showing significant improvements in β-cell function and insulin secretion in type 2 diabetes patients[172]. Product Development and Market Strategy - The company is focused on new product development and technological advancements to enhance market competitiveness[3]. - The company has entered into a commercial cooperation agreement with Bayer, receiving an advance payment of RMB 300 million in 2020 and an additional RMB 400 million upon NDA approval in January 2023[69]. - The company is developing a second-generation glucose kinase activator for diabetes as a once-daily oral therapy in the U.S., with the IND application completed and accepted by the FDA by the end of 2023[101]. - The company has expanded the production capacity of dorzagliatin in collaboration with manufacturing partners to meet the anticipated demand from Bayer's sales push in China in 2024[102]. - Huadongning® has been included in the National Medical Insurance Drug List, with expected significant sales growth in the coming years[128]. - The company expects an increase in sales of Huatangning® following its inclusion in the National Medical Insurance Drug List, with a reimbursement standard of RMB 10.78 per day[177]. - Approximately 20,000 type 2 diabetes patients have used Huadongning® for over 14 months, demonstrating the safety and efficacy of dorzagliatin in restoring glycemic homeostasis[116]. - Revenue from core product Huadongning® shows effective restoration of blood glucose regulation in selected type 2 diabetes patients[192]. - The company has achieved several milestones related to Huatangning® development, which are expected to accelerate its commercialization process[177]. Share Options and Incentive Plans - The maximum number of shares that can be granted under the pre-IPO share incentive plan is capped at 117,000,000 shares, with 0 shares issued as of the last practicable date[8]. - The total number of unexercised options as of the reporting period is 81,776,923 shares, with 10,411,320 shares exercised and 4,653,960 shares lapsed[13]. - The weighted average closing price for shares exercised under the incentive plan is HKD 3.00[13]. - The share options granted have various exercise prices, with the lowest being HKD 0.546 and the highest being HKD 3.822[13]. - The group has established an employee trust to manage the pre-IPO share incentive plan[8]. - The group has not issued any share options post-IPO[14]. - The stock options granted will vest over a period of 36 months after the first anniversary of the vesting start date[29][30][32][33][59][60][62]. - The maximum number of shares available for grant under the post-IPO share option scheme is subject to board determination[23]. Financial Risks and Currency Exposure - The company operates primarily in China, with most transactions settled in RMB, facing currency exchange risks without any forex hedging activities[195]. - The company has not engaged in any foreign exchange hedging activities, exposing it to currency-related gains or losses[195]. - The company’s financing strategy includes converting part of its USD funds into RMB for operational needs[195]. - Financing costs rose to RMB 7.9 million in 2023 from RMB 3.7 million in 2022, attributed to increased bank loans[197]. - Government grants and bank interest income contributed to the increase in other income, with government grants rising by RMB 22.5 million[194].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% relative to the CSI 300 index in the next six months [1][24]. Core Insights - The company has seen a significant increase in sales and revenue projections, with expected revenues of 4.36 billion RMB in 2024, 14.02 billion RMB in 2025, and 22.77 billion RMB in 2026, reflecting growth rates of 469%, 221%, and 62% respectively [5][24]. - The company reported a cash balance of 14.6 billion RMB at the end of 2023, an increase of 9.7 billion RMB year-on-year, indicating strong liquidity [3][12]. - The gross margin for the company's main product, Huadongning, was 48.8% in 2023, with expectations for further improvement in 2024 [12][24]. - The company is progressing well with its second-generation GKA clinical trials in the U.S., which are expected to enhance patient compliance and extend patent protection [12][24]. Financial Summary - The company reported a total revenue of 0.77 billion RMB in 2023, with a pre-tax loss of 2.1 billion RMB, which is a 4% increase year-on-year [3][5]. - The projected net profit for 2024 is expected to improve to a loss of 1.22 billion RMB, followed by a profit of 0.61 billion RMB in 2025 and 2.80 billion RMB in 2026 [5][24]. - The diluted earnings per share (EPS) are projected to improve from -0.22 RMB in 2024 to 0.27 RMB in 2026 [5][24].

