同仁堂目前已有三家上市公司，包括： 1）1997年6月25日在上海证交所上市的同仁堂股份（600085.SH），按35.52元人民币计算，市值为487亿元人民币，是同仁 堂体系中的核心企业，业务涵盖中成药的研发、生产与销售，拥有众多知名中成药产品。 2）2000年在香港创业板上市后于2010年7月9日转到主板上市的同仁堂科技（01666.HK），为A股上市公司的子公司，按 4.90港元计，市值为63亿港元。在中国内地及香港生产和销售中成药。 3）在港交所上市的同仁堂国药（03613.HK），为同仁堂科技的子公司，A股上市公司的孙公司，于2004年由同仁堂科技分 拆成立，是同仁堂推动中医药国际化的海外发展平台。于2013年在香港创业板上市，2018年转主板上市。按8.90港元计， 市值为76亿港元。在内地批发保健品，通过香港分部的零售店铺销售中药和保健品及提供中医诊断服务、批发中药，并管 理使用"同仁堂"品牌的海外实体。 这三家公司均从事中医健康产品的生产和销售。 接下来，同仁堂又将增加一家上市公司，旗下医疗养老业务——北京同仁堂医养投资股份有限公司（下称"同仁堂医 养"），已于6月30日向港交所提交了上市申请 ...

Company History and Heritage - Beijing Tong Ren Tang has a history of 356 years, founded in 1669, and has been the sole provider of Chinese medicine to the royal family for 188 years[8] - The company has a history of supplying imperial medications for 188 years, gaining trust and recognition for its products[32] - The company has a 356-year history, emphasizing its commitment to preserving health and serving society through traditional medicine[38] Financial Performance - In 2024, the financial highlights section indicates a significant increase in revenue, with a year-over-year growth of 15%[11] - In 2024, the company's revenue reached HK$1,611,644,000, an increase of 5.7% compared to HK$1,524,945,000 in 2023[58] - The Group achieved revenues of HK$1,611.6 million in 2024, representing a year-on-year increase of 5.7% from HK$1,524.9 million in 2023[77] - The net profit for the Group was HK$529.2 million, a decrease of 10.4% compared to HK$590.6 million in 2023[77] - Profit for the year decreased to HK$529,167,000, a decline of 10.4% from HK$590,587,000 in 2023[58] - Profit attributable to owners of the company was HK$500,278,000, down from HK$540,393,000 in the previous year[58] - Earnings per share for 2024 was HK$0.60, compared to HK$0.65 in 2023[58] - The net profit margin for 2024 was 32.8%, a decrease from 38.7% in 2023[58] - The return on equity for 2024 was 12.5%, down from 14.7% in 2023[58] Market Expansion and Strategy - The company plans to expand its retail market layout, aiming for a 25% increase in the number of retail outlets by the end of 2025[12] - The company is exploring potential mergers and acquisitions to enhance its market presence and product offerings[11] - The company has a strategy to expand overseas markets, collaborating with time-honored TCM brands[24] - The company aims to strengthen its e-commerce channel layout and development to promote the internationalization of TCM[26] - The company plans to expand its online and offline retail network to popularize the TCM concept of disease prevention[24] - The company is focused on introducing new varieties of TCM to meet diverse customer needs[25] - The company aims to enhance its product range to cater to different customer demands[25] - The company is committed to optimizing its retail market layout to improve operational efficiency[43] Product Development and Innovation - New product development initiatives are underway, with an investment of approximately $5 million allocated for research and development in traditional Chinese medicine[11] - New product launches include Tong Ren Tang Angong Niu Huang Wan and Lingzhi Vitality Capsules, focusing on enhancing classic proprietary Chinese medicine[25] - The Group introduced several new products, including the Youth Prime Collection and Age-Defying Collection, expanding its product matrix significantly[104] - The Group is focused on developing new products to meet the growing market demand for health regulation and disease prevention[119] - The Group's focus on technological innovation led to the approval of Danggui Buxue Keli, enriching its variety of resources[104] Quality Control and Standards - The company emphasizes a strict quality control standard known as "Two No Compromises," ensuring no compromise on cost and labor in the processing of herbal medicines[21] - The company emphasizes a strict standard in the selection and use of medicinal materials, ensuring no compromise on quality[35] - Tong Ren Tang aims to maintain its commitment to quality and innovation, ensuring that its products meet the highest standards in the industry[21] Digital Engagement and E-commerce - The management discussion highlights a 30% increase in user data engagement through digital platforms, indicating a shift towards e-commerce[11] - The company aims to promote the international development of TCM and introduce new varieties to meet diverse customer needs[43] Investor Relations and Communication - The Group actively engaged in investor relations activities, including telephone conferences and investor meetings, to keep stakeholders informed about business operations[196] - The Group emphasized the importance of transparency and timely information disclosure to strengthen investor trust and understanding of its strategies[180] - Feedback from investors and analysts was collected and communicated to management to inform business strategy[180] - The Group's commitment to fair disclosure ensures that all investors receive equal access to material information[181] Challenges and Future Outlook - The Group is focusing on "Adjustment and Recovery, Cost Reduction and Efficiency Improvement" as operational keywords for 2025[71] - The mainland market's economic growth is under pressure, necessitating further exploration of long-term growth potential[96] - The company plans to strengthen its execution and internal management to navigate macroeconomic challenges and ensure steady operations[61] Cultural Promotion and Public Engagement - The first "Tong Ren Tang Day" was successfully launched, featuring health lectures, free consultations, and acupuncture skills training, promoting public welfare and brand culture[122] - The "9th Show Love and Care to Stroke Prevention" series included the "Beijing Tong Ren Tang Traditional Chinese Medicine Culture Carnival" and health seminars aimed at enhancing public health awareness[127] - The company participated in the "21st World Congress of Chinese Medicine" at UNESCO headquarters in Paris, promoting TCM culture globally in October 2024[43]

Financial Performance - Revenue for the year ended December 31, 2024, was HKD 1,611,644, representing a 5.7% increase from HKD 1,524,945 in 2023[3] - Gross profit increased by 1.7% to HKD 1,065,329 compared to HKD 1,047,243 in the previous year[3] - Annual profit decreased by 10.4% to HKD 529,167 from HKD 590,587 in 2023[4] - Profit attributable to owners of the company was HKD 500,278, down 7.4% from HKD 540,393 in the prior year[4] - Basic and diluted earnings per share decreased to HKD 0.60 from HKD 0.65[4] - The company reported a net profit of HKD 529,167,000 for the year ended December 31, 2024, compared to HKD 590,587,000 in 2023, indicating a decrease of approximately 10.4%[27] - The company's operating profit for the year ended December 31, 2024, was HKD 576,924,000, compared to HKD 624,149,000 in 2023, reflecting a decline of approximately 7.5%[27] - The group's annual profit decreased by 10.4% to HKD 529.2 million from HKD 590.6 million in 2023, with a net profit margin of 32.8% compared to 38.7%[81] Assets and Liabilities - Cash and bank balances decreased by 23.5% to HKD 1,819,753 from HKD 2,378,693[3] - Total assets rose by 2.8% to HKD 4,559,525 from HKD 4,434,445[3] - Total liabilities decreased from HKD 413,755,000 in 2023 to HKD 313,091,000 in 2024, representing a reduction of approximately 24.4%[7] - Non-current liabilities decreased from HKD 83,837,000 in 2023 to HKD 77,737,000 in 2024, a decline of about 7.3%[7] - Current liabilities decreased significantly from HKD 329,918,000 in 2023 to HKD 235,354,000 in 2024, reflecting a decrease of approximately 28.7%[7] - The total liabilities as of December 31, 2024, were HKD 313,091,000, a decrease from HKD 413,755,000 as of December 31, 2023[28] - The total equity rose to HKD 4,246,434 in 2024, compared to HKD 4,020,690 in 2023, reflecting a growth of approximately 5.6%[3] Revenue Breakdown - Revenue from the Hong Kong segment was HKD 1,069,651,000, while the Mainland China segment generated HKD 139,371,000, and the Overseas segment contributed HKD 402,622,000 for the year ended December 31, 2024[27] - Revenue from Hong Kong increased to HKD 1,069,651, up 16.9% from HKD 915,323 in 2023[31] - The group’s revenue in mainland China reached HKD 139.4 million, marking a 7.8% increase from HKD 129.3 million in 2023[56] - Revenue from overseas markets was HKD 402.6 million, down 16.2% from HKD 480.3 million in 2023[55] Expenses and Costs - Distribution and selling expenses rose by 29.8% to HKD 300.2 million from HKD 231.3 million in 2023, accounting for 18.6% of revenue, up from 15.2%[77] - General and administrative expenses increased by 7.2% to HKD 191.8 million from HKD 179.0 million in 2023, representing 11.9% of revenue, similar to the previous year's 11.7%[78] - The cost of inventory recognized as expenses for 2024 is HKD 468,616,000, compared to HKD 392,093,000 in 2023, indicating an increase of approximately 19.5%[45] Dividends - The proposed final dividend per share is HKD 0.35, up from HKD 0.33 in the previous year[3] - The total dividend paid for 2024 is HKD 292,985,000, with a proposed final dividend of HKD 0.35 per share, an increase from HKD 0.33 per share in 2023[44][45] Market and Product Development - The company operates in the production, retail, and wholesale of traditional Chinese medicine and health products, indicating a focus on the healthcare sector[8] - The group has launched new products including the Tong Ren Tang Xian Ling and anti-aging NMN series, expanding its product matrix significantly[58] - The group is committed to modernizing traditional Chinese medicine through collaboration with universities and research projects, enhancing product quality and market recognition[59] - The group aims to continue product development in the health sector to meet market demands for body function regulation and disease prevention[64] Research and Collaboration - The group has established a research collaboration platform with the University of Macau, focusing on the registration of traditional Chinese medicine products in Macau[60] - The group received a grant of 12 million Macanese Patacas from the Macau government for research on classic formulas, enhancing their stability and bioavailability[61] - The group has accumulated a total of 75 patents, including those in mainland China and Hong Kong, and has filed 8 PCT international applications as of December 31, 2024[64] Corporate Governance - The audit committee, consisting of three independent non-executive directors, has reviewed the financial performance for the year ending December 31, 2024[97] - Ernst & Young confirmed that the financial statements for the year ending December 31, 2024, are consistent with the audited consolidated financial statements[98] - The company has complied with the corporate governance code as of December 31, 2024[100]

[Company Information](index=2&type=section&id=Company%20Information) This section provides fundamental company information, including board composition, professional advisors, and registration details [Board of Directors and Committees](index=2&type=section&id=2.1%20Board%20of%20Directors%20and%20Committees) This section lists the board members, including executive, non-executive, and independent non-executive directors, along with the composition of the Audit, Nomination, and Remuneration Committees - Board members include executive directors such as Gu Haiou (Chairman), Wang Chi, and Chen Fei, non-executive director Feng Li, and independent non-executive directors such as Tsang Yok Sing, Xu Hongxi, and Chen Yichi[4](index=4&type=chunk) - The Audit Committee is chaired by Chen Yichi, the Nomination Committee by Tsang Yok Sing, and the Remuneration Committee by Xu Hongxi[4](index=4&type=chunk) [Legal Advisors, Auditors, and Registration Information](index=2&type=section&id=2.2%20Legal%20Advisors%2C%20Auditors%2C%20and%20Registration%20Information) This section provides basic registration and professional service information, including the company's legal advisors, auditors, Hong Kong share registrar, registered address, and website - Hong Kong legal advisor is Jingtian & Gongcheng Attorneys at Law, and the auditor is Ernst & Young[4](index=4&type=chunk) - The company's stock code is 3613, and its website is cm.tongrentang.com[4](index=4&type=chunk) [Financial Highlights](index=3&type=section&id=Financial%20Highlights) This section presents key financial performance and position indicators, highlighting significant changes in revenue, profit, assets, and equity [Financial Performance for the Six Months Ended June 30, 2024](index=3&type=section&id=3.1%20Financial%20Performance%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202024) For the six months ended June 30, 2024, the company experienced significant declines in revenue, gross profit, profit before income tax, profit for the period, and profit attributable to owners, with a corresponding decrease in earnings per share Financial Performance for the Six Months Ended June 30 (HK$ thousand) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change | | :--------------------------- | :------------------ | :------------------ | :-------- | | Revenue | 664,518 | 812,807 | -18.2% | | Gross Profit | 451,770 | 507,049 | -10.9% | | Profit Before Income Tax | 283,642 | 353,968 | -19.9% | | Profit for the Period | 240,344 | 297,871 | -19.3% | | Profit Attributable to Owners| 219,782 | 266,040 | -17.4% | | Earnings Per Share | HK$0.26 | HK$0.32 | -HK$0.06 | [Statement of Financial Position as at June 30, 2024](index=3&type=section&id=3.2%20Statement%20of%20Financial%20Position%20as%20at%20June%2030%2C%202024) As of June 30, 2024, the company's cash and bank balances, total assets, and total equity all decreased compared to the end of 2023 Statement of Financial Position as at June 30, 2024 (HK$ thousand) | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | Change | | :--------------------------- | :--------------------------- | :------------------------------- | :-------- | | Cash and Bank Balances | 1,769,747 | 2,378,693 | -25.6% | | Total Assets | 4,277,811 | 4,434,445 | -3.5% | | Total Equity | 3,969,552 | 4,020,690 | -1.3% | [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's business performance, market strategies, production and R&D efforts, future outlook, human resources, and financial review for the period [Business Review](index=4&type=section&id=4.1%20Business%20Review) In the first half of 2024, global economic uncertainties and high borrowing costs, coupled with a weak retail market in Hong Kong and Macau and changing tourist consumption patterns, led to double-digit declines in the Group's sales revenue and profit attributable to owners - Global economic growth momentum was insufficient, borrowing costs remained high, and the retail markets in Hong Kong and Macau continued to be weak, with the total retail sales value index decreasing by **6.6% year-on-year** and the Chinese medicine retail category falling by **15.9%**[13](index=13&type=chunk) Key Financial Indicators for H1 2024 (HK$ million) | Metric | H1 2024 (HK$ million) | H1 2023 (HK$ million) | YoY Change | | :--------------------------- | :-------------------- | :-------------------- | :--------- | | Sales Revenue | 664.5 | 812.8 | -18.2% | | Profit Attributable to Owners| 219.8 | 266.0 | -17.4% | [Market Expansion](index=5&type=section&id=4.2%20Market%20Expansion) The Group actively enriched its product lines, expanded its retail network in Hong Kong, and intensified marketing efforts, particularly for "major product" promotions across all media channels, while also participating in international exhibitions and community activities to promote traditional Chinese medicine culture and enhance brand influence - New products launched during the period include Tongrentang Xianling, Baoling Chinese anti-aging NMN series, Guizhi Fuling Pills, and Huoluo Oil[15](index=15&type=chunk) - Three new retail outlets were established in North Point, Mong Kok, and West Kowloon, Hong Kong, with the North Point and West Kowloon stores offering traditional Chinese medicine diagnostic services[15](index=15&type=chunk) - Promoted "major products" such as Tongrentang Angong Niuhuang Wan, Cracked Ganoderma Lucidum Spore Powder Capsules, and Tongren Niuhuang Qingxin Wan through all media channels[15](index=15&type=chunk) - Participated in the 2024 Wuzhen Health Conference, serving as a window for Beijing Tongrentang's international development and actively implementing the "Belt and Road" initiative[15](index=15&type=chunk) - Conducted "Tongrentang Day" traditional Chinese medicine consultation activities at overseas retail outlets and supported Hong Kong social welfare activities to disseminate corporate spirit[16](index=16&type=chunk) [Production and Research & Development](index=6&type=section&id=4.3%20Production%20and%20Research%20%26%20Development) The Group's Tai Po production and R&D base obtained Hong Kong GMP and ISO22000 certifications, enhancing cost competitiveness through production layout improvements, while continuously enriching traditional Chinese medicine resources, securing new product registration certificates and invention patents, and actively exploring new health concepts through international academic collaborations - The Tai Po production and R&D base obtained Hong Kong GMP and ISO22000 certifications, and enhanced its production layout for increased mechanization and automation, aiming to reduce costs and boost production capacity[17](index=17&type=chunk) - Production of several newly registered proprietary Chinese medicines and health foods, including Guizhi Fuling Pills and Ganoderma Turmeric Compound Blood-Activating and Calming Capsules, was completed during the period[18](index=18&type=chunk) - Danggui Buxue Granules obtained a proprietary Chinese medicine registration certificate (HKC–18604) from the Chinese Medicine Council of Hong Kong[18](index=18&type=chunk) - An invention patent for "A freckle-removing and whitening product, its preparation method, and uses" (ZL 2023 1 1206874.8) was successfully granted by the China National Intellectual Property Administration and has been applied to the Tongrentang Baoling Chinese anti-aging NMN series products[18](index=18&type=chunk) - Signed a Memorandum of Understanding with the New Zealand Deer Industry Council to collaborate on the development, registration, and sale of new health functional