Revenue and Income - Total revenue from drug sales reached RMB 76,610,000 in 2023, a significant increase from RMB 17,599,000 in 2022, representing a growth of approximately 335%[12] - Other income totaled RMB 130,602,000 in 2023, compared to RMB 41,511,000 in 2022, marking an increase of about 215%[15] - The company reported a revenue of RMB 76,610,000 for the year ended December 31, 2023, compared to RMB 17,599,000 in 2022, representing a significant increase[39] - The gross profit for 2023 was RMB 37,374,000, up from RMB 7,689,000 in 2022, indicating a strong improvement in profitability[39] - Other income increased by 214.6% to RMB 131 million, primarily due to milestone payments recognized[111] Losses and Expenses - The company reported a pre-tax loss of RMB 178,954,000 for the year ended December 31, 2023, up from RMB 166,706,000 in 2022, indicating an increase in losses of approximately 5%[21] - The company incurred a pre-tax loss of RMB 211,234,000 for 2023, slightly higher than the loss of RMB 203,507,000 in 2022[39] - For the year ended December 31, 2023, the company reported a loss attributable to shareholders of RMB 211.2 million, compared to a loss of RMB 203.5 million for the year ended December 31, 2022[41] - The company incurred depreciation and amortization expenses totaling RMB 36,238,000 in 2023, compared to RMB 31,777,000 in 2022, reflecting an increase of about 14%[21] - Financing costs rose to RMB 7,907,000 in 2023 from RMB 3,667,000 in 2022, an increase of approximately 116%[18] Assets and Liabilities - The total assets as of December 31, 2023, were RMB 1,473,339,000, compared to RMB 933,111,000 in 2022, reflecting a growth of about 58%[3] - Non-current assets decreased from RMB 181,240,000 in 2022 to RMB 152,896,000 in 2023, a decline of approximately 16%[3] - The company’s equity attributable to owners decreased from RMB 279,580,000 in 2022 to RMB 101,151,000 in 2023, a decline of approximately 64%[5] - Total liabilities, including lease liabilities and borrowings, increased to RMB 167.8 million as of December 31, 2023, from RMB 97.6 million as of December 31, 2022[54] - The total borrowings as of December 31, 2023, were RMB 124,036,000, compared to RMB 33,923,000 in 2022, indicating a substantial increase of approximately 265.5%[65] Cash and Liquidity - The company’s cash and cash equivalents increased significantly to RMB 1,460,824,000 in 2023 from RMB 490,632,000 in 2022, representing a growth of about 197%[3] - The company has a net cash position of RMB 1,320.4 million as of December 31, 2023, compared to RMB 751.9 million in 2022, reflecting improved liquidity[32] - As of December 31, 2023, cash and cash equivalents amounted to RMB 1,460.8 million, an increase from RMB 751.9 million as of December 31, 2022[49] - The current liquidity ratio stands at 6.2, an increase from 5.0 in the previous year[96] Research and Development - The company recorded a significant increase in research and development expenses, totaling RMB 171,537,000 in 2023, compared to RMB 129,528,000 in 2022, reflecting ongoing investment in innovation[39] - Research and development costs for the year ended December 31, 2023, were RMB 166.8 million, up from RMB 110.4 million in 2022, indicating a significant investment in innovation[50] - The company is conducting clinical research on dorzagliatin for the prevention of diabetes, with a study initiated at CUHK[112] - The company is advancing research on new indications for dorzagliatin and has submitted patent applications for its use in preventing diabetes and memory deficits[123] Employee and Operational Metrics - Employee costs for the year ended December 31, 2023, were approximately RMB 163.3 million, compared to RMB 155.2 million in 2022, representing an increase of about 5.4%[74] - The company employed a total of 177 employees as of December 31, 2023, an increase from 144 employees in 2022, indicating a growth of approximately 22.9%[74] - The