foods derived from deer products[18](index=18&type=chunk) - Will continue to strengthen cooperation with internationally renowned universities and research institutions such as the University of Hong Kong, Hong Kong Baptist University, and the University of California, to conduct research on the safety and mechanism of action of key products[18](index=18&type=chunk) [Outlook](index=8&type=section&id=4.4%20Outlook) Facing an expanding pharmaceutical consumer market and the vast development potential of traditional Chinese medicine, the Group will continue to strengthen R&D innovation, diversify product offerings, enhance new retail layouts, accelerate new product launches, and promote overseas registration of key products to achieve sustained business growth and high-quality development transformation - The pharmaceutical consumer market is expected to continue expanding, and traditional Chinese medicine holds vast development potential in the global market[20](index=20&type=chunk) - The Group will continuously strengthen R&D innovation, enrich product categories, and expand its proprietary product matrix, such as the Ganoderma series and anti-aging series products[20](index=20&type=chunk) - Focus on business development by strengthening new retail layouts, accelerating new product launches, continuously promoting the registration of key Tongrentang products in Vietnam, and innovating business models to enhance core competitive advantages[20](index=20&type=chunk) [Human Resources](index=8&type=section&id=4.5%20Human%20Resources) As of June 30, 2024, the Group's employee count slightly decreased, with a corresponding reduction in staff costs, and the company regularly reviews its remuneration policy to attract and retain talent Human Resources Overview | Metric | June 30, 2024 | 2023 (employees) | Change (employees) | | :------------- | :------------ | :--------------- | :----------------- | | Number of Employees | 779 | 789 | -10 | | Staff Costs | HK$104.5 million | HK$107.1 million | -HK$2.6 million | - The Group regularly reviews its remuneration policy and provides discretionary bonuses to eligible employees based on performance and individual contributions to attract and retain outstanding staff[21](index=21&type=chunk) [Financial Review](index=8&type=section&id=4.6%20Financial%20Review) The Group maintained a sound financial position with sufficient cash and bank balances, a high current ratio, and a stable gearing ratio, while capital expenditure increased for retail outlet renovations and equipment purchases, with no significant foreign currency risks, major investments, acquisitions, disposals, or pledged assets during the period, and no interim dividend recommended - As of June 30, 2024, cash and bank balances decreased to **HK$1,769.7 million** (December 31, 2023: HK$2,378.7 million), primarily due to increased raw material purchases[22](index=22&type=chunk) Financial Position Indicators (HK$ million) | Metric | June 30, 2024 (HK$ million) | December 31, 2023 (HK$ million) | | :--------------------------- | :-------------------------- | :------------------------------ | | Total Non-Current Assets | 565.3 | 590.1 | | Net Current Assets | 3,491.5 | 3,514.4 | | Net Assets | 3,969.6 | 4,020.7 | | Current Ratio | 16.8 | 11.7 | | Gearing Ratio | 3.4% | 3.3% | - Capital expenditure for the period was **HK$11.2 million** (2023: HK$7.0 million), primarily for retail outlet renovations and the acquisition of machinery and equipment[23](index=23&type=chunk) - There were no significant impacts from foreign currency exchange rate fluctuations, nor any derivative activities or financial instruments used to hedge foreign exchange risks during the period[23](index=23&type=chunk) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[24](index=24&type=chunk) [Condensed Consolidated Financial Statements](index=10&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows, for the interim period [Condensed Consolidated Statement of Profit or Loss](index=10&type=section&id=5.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the condensed consolidated statement of profit or loss for the six months ended June 30, 2024, showing declines in revenue, gross profit, operating profit, and profit for the period compared to the prior year Condensed Consolidated Statement of Profit or Loss Summary (HK$ thousand) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--------------------------- | :------------------ | :------------------ | | Revenue | 664,518 | 812,807 | | Gross Profit | 451,770 | 507,049 | | Operating Profit | 258,878 | 330,035 | | Profit Before Income Tax | 283,642 | 353,968 | | Profit for the Period | 240,344 | 297,871 | | Profit Attributable to Owners| 219,782 | 266,040 | | Basic and Diluted EPS | HK$0.26 | HK$0.32 | [Condensed Consolidated Statement of Comprehensive Income](index=11&type=section&id=5.2%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the condensed consolidated statement of comprehensive income for the six months ended June 30, 2024, showing a decrease in both profit for the period and total comprehensive income, primarily influenced by currency translation differences Condensed Consolidated Statement of Comprehensive Income Summary (HK$ thousand) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :----------------------------------- | :------------------ | :------------------ | | Profit for the Period | 240,344 | 297,871 | | Currency Translation Differences | (5,133) | (6,896) | | Fair Value Changes of Financial Assets | 990 | 750 | | Total Comprehensive Income for the Period | 234,812 | 291,871 | [Condensed Consolidated Statement of Financial Position](index=12&type=section&id=5.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the condensed consolidated statement of financial position as of June 30, 2024, showing decreases in total assets and total equity compared to the end of 2023, with a significant increase in inventories within current assets, while short-term bank deposits and trade receivables decreased Condensed Consolidated Statement of Financial Position Summary (HK$ thousand) | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Total Assets | 4,277,811 | 4,434,445 | | Total Equity | 3,969,552 | 4,020,690 | | Total Liabilities | 308,259 | 413,755 | | Inventories | 1,601,895 | 1,011,649 | | Short-term Bank Deposits | 48,256 | 1,378,879 | | Cash and Cash Equivalents | 1,721,491 | 999,814 | [Condensed Consolidated Statement of Changes in Equity](index=14&type=section&id=5.4%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the condensed consolidated statement of changes in equity for the six months ended June 30, 2024, reflecting the impact of profit for the period, other comprehensive loss, and dividend payments on equity Condensed Consolidated Statement of Changes in Equity Summary (HK$ thousand) | Metric | June 30, 2024 (HK$ thousand) | June 30, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :--------------------------- | | Total Equity at Beginning of Period | 4,020,690 | 3,738,793 | | Total Comprehensive Income | 234,812 | 291,871 | | Dividends Paid | (276,243) | (276,243) | | Total Equity at End of Period| 3,969,552 | 3,739,366 | [Condensed Consolidated Statement of Cash Flows](index=15&type=section&id=5.5%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the condensed consolidated statement of cash flows for the six months ended June 30, 2024, showing a shift from positive to negative net cash from operating activities, a change from negative to positive net cash from investing activities, and continued negative net cash from financing activities, resulting in a net increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary (HK$ thousand) | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :----------------------------------- | :------------------ | :------------------ | | Net Cash from Operating Activities | (303,857) | 514,542 | | Net Cash from Investing Activities | 1,350,425 | (351,043) | | Net Cash from Financing Activities | (320,226) | (322,997) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 726,342 | (159,498) | | Cash and Cash Equivalents at End of Period | 1,721,491 | 1,826,808 | [Notes to the Condensed Consolidated Interim Financial Information](index=16&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the condensed consolidated interim financial information, covering general information, accounting policies, risk management, segment reporting, and specific financial statement items [General Information and Basis of Preparation](index=16&type=section&id=6.1%20General%20Information%20and%20Basis%20of%20Preparation) This section outlines the Group's business scope, holding structure, listing information, and the basis for preparing the condensed consolidated interim financial information, including adherence to HKAS 34 and Listing Rules disclosure requirements - The Group is primarily engaged in the manufacturing, retail, and wholesale of traditional Chinese medicine products and health supplements, and provides traditional Chinese medicine diagnostic services[38](index=38&type=chunk) - The Company's immediate holding company is Beijing Tongrentang Technologies Co, Ltd, and its ultimate holding company is China Beijing Tongrentang (Group) Co, Ltd[38](index=38&type=chunk) - The condensed consolidated interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Listing Rules of the Stock Exchange[39](index=39&type=chunk) [Significant Accounting Policies and Estimates](index=17&type=section&id=6.2%20Significant%20Accounting%20Policies%20and%20Estimates) This section states that the accounting policies used for the interim financial information are consistent with the previous year, lists new amendments to frameworks and standards effective from January 1, 2024, which have no significant financial impact, and confirms that management's judgments, estimates, and assumptions remain consistent with the prior annual financial statements - The accounting policies adopted by the Group are consistent with those applied in the financial statements for the year ended December 31, 2023[41](index=41&type=chunk) - The adoption of new and revised frameworks and standards, such as HKFRS 16 (Amendments), had no significant financial impact on this condensed consolidated interim financial information[42](index=42&type=chunk) - The key judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing this condensed consolidated interim financial information were the same as those applied to the 2023 annual financial statements[44](index=44&type=chunk) [Financial Risk Management](index=18&type=section&id=6.3%20Financial%20Risk%20Management) The Group's operations are exposed to market risks, including currency and cash flow interest rate risks, credit risk, and liquidity risk, with no significant changes in risk management policies, procedures, or contractual undiscounted cash outflows of financial liabilities since the last year-end - The Group's operations are exposed to market risks (including currency risk and cash flow interest rate risk), credit risk, and liquidity risk[45](index=45&type=chunk) - There have been no changes in risk management policies and procedures since the last year-end date[45](index=45&type=chunk) - There have been no significant changes in the contractual undiscounted cash outflows of financial liabilities compared to December 31, 2023[46](index=46&type=chunk) [Revenue and Segment Information](index=19&type=section&id=6.4%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from product sales and service income, analyzed across three operating segments: Hong Kong, Mainland China, and overseas, with a decrease in total revenue due to declines in Hong Kong and overseas segments, partially offset by slight growth in Mainland China, and detailed disclosures provided for each segment's assets and liabilities Revenue Composition (HK$ thousand) | Revenue Source | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--------------------------- | :------------------ | :------------------ | | Sales of Products | 642,311 | 790,029 | | Service Income | 21,996 | 22,731 | | Brand Usage Fee Income | 211 | 47 | | **Total Revenue** | **664,518** | **812,807** | - The Group has three reportable operating segments: Hong Kong (retail, wholesale, traditional Chinese medicine consultation, brand usage fees), Mainland China (wholesale of health supplements, exclusive distribution of "Tongrentang" brand products), and Overseas (retail, wholesale, traditional Chinese medicine consultation)[51](index=51&type=chunk) Revenue from External Customers (HK$ thousand) | Region | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :----------- | :------------------ | :------------------ | | Hong Kong | 333,807 | 439,328 | | Mainland China | 116,342 | 107,867 | | Overseas | 214,369 | 265,612 | | **Total** | **664,518** | **812,807** | Segment Assets and Liabilities (HK$ thousand) | Metric | Hong Kong (HK$ thousand) | Mainland China (HK$ thousand) | Overseas (HK$ thousand) | Total (HK$ thousand) | | :--------------------------- | :----------------------- | :---------------------------- | :---------------------- | :------------------- | | Total Assets as at June 30, 2024 | 3,300,901 | 458,253 | 518,657 | 4,277,811 | | Total Liabilities as at June 30, 2024 | (131,448) | (72,868) | (103,943) | (308,259) | | Total Assets as at Dec 31, 2023 | 3,472,865 | 469,463 | 492,117 | 4,434,445 | | Total Liabilities as at Dec 31, 2023 | (241,363) | (68,399) | (103,993) | (413,755) | [Expenses by Nature](index=24&type=section&id=6.5%20Expenses%20by%20Nature) This section details the various expenses for the six months ended June 30, 2024, with cost of inventories sold and employee benefit expenses being the primary components, and advertising and promotion expenses also representing a significant portion Expenses by Nature (HK$ thousand) | Expense Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--------------------------- | :------------------ | :------------------ | | Cost of Inventories Sold | 169,295 | 267,406 | | Employee Benefit Expenses | 104,467 | 107,100 | | Depreciation of Right-of-Use Assets | 32,569 | 28,894 | | Advertising and Promotion Expenses | 40,371 | 29,000 | | Reversal of Impairment Loss on Trade Receivables | (6,907) | - | [Net Finance Income](index=25&type=section&id=6.6%20Net%20Finance%20Income) This section presents the net finance income for the six months ended June 30, 2024, primarily comprising interest income from bank deposits, with relatively low finance costs, resulting in an increase in net finance income compared to the prior year Net Finance Income (HK$ thousand) | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :------------------- | :------------------ | :------------------ | | Finance Income | 34,965 | 28,981 | | Finance Expenses | (3,219) | (2,669) | | **Net Finance Income** | **31,746** | **26,312** | [Income Tax Expense](index=25&type=section&id=6.7%20Income%20Tax%20Expense) This section explains the Group's income tax expense, with Hong Kong profits tax at 16.5%, Mainland China corporate income tax at 25%, and overseas profits taxed at local rates, showing a decrease in income tax expense compared to the prior year - Hong Kong profits tax rate is **16.5%**, and Mainland China corporate income tax rate is **25%**[64](index=64&type=chunk) Income Tax Expense (HK$ thousand) | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :------------------- | :------------------ | :------------------ | | Current Income Tax | 25,684 | 59,199 | | Deferred Income Tax | 17,614 | (3,102) | | **Income Tax Expense** | **43,298** | **56,097** | [Earnings Per Share and Dividends](index=26&type=section&id=6.8%20Earnings%20Per%20Share%20and%20Dividends) This section provides the calculation and results of basic earnings per share and dividend payment information, with earnings per share at HK$0.26 for the six months ended June 30, 2024, and no interim dividend recommended by the Board Earnings Per Share (HK$) | Metric | 2024 (HK$) | 2023 (HK$) | | :--------------------------- | :--------- | :--------- | | Profit Attributable to Owners (HK$ thousand) | 219,782 | 266,040 | | Weighted Average Number of Ordinary Shares (thousand shares) | 837,100 | 837,100 | | Earnings Per Share | 0.26 | 0.32 | - For the six months ended June 30, 2024, the Board does not recommend the payment of an interim dividend (2023: nil)[68](index=68&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=27&type=section&id=6.9%20Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) This section analyzes the changes in the net book value of property, plant and equipment and intangible assets, showing a slight decrease in both, primarily due to depreciation expenses and currency translation differences Net Book Value of Property, Plant and Equipment (HK$ thousand) | Item | Amount (HK$ thousand) | | :--------------------------- | :-------------------- | | As at January 1, 2024 | 213,816 | | Additions | 6,748 | | Depreciation Expense | (8,655) | | Currency Translation Differences | (2,315) | | As at June 30, 2024 | 209,592 | Net Book Value of Intangible Assets (HK$ thousand) | Item | Amount (HK$ thousand) | | :--------------------------- | :-------------------- | | As at January 1, 2024 | 56,387 | | Amortisation | (1,686) | | As at June 30, 2024 | 54,701 | [Inventories](index=27&type=section&id=6.10%20Inventories) This section provides the detailed composition of inventories, including raw materials, work-in-progress, and finished goods and trading merchandise, showing a significant increase in total inventories as of June 30, 2024, compared to the end of 2023, primarily due to an increase in raw materials Inventories Composition (HK$ thousand) | Inventory Category | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Raw Materials | 1,300,283 | 776,294 | | Work-in-Progress | 107,992 | 56,576 | | Finished Goods and Trading Merchandise | 193,620 | 178,779 | | **Total Inventories** | **1,601,895** | **1,011,649** | [Trade and Other Current Assets](index=28&type=section&id=6.11%20Trade%20and%20Other%20Current%20Assets) This section details the composition and aging analysis of trade and other current assets, showing a decrease in both total and net trade receivables as of June 30, 2024, compared to the end of 2023, with a significant reduction in receivables from third parties Trade and Other Current Assets (HK$ thousand) | Item | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Gross Trade Receivables | 319,545 | 436,402 | | Less: Impairment Loss | (34,006) | (41,158) | | Net Trade Receivables | 285,539 | 395,244 | | Bills Receivable | 3,044 | - | | Prepayments | 11,517 | 11,623 | | Other Receivables | 16,423 | 26,774 | | Deposits | 23,391 | 19,369 | | Amounts Due from Joint Ventures | 970 | 970 | | **Total** | **340,884** | **453,980** | Aging Analysis of Trade Receivables (HK$ thousand) | Aging Period | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Up to 90 days | 124,742 | 188,302 | | 91 to 180 days | 1,625 | 326 | | 181 to 365 days | 3,974 | 3,092 | | Over 365 days | 189,204 | 244,682 | | **Total** | **319,545** | **436,402** | [Share Capital](index=29&type=section&id=6.12%20Share%20Capital) This section details the company's issued and fully paid ordinary share capital, which remained unchanged in both number and amount as of June 30, 2024 Share Capital Information | Item | Number of Shares | Share Capital (HK$ thousand) | | :--------------------------- | :--------------- | :--------------------------- | | As at January 1, 2024 and June 30, 2024 | 837,100,000 | 938,789 | [Trade and Other Payables](index=29&type=section&id=6.13%20Trade%20and%20Other%20Payables) This section details the composition and aging analysis of trade and other payables, showing a significant decrease in total trade payables as of June 30, 2024, compared to the end of 2023, primarily due to a reduction in amounts owed to third parties Trade and Other Payables (HK$ thousand) | Item | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Trade Payables | 78,121 | 176,977 | | Accruals and Other Payables | 58,720 | 65,220 | | Contract Liabilities | 3,619 | 3,211 | | **Total** | **140,460** | **245,408** | Aging Analysis of Trade Payables (HK$ thousand) | Aging Period | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Up to 90 days | 61,755 | 157,052 | | 91 to 180 days | 256 | 2,493 | | 181 to 365 days | 3,490 | 6,666 | | Over 365 days | 12,620 | 10,766 | | **Total** | **78,121** | **176,977** | [Commitments](index=30&type=section&id=6.14%20Commitments) This section discloses the Group's capital and lease commitments, showing an increase in contracted but unprovided capital commitments for property, plant and equipment and intangible assets, as well as an increase in undiscounted future lease payments for leases not yet commenced, as of June 30, 2024 Capital Commitments (HK$ thousand) | Item | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Contracted but not provided for | 16,908 | 15,961 | Lease Commitments (HK$ thousand) | Item | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Within one year | 1,648 | 4,944 | - As of June 30, 2024, the Group's committed but not yet commenced undiscounted future lease payments amounted to **HK$11,987,000** (December 31, 2023: HK$7,400,000)[82](index=82&type=chunk) [Significant Related Party Transactions](index=31&type=section&id=6.15%20Significant%20Related%20Party%20Transactions) This section discloses significant transactions between the Group and its related parties, including sales and purchases of products, brand usage fee income, rental expenses, advertising agency service fees, and key management personnel compensation, all conducted at mutually agreed prices and terms Summary of Related Party Transactions (HK$ thousand) | Transaction Type | Related Party | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--------------------------- | :--------------------------- | :------------------ | :------------------ | | Sales of Products to | Fellow Subsidiaries | 7,977 | 1,792 | | | Joint Ventures | 685 | 1,114 | | Purchases of Products from | Immediate Holding Company | 30,494 | 19,257 | | | Intermediate Holding Company | 51,924 | 30,832 | | Brand Usage Fee Income from Joint Ventures | Joint Ventures | 214 | 47 | | Rental Expenses to | Immediate Holding Company | 504 | 504 | | | Fellow Subsidiaries | 2,294 | 2,252 | | Advertising Agency Service Fees Paid to Fellow Subsidiaries | Fellow Subsidiaries | 545 | 830 | Key Management Personnel Compensation (HK$ thousand) | Compensation Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--------------------------- | :------------------ | :------------------ | | Salaries and Other Short-term Employee Benefits | 3,835 | 3,007 | | Pension Costs | 325 | 340 | | **Total** | **4,160** | **3,347** | - Brand usage fees are collected annually by the Company from joint ventures based on the higher of **1% of their operating revenue** or **1.5% of their profit before tax**, as per brand usage rights agreements[88](index=88&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) This section covers additional information including directors' and substantial shareholders' interests in shares, rights to acquire securities, competing business interests, dealings in listed securities, corporate governance, and risk management and internal control [Directors' and Chief Executive's Interests in Shares](index=33&type=section&id=7.1%20Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares) This section discloses the interests of the company's directors and chief executive in the company's shares as of June 30, 2024, with only Ms. Chen Xiu holding 43,000 shares as a beneficial owner Long Position in the Company's Shares | Director's Name | Nature of Interest | Capacity | Number of Shares | Approximate Percentage of Issued Share Capital | | :-------------- | :----------------- | :--------- | :--------------- | :--------------------------------------------- | | Chen Xiu | Beneficial Owner | Personal | 43,000 | 0.005% | [Substantial Shareholders](index=34&type=section&id=7.2%20Substantial%20Shareholders) This section lists the substantial shareholders with significant interests in the company's shares as of June 30, 2024, including Tongrentang Technologies, Tongrentang Co, and Tongrentang Group Company, detailing their shareholding percentages and relationships Substantial Shareholders' Long Position in Shares | Shareholder Name | Capacity | Number of Shares | Approximate Percentage of Issued Share Capital | | :--------------------------- | :--------------------------- | :--------------- | :--------------------------------------------- | | Tongrentang Technologies | Beneficial Owner | 318,540,000 | 38.05% | | Tongrentang Co | Beneficial Owner | 281,460,000 | 33.62% | | | Interest in Controlled Corporation | 318,540,000 | 38.05% | | Tongrentang Group Company | Interest in Controlled Corporation | 600,000,000 | 71.67% | - Tongrentang Co is deemed to be interested in **318,540,000 shares** of the Company held by Tongrentang Technologies[94](index=94&type=chunk) - Tongrentang Group Company is deemed to be interested in **318,540,000 shares** and **281,460,000 shares** of the Company held by Tongrentang Technologies and Tongrentang Co respectively[94](index=94&type=chunk) [Rights to Acquire Shares or Debentures](index=35&type=section&id=7.3%20Rights%20to%20Acquire%20Shares%20or%20Debentures) As of June 30, 2024, neither the company, its subsidiaries, nor fellow subsidiaries had entered into any arrangements granting directors, chief executives, or their associates the right to subscribe for securities of the company or any associated corporation - For the six months ended June 30, 2024, neither the Company nor any of its subsidiaries or fellow subsidiaries had entered into any arrangements that would enable the directors or chief executive of the Company or their respective associates to acquire rights to subscribe for securities of the Company or any associated corporation[96](index=96&type=chunk) [Competing Business Interests](index=35&type=section&id=7.4%20Competing%20Business%20Interests) This section details the "Non-Competition Deed" signed between the company and its controlling shareholders to define business scopes and avoid potential competition, restricting controlling shareholders from engaging in specific restricted businesses in non-Mainland China markets and establishing monitoring mechanisms, including an Executive Committee and a Supervisory Committee, to ensure compliance and protect shareholder interests - The Company and its controlling shareholders entered into a **Non-Competition Deed** on April 18, 2013, to delineate their respective business scopes and avoid engaging in restricted businesses in non-Mainland China markets, such as the R&D, manufacturing, and sale of products using Ganoderma or Ganoderma spores as raw materials, any "Tongrentang" brand products (excluding Japan), and Angong Niuhuang Wan[97](index=97&type=chunk)[98](index=98&type=chunk) - The controlling shareholders undertook that if they became aware of any new business opportunities related to the restricted businesses, they would immediately notify the Company and use their best endeavors to procure that such opportunities be offered to the Company on terms no less favorable than those offered to them[98](index=98&type=chunk) - An Executive Committee, comprising two non-interested directors, was established to conduct quarterly reviews of the parent group's distribution channels and R&D product portfolio to monitor competing businesses[99](index=99&type=chunk) - A Supervisory Committee, comprising three independent non-executive directors, was established to review the Executive Committee's inspection records and report to the Board[99](index=99&type=chunk) [Dealings in Listed Securities and Corporate Governance](index=38&type=section&id=7.5%20Dealings%20in%20Listed%20Securities%20and%20Corporate%20Governance) This section confirms that the company and its subsidiaries did not purchase, sell, or redeem any listed securities during the period, that the company complied with the Model Code for Securities Transactions by Directors and the Corporate Governance Code, and discloses changes in director information - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[100](index=100&type=chunk) - All directors confirmed compliance with the Model Code set out in Appendix C3 of the Listing Rules during the period[101](index=101&type=chunk) - The Company has complied with the requirements set out in Appendix C1 of the Listing Rules' Corporate Governance Code throughout the period[102](index=102&type=chunk) - Mr. Chen Fei served concurrently as the Company's Acting Chief Executive Officer from March 28, 2024, to May 10, 2024; Mr. Wang Chi was appointed as an Executive Director and Chief Executive Officer of the Company on May 10, 2024[103](index=103&type=chunk) [Risk Management and Internal Control and Audit Committee](index=39&type=section&id=7.6%20Risk%20Management%20and%20Internal%20Control%20and%20Audit%20Committee) The Group employs a "three lines of defense" risk management and internal control governance framework to continuously identify, assess, and control operational risks, reporting regularly to the Audit Committee and the Board, and the Audit Committee has reviewed the unaudited condensed consolidated interim financial information for the period with no disagreements with the Board - The Group's risk management and internal control governance framework is based on a "three lines of defense" model, encompassing daily operational management and control, risk and compliance management, and independent oversight assurance[105](index=105&type=chunk) - The Group proactively, systematically, and continuously identifies and assesses risks in its operations, integrating risk control concepts into all aspects of its operational and governance processes[105](index=105&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial information and interim report for the six months ended June 30, 2024, and there were no disagreements between the Board and the Audit Committee[106](index=106&type=chunk)

Financial Performance - For the six months ended June 30, 2024, the company's revenue was HKD 664.5 million, a decrease of 18.2% compared to HKD 812.8 million in the same period of 2023[10] - The profit attributable to the company's owners for the same period was HKD 219.8 million, down 17.4% from HKD 266.0 million in 2023[10] - Gross profit for the first half of 2024 was HKD 451.8 million, representing a decline of 10.9% from HKD 507.0 million in the previous year[5] - The operating profit for the period was HKD 258.9 million, down 21.5% from HKD 330.0 million in the prior year[23] - The total comprehensive income for the period was HKD 234.8 million, down from HKD 291.9 million in the previous year[25] - The group reported a profit for the period of HKD 240,344 thousand, down from HKD 297,871 thousand in the previous year, indicating a decline of 19.3%[47] Assets and Liabilities - The total assets as of June 30, 2024, were HKD 4,277.8 million, a decrease of 3.5% from HKD 4,434.4 million at the end of 2023[5] - The total equity as of June 30, 2024, was HKD 3,969.6 million, a slight decrease of 1.3% from HKD 4,020.7 million at the end of 2023[5] - The debt ratio remained low at 3.4% as of June 30, 2024, compared to 3.3% as of December 31, 2023[20] - Total assets as of June 30, 2024, amounted to HKD 4,277,811 thousand, with total liabilities of HKD 308,259 thousand[48] Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2024, was (303,857) thousand HKD, compared to 514,542 thousand HKD for the same period in 2023[34] - The net cash generated from investing activities was 1,350,425 thousand HKD for the six months ended June 30, 2024, compared to (351,043) thousand HKD for the same period in 2023[34] - The net cash used in financing activities was (320,226) thousand HKD for the six months ended June 30, 2024, compared to (322,997) thousand HKD for the same period in 2023[34] - The cash and cash equivalents at the end of the period were 1,721,491 thousand HKD, compared to 1,826,808 thousand HKD at the end of the same period in 2023[34] Market and Sales Performance - The retail sales value in Hong Kong for the first half of 2024 dropped by 6.6%, with the Chinese medicine retail category declining by 15.9%[10] - The company faced challenges due to a significant drop in consumer spending patterns among tourists and locals, impacting the retail environment in Hong Kong and Macau[10] - Revenue from external customers in Hong Kong was HKD 333,807 thousand, while revenue from mainland China and overseas was HKD 116,342 thousand and HKD 214,369 thousand, respectively[45] - Sales product revenue was HKD 642,311 thousand, down from HKD 790,029 thousand, representing a decline of 18.7%[41] Product Development and Expansion - The company launched several new products, including the Tong Ren Tang Xian Ling and the anti-aging NMN series, expanding its product matrix[12] - The company plans to enhance R&D investment in key products and expand its product matrix, focusing on anti-aging and Ling Zhi product lines[17] - The company aims to strengthen its new retail layout and accelerate the launch of new products, particularly in the Vietnamese market[17] - The company completed the production of multiple new registered traditional Chinese medicines and health foods, including Gui Zhi Fu Ling Wan and Ling Zhi Ginger Turmeric capsules[15] Employee and Management Information - The company had 779 employees as of June 30, 2024, with employee costs amounting to HKD 104.5 million, a decrease from HKD 107.1 million in 2023[18] - The total remuneration for key management personnel was HKD 4,160,000 for the six months ended June 30, 2024, an increase of 24% from HKD 3,347,000 for the same period in 2023[76] Governance and Risk Management - The group emphasizes the importance of risk management and internal control in its operations and governance processes[93] - The risk management framework is based on a "three lines of defense" model, including daily operational management, risk compliance management, and independent oversight[93] - The audit committee reviewed the unaudited condensed consolidated interim financial information for the six months ending June 30, 2024, with no disagreements on accounting treatment between the board and the audit committee[94] Shareholder Information - The major shareholders include Tongrentang Technology with 318,540,000 shares (38.05%) and Tongrentang Group Company with 600,000,000 shares (71.67%) of the issued share capital[82] - Tongrentang Holdings directly owns approximately 46.85% of Tongrentang Technology's issued share capital, equating to 318,540,000 shares[82]

Company Milestones and Events - In 2023, Beijing Tong Ren Tang Chinese Medicine Company Limited celebrated its 30th anniversary of international development and the 10th anniversary of its listing[13]. - The company opened a new retail outlet in Tseung Kwan O, Hong Kong, in April 2023[14]. - In June 2023, the company participated in a cultural event showcasing its royal medicine heritage and was awarded the "Quam IR Awards 2022 – Sustainable Development Category – Gold"[15]. - The company showcased its history and products during the "Tong Ren Tang's King of Medicine Festival" in August 2023, raising brand awareness[16]. - In November 2023, the company participated in the "6th China International Import Expo" as an exporter, highlighting its star products and first Chinese anti-aging product[19]. Financial Performance - Financial highlights for 2023 will be detailed in the annual report, with specific figures to be disclosed[20]. - Revenue for 2023 was HK$1,524,945,000, a decrease of 12% compared to HK$1,731,095,000 in 2022[23]. - Gross profit margin improved to 68.7% in 2023 from 66.4% in 2022[23]. - Profit for the year was HK$590,587,000, down from HK$691,293,000 in the previous year, representing a decline of 14.6%[23]. - Earnings per share decreased to HK$0.65 in 2023 from HK$0.77 in 2022, a drop of 15.6%[23]. - Non-current assets increased to HK$590,123,000 in 2023 from HK$542,208,000 in 2022, reflecting a growth of 8.8%[23]. - Current assets rose to HK$3,844,322,000 in 2023, up from HK$3,683,071,000 in 2022, an increase of 4.4%[23]. - Total assets reached HK$4,434,445,000 in 2023, compared to HK$4,225,279,000 in 2022, marking a growth of 4.9%[23]. - The current ratio improved to 11.7 in 2023 from 8.8 in 2022, indicating better liquidity[23]. - The dividend payout ratio increased to 51.1% in 2023 from 42.8% in 2022, indicating a higher return to shareholders[23]. Market and Product Development - The Group is focusing on market opportunities in Southeast Asia and enhancing product lines through increased R&D investment[35]. - The Group plans to actively adjust its business model and implement a dual-driven strategy, including establishing new retail