company has maintained a strong credit policy to minimize credit risk associated with accounts receivable, with clients possessing strong financial capabilities[44] Future Plans and Investments - The company plans to invest in Shanghai Lingang Special Area to ensure sufficient commercial supply of dorzagliatin, with future funding expected from internal resources and/or appropriate external borrowings[36] - The company plans to invest approximately RMB 400 million in 2023 and 2024 for the production and capacity expansion of dorzagliatin[111] - The company aims to develop personalized diabetes care technologies to enhance patient management[130] Corporate Governance and Compliance - The company has complied with all applicable corporate governance codes throughout the year[80] - The company did not declare or pay any dividends for the years ended December 31, 2023, and 2022[72]

Financial Performance - The company achieved revenue of RMB 70.3 million in the first half of 2023, representing an increase of approximately 299.6% compared to the sales in the second half of 2022[37]. - Total sales of Huadongning® reached RMB 87.9 million from its launch in late October 2022 to June 30, 2023, driven by new regulations allowing patients to purchase chronic care medications online[37]. - The company reported total revenue of approximately RMB 70.3 million for the six months ended June 30, 2023, reflecting sales of about 212,000 boxes of Huadongning®[75]. - Gross profit for the same period was approximately RMB 44.0 million, with a gross margin of 62.6%, an increase of 18.9% from 43.7% for the year ended December 31, 2022[65]. - The company reported a loss before tax of RMB 90,096,000, an improvement from a loss of RMB 104,619,000 in the previous year[146]. Cash and Liquidity - As of June 30, 2023, the company's cash balance was RMB 881.3 million, an increase of approximately 79.6% from RMB 490.6 million as of December 31, 2022[31]. - Operating cash flow generated RMB 258.8 million for the six months ending June 30, 2023, compared to a cash outflow of RMB 116.7 million in the same period of 2022[100]. - The cash inflow from financing activities for the six months ended June 30, 2023, was RMB 122.7 million, primarily from short-term and long-term bank loans[125]. - The company’s net asset value decreased to RMB 208,426,000 from RMB 279,580,000 year-over-year[147]. - As of June 30, 2023, the company reported a current ratio of 3.8, down from 5.0 as of December 31, 2022[132]. Expenses and Costs - Total expenses for the six months ended June 30, 2023, amounted to approximately RMB 181.5 million, with around RMB 71.0 million allocated to research and development expenses[35]. - The total comprehensive expenses for the six months ended June 30, 2023, decreased by approximately RMB 14.0 million or about 13.4% to approximately RMB 90.5 million compared to the same period in 2022[36]. - Administrative expenses decreased from RMB 68.5 million to RMB 54.0 million, primarily due to a reduction in employee costs and consulting fees[67]. - The company recorded sales expenses of RMB 52.9 million for the six months ended June 30, 2023, which included employee compensation of RMB 15.0 million and promotional expenses of RMB 29.0 million[117]. - The cash operating costs totaled RMB 220.4 million for the six months ended June 30, 2023, compared to RMB 142.3 million for the same period in 2022[122]. Research and Development - The company is conducting clinical research on dorzagliatin for diabetes prevention, with the SENSITIZE II study initiated at the Chinese University of Hong Kong[33]. - The company is advancing the development of fixed-dose combination candidates of dorzagliatin with metformin, sitagliptin, and empagliflozin as part of its lifecycle management strategy[55]. - Dorzagliatin has shown potential for new indications related to endogenous GLP-1, encouraging further research into its combination with GLP-1 