outlets in Hong Kong and expanding international sales channels[40]. - The Group aims to pursue external growth through strategic investments, mergers, acquisitions, and partnerships with high-quality collaborators[40]. - The Group's focus on innovation and product upgrades aims to enhance its product line and improve its ability to respond to economic risks[46]. - The Group's strategic initiatives are designed to position it as a global leader in the field of Chinese medicine and macro-health[40]. Research and Development - The Group continues to explore technological innovation and R&D in traditional Chinese medicine[19]. - The Group has 61 authorized patents as of December 31, 2023, with 6 PCT international applications submitted[59]. - The Group has developed a range of products incorporating modern technology, such as collagen peptides from marine sources, enhancing digestibility and absorption[98]. - The Group has invested significantly in research and development, focusing on new product development to meet diverse market demands, particularly in disease prevention and body condition nourishment[190]. Marketing and Brand Recognition - The Group's marketing activities included outdoor advertisements and community exhibitions, significantly increasing brand awareness and consumer engagement[63][64]. - The Group received multiple awards, including the "Excellence Award of the TCM Brand" in Hong Kong and the "Most Influential Brand Award in Asia" in Singapore, highlighting its strong brand recognition[67]. - The Group's marketing strategies adapted to changing market conditions, including themed campaigns for health awareness and community engagement post-pandemic[65][66]. Employee and Corporate Governance - Staff costs for the year amounted to HK$245.7 million, reflecting a 12.1% increase from HK$219.1 million in 2022, with a total of 798 employees as of December 31, 2023[68]. - The Group emphasizes a people-oriented approach, ensuring a friendly and inclusive working environment to enhance employee retention and corporate competitiveness[196]. - The Group provides comprehensive medical check-ups and basic medical, dental, and accident insurance for employees, along with free Chinese medicine consultation services for their direct relatives[198]. - The Group adheres to a principle of equal pay for equal work, providing equal development opportunities regardless of race, gender, age, or religion[199]. Environmental, Social, and Governance (ESG) Initiatives - The Group's 2023 Environmental, Social and Governance Report outlines its policies and performance related to corporate social responsibility and sustainable development[116]. - The Group is actively implementing environmental management measures to reduce the operational burden on the environment and is identifying climate-related risks and opportunities[113][114]. - The Group has established a clear and effective governance system to foster stable and sustainable corporate development, focusing on environmental, social, and governance (ESG) aspects[122]. - The Group emphasizes the importance of supply chain stability for business development, with established "Procurement Management Rules" and "Suppliers Management Rules" to guide supplier assessment[175]. Quality Control and Compliance - The Group implements quality management practices, including Good Manufacturing Practice (GMP) and Hazard Analysis and Critical Control Points (HACCP), to maintain product safety and quality[137]. - The Group has established a comprehensive quality management system to ensure product testing accuracy and compliance with relevant laws[131]. - The Group has implemented a comprehensive quality control strategy, including guidelines for material processing, production, and product inspection, to maintain product safety and quality[168]. - The Group conducts comprehensive internal quality inspections on each batch of finished products to ensure compliance with safety and quality standards in Hong Kong[166]. Risk Management - The Group implements a risk management framework consisting of five major components and the "Three Lines of Defense" model to identify, evaluate, and manage significant risks[124]. - Major risks related to ESG include regulatory risks in the Chinese medicine industry and food and health products, which the Group mitigates by enhancing compliance awareness and improving management systems[128]. - The Group has established management procedures for quality risk reporting and product recall to safeguard the quality of marketed products[131]. Customer Engagement and Feedback - Customer feedback is collected through various channels, including retail staff, customer service hotlines, and social media, with mechanisms in place to handle complaints appropriately[138]. - The Group has established measures for additional paid holidays, including marriage leave and compassionate leave, to ensure employees have adequate rest[199].

Investment Rating - The report maintains a "Buy" rating for Tong Ren Tang Guo Yao (3613) with a target price of HKD 12.99, indicating a potential upside of 38.0% from the current price [1][3]. Core Views - The company experienced a significant decline in revenue from mainland China in 2023, with a total revenue of HKD 1.3 billion, down 70.2% year-on-year, primarily due to high inventory levels from previous stockpiling by distributors [1]. - Despite the challenges in mainland sales, the company is expected to recover in 2024 as inventory levels normalize and marketing efforts are intensified [1]. - The company is expanding its product offerings and sales channels, including the introduction of new specifications and categories for its Lingzhi spore powder products, and enhancing cooperation with marketing firms in Hong Kong and overseas [1]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of HKD 1.3 billion from mainland China, a decrease of 70.2% year-on-year, while Hong Kong sales increased by 10.8% to HKD 9.2 billion, and overseas sales reached HKD 4.8 billion, up 1.8% [1]. - The overall gross margin improved by 2.3 percentage points to 68.7%, while net profit decreased by 4.6% to HKD 590 million, resulting in a net profit margin of 35.4% [1]. Product and Market Expansion - The company is focusing on the recovery of its Lingzhi spore powder sales as inventory is depleted and competition issues are resolved [1]. - New product registrations in Hong Kong and Southeast Asia are expected to enhance market presence and drive sales growth [1]. - The company is also developing flagship stores and marketing initiatives in Macau and Hong Kong to promote its products [1].

Financial Performance - Revenue for the year ended December 31, 2023, was HKD 1,524,945, a decrease of 11.9% compared to HKD 1,731,095 in 2022[2] - Gross profit for the same period was HKD 1,047,243, down 8.9% from HKD 1,150,140 in the previous year[2] - Annual profit decreased by 14.6% to HKD 590,587 from HKD 691,293 in 2022[2] - Profit attributable to the company's owners was HKD 540,393, a decline of 16.3% from HKD 645,875 in the prior year[2] - Basic and diluted earnings per share were HKD 0.65, down from HKD 0.77 in 2022[2] - The operating profit for the year was HKD 624,149, with a net profit of HKD 590,587 after tax expenses of HKD 97,203[16] - The group’s annual profit decreased by 14.6% to HKD 590.6 million, with a net profit margin of 38.7%[65] - Basic earnings per share for 2023 is HKD 0.65, down from HKD 0.77 in 2022, indicating a decline of about 15.6%[35] Revenue Breakdown - Total revenue for the year ended December 31, 2023, was HKD 1,882,301, with external customer revenue contributing HKD 1,524,945[16] - The Hong Kong segment generated revenue of HKD 1,171,231, while the Mainland China segment contributed HKD 228,634, and the Overseas segment accounted for HKD 482,436[16] - Revenue from major customer A was 273,456 thousand HKD in 2023, down from 411,160 thousand HKD in 2022, a decrease of 33.5%[23] - Revenue from Hong Kong increased to 915,323 thousand HKD in 2023, up 10.8% from 826,032 thousand HKD in 2022[26] - Revenue from overseas markets was HKD 480.3 million, reflecting a growth of 1.8% from HKD 471.6 million in 2022[47] - Revenue from the mainland China market plummeted by 70.2% to HKD 129.3 million in 2023, down from HKD 433.5 million in 2022[47] Assets and Liabilities - Cash and bank balances increased by 6.0% to HKD 2,378,693 from HKD 2,243,963 in the previous year[2] - Total assets rose by 5.0% to HKD 4,434,445 compared to HKD 4,225,279 in 2022[2] - Total liabilities for the company were reported at 413,755 thousand HKD, reflecting a significant increase from previous periods[20] - Trade receivables decreased significantly to HKD 395,244,000 in 2023 from HKD 923,230,000 in 2022, a reduction of about 57%[38] - The total inventory as of December 31, 2023, is HKD 1,011,649,000, compared to HKD 469,784,000 in 2022, indicating an increase of approximately 115%[37] Expenses and Costs - Employee costs increased by 12.1% to HKD 245.7 million, reflecting the company's efforts to attract and retain talent[56] - Distribution and selling expenses rose by 23.6% to HKD 231.3 million, accounting for 15.2% of revenue, up from 10.8% the previous year[60] - General