receptor agonists for postprandial blood sugar control[47]. - The company is preparing to conduct real-world studies to address unmet medical needs related to dorzagliatin[53]. - The company is developing a clinical research plan to reverse IGT to NGT in China, targeting the 500 million global IGT patients, which is a major cause of type 2 diabetes[81]. Milestones and Partnerships - The company received a non-repayable milestone payment of RMB 400 million from Bayer after the successful launch of Huadongning® for two indications of type 2 diabetes (T2D) in China, with total cash received from Bayer and government funding amounting to RMB 402.6 million in the first half of 2023[31]. - The company completed a milestone event with Bayer, resulting in a milestone payment of RMB 800 million[61]. - The company is actively seeking business partners to advance its R&D plans and commercialization efforts globally[60]. - The company plans to submit an IND application in the U.S. by the end of 2023 or early 2024 for the development of a second-generation GKA targeting diabetic kidney disease[55]. - The company is preparing to submit an IND application for its second-generation glucose kinase activator in the U.S. by the end of 2023 or early 2024[73]. Employee and Compensation - The company had 170 employees as of June 30, 2023, an increase from 144 employees as of December 31, 2022[136]. - Employee costs for the six months ended June 30, 2023, were approximately RMB 81.9 million, compared to RMB 80.4 million for the same period in 2022[162]. - The company plans to continue providing competitive compensation and may grant stock options and bonuses based on employee performance[137]. - As of June 30, 2023, there were 42,533,262 shares available for future grants under the post-IPO share option plan[141]. - The company has two share incentive plans in place, which were adopted prior to the effective date of the new listing rules[164]. Market and Risk Factors - The company faces various market risks, including currency, interest rate, credit, and liquidity risks, and currently does not hedge any of these risks[105]. - The company has not implemented any interest rate hedging policies to mitigate interest rate risks but is monitoring these risks and will consider hedging if necessary[12]. - The company has conducted sensitivity analysis to assess the risks associated with currency fluctuations[129]. - The impact on profit and loss from USD was a loss of RMB 9,342,000 for the first half of 2023, an improvement from a loss of RMB 9,893,000 in the same period of 2022[130]. - The impact from HKD was a loss of RMB 2,499,000 as of June 30, 2023, compared to a loss of RMB 2,250,000 at the end of 2022[130].

Sales and Revenue - Total sales of Dorzagliatin (branded as Huatangning®) reached RMB 879 million since its launch in October 2022 until June 30, 2023, with revenue of RMB 703 million in the first half of 2023, representing a growth of approximately 299.6% compared to the second half of 2022[2]. - The company generated total revenue of approximately RMB 70.3 million in the first half of 2023, reflecting sales of about 212,000 boxes of Huatangning®[6]. - Revenue for the six months ended June 30, 2023, was RMB 70,331,000, compared to no revenue in the same period of 2022[104]. Financial Performance - Hua Medicine recorded a gross profit of approximately RMB 44.0 million for the six months ended June 30, 2023, with a gross margin of 62.6%, an increase of 18.9% from 43.7% for the year ended December 31, 2022, due to increased sales and reduced unit production costs[20]. - The net loss for the six months ended June 30, 2023, was RMB 90,096,000, compared to a net loss of RMB 104,619,000 in the same period of 2022, representing a 13.8% improvement[104]. - The company reported a basic and diluted loss per share of RMB 0.09 for the first half of 2023, compared to RMB 0.11 in the same period of 2022[96]. Cash and Liquidity - As