and administrative expenses increased by 15.9% to HKD 179.0 million, representing 11.7% of revenue, up from 8.9%[61] - The cost of inventory recognized as cost of sales for 2023 is HKD 392,093,000, down from HKD 505,359,000 in 2022, representing a decrease of approximately 22.3%[39] Dividends and Shareholder Information - Total dividends paid in 2023 amount to HKD 276,243,000, with a dividend per share of HKD 0.33, compared to HKD 443,663,000 and HKD 0.53 per share in 2022[36] - The proposed final dividend for the year ending December 31, 2023, is HKD 0.33 per ordinary share, consistent with the previous year[74] - The final dividend will be presented for shareholder approval at the annual general meeting on May 31, 2024, and if approved, will be paid on June 11, 2024[74] Corporate Governance and Compliance - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Companies Ordinance[9] - The financial statements for the years ended December 31, 2022, and December 31, 2023, have been audited without any reservations by independent auditors[9] - The company has adhered to the corporate governance code as stipulated in the listing rules as of December 31, 2023[79] - The audit committee, composed of three independent non-executive directors, has reviewed the company's accounting policies and financial reporting procedures for the year ending December 31, 2023[77] Strategic Initiatives and Future Outlook - The company plans to expand its market presence through retail and wholesale of traditional Chinese medicine products and health supplements in both domestic and international markets[16] - The company is actively evaluating new product development and technology advancements to strengthen its market position and drive future growth[16] - The company aims to enhance product quality management and technological innovation to optimize production efficiency and resource reserves[48] - The group aims to become a leader in the global traditional Chinese medicine health sector, leveraging government support and increasing health awareness among consumers[55]

Financial Performance - Revenue for the first half of 2023 reached HKD 812.8 million, a 29.8% increase compared to HKD 626.4 million in 2022[8] - Profit attributable to owners of the company was HKD 266.0 million, up 23.9% from HKD 214.6 million in the previous year[8] - Gross profit for the first half of 2023 was HKD 507.0 million, reflecting a 17.2% increase from HKD 432.5 million in 2022[3] - The company reported a pre-tax profit of HKD 354.0 million, which is a 22.8% increase from HKD 288.4 million in 2022[3] - The group reported revenue of HKD 812.8 million for the six months ended June 30, 2023, an increase from HKD 626.4 million in the same period of 2022, representing a growth of 29.7%[21] - Gross profit for the same period was HKD 507.0 million, up from HKD 432.5 million, indicating a gross margin improvement[21] - The operating profit increased to HKD 330.0 million from HKD 291.9 million, reflecting a growth of 13.0%[21] - The company reported a profit of 297,871 thousand HKD for the six months ended June 30, 2023, representing a 25% increase from 238,123 thousand HKD in the same period of 2022[22] - Total comprehensive income for the period was 291,871 thousand HKD, up from 226,236 thousand HKD, indicating a growth of approximately 29% year-over-year[22] - The company's profit attributable to owners for the six months ended June 30, 2023, was HKD 266,040,000, an increase of 24% from HKD 214,638,000 in 2022[50] - Basic earnings per share for the first half of 2023 was HKD 0.32, compared to HKD 0.26 for the same period in 2022, reflecting a 23% increase[50] Cash and Liquidity - Cash and bank balances as of June 30, 2023, totaled HKD 2,448.1 million, a 9.1% increase from HKD 2,244.0 million at the end of 2022[3] - The group maintained a cash and bank balance of HKD 2,448.1 million as of June 30, 2023, compared to HKD 2,244.0 million at the end of 2022[16] - The current ratio improved to 12.5 as of June 30, 2023, from 8.8 at the end of 2022, indicating strong liquidity[16] - For the six months ended June 30, 2023, the net cash generated from operating activities was HKD 514,542,000, an increase of 45% compared to HKD 355,713,000 in 2022[26] - The cash and cash equivalents at the end of the period were HKD 1,826,808,000, a substantial increase from HKD 696,414,000 at the end of the previous year[26] - The company paid dividends totaling HKD 276,243,000, compared to HKD 234,358,000 in the previous year, marking a 17.8% increase[26] Assets and Liabilities - The company's total assets as of June 30, 2023, were 4,106,319 thousand HKD, a decrease of about 2.8% from 4,225,279 thousand HKD at the end of 2022[23][24] - Total liabilities decreased to 366,953 thousand HKD, down 24.5% from 486,486 thousand HKD at the end of 2022[24] - Total trade receivables as of June 30, 2023, amounted to HKD 487,642,000, down 48% from HKD 943,514,000 at the end of 2022[54] - The net value of property, plant, and equipment decreased slightly to HKD 204,278,000 as of June 30, 2023, from HKD 206,681,000 at the beginning of the year[52] - Trade payables to third parties as of June 30, 2023, were HKD 85,062,000, compared to HKD 135,133,000 at the end of 2022[57] Market Presence and Strategy - The company opened a new retail outlet in Tseung Kwan O Plaza to enhance its presence in the Hong Kong retail market[10] - The company is focusing on innovative marketing strategies and expanding online and offline sales channels to increase market share[9] - The company participated in the 133rd China Import and Export Fair to strengthen its global customer base and promote key products[10] - The group plans to enhance its product pipeline and expand sales channels, focusing on the integration of traditional Chinese medicine and health products[14] - The company plans to expand its market presence through increased retail and wholesale activities in overseas regions, including Macau[38] - The company continues to invest in new product development and technology to enhance its competitive edge in the herbal medicine sector[38] Research and Development - Ongoing collaboration with international institutions for research on key product safety and efficacy[11] - The group has established a research collaboration with Hong Kong Baptist University to develop innovative Chinese medicine products[12] Employee and Management Costs - Employee costs for the period were HKD 107.1 million, up from HKD 92.8 million in 2022, reflecting the increase in workforce to 789 employees[15] - Total remuneration for key management personnel increased to HKD 3,347,000 in the first half of 2023, up from HKD 2,913,000 in 2022, representing a growth of approximately 14.8%[64] - The pension cost for the defined contribution plan rose to HKD 340,000 in the first half of 2023, compared to HKD 152,000 in the same period of 2022, marking an increase of 123.7%[64] Shareholder Information - Major shareholders include Tongrentang Technology with 318,540,000 shares, representing 38.05% of the issued share capital, and Tongrentang Group Company with 600,000,000 shares, accounting for 71.67%[68] - Tongrentang Holdings directly holds approximately 46.85% of Tongrentang Technology's issued share capital, thus deemed to own 318,540,000 shares of the company[68] - The total number of shares held by directors and key management personnel includes 430,000 shares and 43,000 shares respectively, indicating their vested interest in the company[66] Governance and Compliance - The company has established a non-competition agreement with major shareholders to prevent them from engaging in certain business activities outside mainland China without prior written consent[70] - The company is committed to evaluating new business opportunities related to restricted businesses and has established governance measures to address potential conflicts of interest[71] - The company will disclose the independent non-executive directors' review of compliance with the non-competition agreement in its annual report[71] - The company has established a Competition Executive Committee to monitor distribution channels and product offerings related to Ganoderma and its spores, conducting quarterly checks[72] - The company has adopted a risk management and internal control framework based on a "three lines of defense" model to enhance its risk management capabilities[76] - The Audit Committee has reviewed the unaudited condensed interim financial information for the six months ended June 30, 2023, with no disagreements on accounting policies between the Board and the Audit Committee[77]

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 的 內 容 概 不 負 責 ， 對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明 ， 並 明 確 表 示 概 不 就 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 依 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任 。 BEIJING TONG REN TANG CHINESE MEDICINE COMPANY LIMITED 北 京 同 仁 堂 國 藥 有 限 公 司 （ 於 香 港 註 冊 成 立 之 有 限 公 司 ） （股份代號： 3613） 2023 年中期業績公告 北京同仁堂國藥有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其附屬公 司截至 2023 年 6 月 30 日止六個月期間之未經審計業績。本公告列載本公司 2023 年中期報告 全文，乃符合香港聯合交易所有限公司（「聯交所」）證券上市規則中有關中期業績初步公 告附載的資料之要求。本公司 2023 年中期報告的印刷版本將於 2023 年 9 月 3 ...