of June 30, 2023, the company's cash balance was RMB 881.3 million, an increase of approximately 79.6% from RMB 490.6 million as of December 31, 2022[2]. - Cash generated from operating activities for the six months ended June 30, 2023, was RMB 258.8 million, compared to a cash outflow of RMB 116.7 million for the same period in 2022[73]. - Cash and cash equivalents increased significantly to RMB 881,289,000 from RMB 490,632,000 year-over-year, indicating improved liquidity[97]. Research and Development - Total expenses for the first half of 2023 were approximately RMB 181.5 million, with research and development expenses accounting for about RMB 71.0 million, a decrease of approximately 1.8% from RMB 72.3 million in the same period of 2022[6]. - The company is actively developing a new fixed-dose combination of dorzagliatin with metformin, sitagliptin, and empagliflozin, which is expected to provide greater benefits to more patients in China[24]. - The company is exploring the potential of dorzagliatin in new indications related to endogenous GLP-1, which may provide more effective methods for diabetes remission in obese patients[29]. Milestone Payments and Collaborations - The company received a non-repayable milestone payment of RMB 400 million from Bayer after the approval of Huatangning® for two Type 2 diabetes indications, with total cash and government funding received amounting to RMB 402.6 million in the first half of 2023[2]. - The company anticipates receiving specific milestone payments related to the development of Hua Tang Ning® in the second half of 2023 from Bayer[28]. - The company is entitled to receive a milestone payment of RMB 800 million from Bayer related to the development of Huadongning®[62]. Production and Capacity Expansion - The company is expanding production capacity for Dorzagliatin in collaboration with partners, with a total investment of approximately RMB 400 million planned for commercial drug production and capacity expansion from 2023 to 2024[8]. - The company plans to continue investing in Shanghai Lingang Special Area to ensure sufficient commercial supply of dorzagliatin, with expected funding from internal resources and/or external borrowings[92]. Employee and Administrative Costs - Employee costs, including salaries and other benefits, amounted to RMB 70,298,000 in the first half of 2023, up from RMB 63,561,000 in 2022, reflecting a growth of 11.3%[113]. - Administrative expenses decreased from RMB 68.5 million to RMB 54.0 million, mainly due to a reduction in labor costs by RMB 11.2 million and consulting fees by RMB 5.3 million[42]. Clinical Research and Studies - The SEED-DREAM study published in June 2023 reported a 65% probability of diabetes remission in non-obese diabetic patients after 52 weeks of Dorzagliatin treatment, with significant improvements in TIR (Time in Range)[10]. - Clinical trials indicate that dorzagliatin can effectively restore glycemic homeostasis in specific T2D patient populations by improving β-cell function and reducing insulin resistance[19]. Corporate Governance and Compliance - The group’s unaudited consolidated financial performance for the six months ended June 30, 2023, has been reviewed by Deloitte, confirming compliance with applicable accounting principles and sufficient disclosure[157]. - The company is committed to adhering to the corporate governance code as outlined in the listing rules appendix[160].

中國建設銀行股份有限公司上海張江分行 中國上海科苑路232號 | --- | |----------------------------------| | | | 招商銀行股份有限公司臨港藍灣支行 | | 上海臨港區雲櫻路 271 號 | | 本公司網站 | | www.huamedicine.com | | 股份代號 | | 2552 | 華領醫藥 年度報告 2022 4 業務及財務摘要 業務摘要 • 於2022年10月，我們收到中國國家藥品監督管理局(NMPA)就華堂寧®（又名dorzagliatin）的商業批准發出的正式 通知。華堂寧®是全球範圍內首個獲批上市的葡萄糖激酶激活劑(GKA)藥物。 • 華堂寧®獲批兩個適應症，用於改善2型糖尿病(T2D)患者的血糖控制，即單獨用藥治療T2D患者，或者在單獨使 用二甲雙胍血糖控制不佳時，與二甲雙胍聯合使用，以控制成人T2D患者的血糖水平。 • 此外，華堂寧®的批准包含三項許可。對於慢性腎病(CKD)及2型糖尿病（即糖尿病腎病）患者，無需調整劑 量。華堂寧®聯合恩格列淨（SGLT-2抑制劑）或西格列汀（DPP-4抑制劑），聯合用藥的效果優於單獨用藥， 有望更好地 ...

Product Approval and Commercialization - The company received formal commercial approval from the NMPA for Huadongning® (dorzagliatin) in October 2022, marking it as the world's first glucose kinase activator (GKA) drug approved for market[3]. - Huadongning® is approved for two indications to improve blood glucose control in Type 2 Diabetes (T2D) patients, either as monotherapy or in combination with metformin[3]. - The approval includes three permissions, allowing for use in chronic kidney disease (CKD) and T2D patients without dose adjustment, and shows improved efficacy when combined with SGLT-2 or DPP-4 inhibitors[4]. - The company received a milestone payment of RMB 400 million from Bayer Pharmaceuticals upon the commercial approval of Huadongning®[5]. - Initial commercialization of Huadongning® in China has been successful, with voluntary sales restrictions implemented to ensure adequate supply for patients[11]. - Approximately 148,000 boxes of Huadongning® (28 tablets per box) were sold from late October 2022 to the end of January 2023, resulting in net sales revenue of approximately RMB 49 million[21]. - The company plans to seek inclusion of Huadongning® in the national medical insurance catalog while continuing to develop a fixed-dose combination of dorzagliatin[26]. Financial Performance - As of December 31, 2022, the company reported total revenue of approximately RMB 17.6 million, reflecting sales since the launch of Huadongning® in Q4 2022[7]. - Total revenue for the year ended December 31, 2022, was RMB 17.6 million, with a gross profit of RMB 7.7 million, resulting in a gross margin of 43.7%[56]. - The company recorded a pre-tax loss of RMB 203.5 million for the year ended December 31, 2022, compared to a pre-tax loss of RMB 325.7 million for the previous year[48]. - Cash used in operating activities for the year ended December 31, 2022, was RMB 230.1 million, primarily due to the pre-tax loss and an increase in working capital[65]. - The company reported a basic and diluted loss attributable to owners of the company of RMB (203,507,000) for the year ended December 31, 2022, compared to RMB (325,734,000) in 2021[140]. - The company’s total equity attributable to owners was RMB 279.6 million as of December 31, 2022, down from RMB 450.3 million in 2021, reflecting a decrease of approximately 37.9%[103]. Research and Development - The company completed multiple clinical trials, including eight Phase I trials in China and four in the U.S., demonstrating a diabetes remission rate of 65.2% in a 52-week clinical study[17]. - The DREAM study showed a diabetes remission rate of 65.2% among T2D patients after 52 weeks without any hypoglycemic medication, indicating the potential effectiveness of dorzagliatin[19]. - The company is advancing the development of its second-generation glucose kinase activator (GKA) with potential for once-daily dosing and more efficient manufacturing processes[23]. - The company continues to develop glucose kinase compounds for congenital hyperinsulinism following the acquisition of Shengderuil[26]. - The company has allocated 39% of the net proceeds from the global offering, amounting to RMB 291.4 million, for the research and development of Dorzagliatin[194]. Expenses and Cost Management - Total expenses for the year ended December 31, 2022, were approximately RMB 278.7 million, with R&D expenses comprising about RMB 129.5 million, a decrease of approximately RMB 57.3 million or 31%[7]. - Research and development expenses decreased from RMB 186.8 million for the year ended December 31, 2021, to RMB 129.5 million for the year ended December 31, 2022, a reduction of RMB 57.3 million[43]. - Administrative expenses decreased from RMB 134.8 million for the year ended December 31, 2021, to RMB 129.9 million for the year ended December 31, 2022, mainly due to reduced employee compensation and marketing costs[76]. - Employee costs for the year ended December 31, 2022, were approximately RMB 155.2 million, down from RMB 163.3 million in 2021, indicating a reduction of 4.9%[191]. Cash Flow and Liquidity - The company’s cash and cash equivalents amounted to RMB 490.6 million as of December 31, 2022, with operating activities consuming RMB 230.1 million during the year[83]. - The company reported a net cash outflow from operating activities of RMB 230.1 million for the year ended December 31, 2022, an improvement from RMB 273.0 million in the previous year[114]. - The net cash generated from financing activities for the year ended December 31, 2022, was RMB 21.5 million, compared to a net cash used of RMB 6.1 million for the year ended December 31, 2021[67]. - The company’s cash and cash equivalents decreased to RMB 490.6 million as of December 31, 2022, from RMB 675.2 million in the previous year, a decline of about 27.4%[102]. Corporate Governance - The company has appointed Mr. Cheung Yiu Leung as an independent non-executive director and audit committee chairman since January 1, 2023, ensuring compliance with listing rules[198]. - The audit committee must consist of at least three members, including one independent non-executive director with appropriate professional qualifications or relevant financial management expertise[197]. - The company has met the requirements of listing rules 3.10(2) and 3.21 following the recent appointment of the audit committee chairman[198].