Group 1: Stock Movements in Hong Kong Market - Youqu Holdings (02177) surged over 24% as it actively expands into the health sector with the launch of the Canadian anti-aging health food brand Vanpearl containing ergothioneine [1] - Longfly Fiber Optics (06869) rose nearly 10% following the commencement of mass production at its advanced Wuhan base, successfully producing its first 6-inch silicon carbide wafer [1] - SF Holding (06936) increased over 5% with a reported 19.1% year-on-year growth in express delivery volume in April 2025, reaching 16.32 billion parcels [1] Group 2: Notable Developments in Other Companies - Alibaba Pictures (01060) gained over 4% after announcing a name change to Damai Entertainment, indicating a focus on offline performances and IP derivatives [2] - Innovent Biologics (01801) rose over 4% after presenting promising results for its innovative drug IBI343 for treating advanced pancreatic cancer at the 2025 ASCO annual meeting [2] - Ideal Auto (02015) saw a rise of over 6% with May deliveries reaching 40,856 units, marking a 16.7% year-on-year increase [4] Group 3: U.S. Market Highlights - Ferguson (FERG.US) increased by 2.9% with Q3 sales of $7.621 billion, a 4.3% year-on-year growth, exceeding market expectations [5] - Credo Technology (CRDO.US) surged over 14% with Q4 revenue of $170.3 million, a 179.7% year-on-year increase [6] - Nvidia (NVDA.US) rose by 2.8% as UBS projected significant revenue from a new AI data center project in Texas [6]

Group 1 - As of June 3, a total of 105 stocks reached their 52-week highs, with Huayin International Holdings (00989), Dingyifeng Holdings (00612), and Youquhui Holdings (02177) leading the high rate at 57.26%, 37.93%, and 23.02% respectively [1] - The closing prices and highest prices for the top three stocks are as follows: Huayin International Holdings at 1.370 and 1.950, Dingyifeng Holdings at 0.770 and 0.800, and Youquhui Holdings at 3.550 and 3.580 [1] - Other notable stocks that reached their 52-week highs include China Antibody-B (03681) with a high rate of 21.62% and Fengcheng Holdings (02295) at 19.52% [1] Group 2 - The report also lists stocks that reached their 52-week lows, with Des Holdings (08437) showing the largest decline at -38.79%, followed by Dimi Life Holdings (01667) at -20.50% [3] - The closing prices and lowest prices for the top three stocks that reached their lows are: Des Holdings at 0.177 and 0.071, Dimi Life Holdings at 0.140 and 0.128, and Lujizhi Technology (01745) at 0.197 and 0.194 [3] - Other stocks with significant declines include GBA Group (00261) at -11.48% and Baide International (02668) at -10.88% [3]

Financial Performance - The company reported a pre-tax loss of RMB 243,111,000 for the fiscal year ending December 31, 2023, a decrease of 14.5% compared to RMB 284,158,000 in 2022[5]. - The total equity of the company decreased to RMB 192,911,000 in 2024 from RMB 295,583,000 in 2023, reflecting a decline of 34.7%[5]. - Other income and gains totaled approximately RMB 7.6 million, a decrease of about RMB 3.1 million compared to the previous year, primarily due to a reduction in government subsidies of approximately RMB 2.4 million[79]. - Research and development costs decreased to approximately RMB 94.8 million in 2024 from RMB 135.4 million in 2023, mainly due to a reduction in laboratory supplies and testing costs by approximately RMB 33.2 million[81]. - Administrative expenses totaled approximately RMB 67.7 million in 2024, down from RMB 97.6 million in 2023, primarily due to a decrease in share-based payments of approximately RMB 13.0 million[82]. - The total available funds, including cash and cash equivalents, pledged and restricted deposits, and structured deposits, decreased to RMB 141.4 million in 2024 from RMB 233.1 million in 2023, a net decrease of approximately RMB 91.7 million[86]. - The net cash used in operating activities was RMB (130.8) million in 2024, compared to RMB (133.8) million in 2023[88]. - As of December 31, 2024, the outstanding bank borrowings amounted to RMB 419.3 million, an increase from RMB 391.4 million in 2023[90]. - The actual interest rates on bank borrowings ranged from 3.15% to 3.90% in 2024, compared to 3.30% to 4.05% in 2023[90]. - The company reported a net current liability of RMB 18,161,000 and a net loss of RMB 185,141,000 for the year ending December 31, 2024[198]. Research and Development - Research and development costs for the fiscal year 2023 were RMB 135,409,000, down 25% from RMB 180,368,000 in 2022[5]. - The flagship product, Suciraslimab, has completed two major regulatory inspections and is awaiting final approval from the National Medical Products Administration for the treatment of rheumatoid arthritis[9]. - The company is actively exploring additional therapeutic applications for Suciraslimab, including its potential use in treating Alzheimer's disease[9]. - The development of SM17, a humanized monoclonal antibody targeting IL-25, is progressing significantly, with potential applications in atopic dermatitis, asthma, and other immune diseases[10]. - The company has added two new candidate drugs to its pipeline, targeting vitiligo and osteoporosis, respectively[11]. - The company aims to achieve three interrelated milestones by 2025: obtaining regulatory approval for Suciraslimab, strategic licensing or collaboration for SM17, and expanding its global footprint[12]. - SM17 demonstrated good safety and tolerability in preclinical and Phase 1 clinical trials, outperforming JAK1 inhibitors[13]. - The Phase 1b proof-of-concept study for SM17 in patients with atopic dermatitis (AD) included 32 moderate to severe patients, with the last patient visit completed on March 24, 2025[13]. - The flagship product, Suciraslimab (SM03), achieved primary endpoints in a Phase 3 clinical study for rheumatoid arthritis (RA) in China, with the Biologics License Application (BLA) accepted in September 2023[22]. - The company is actively exploring partnerships with major pharmaceutical companies to advance the development of SM17 based on strong Phase 1 data obtained in the US and China[13]. - The Phase 1 clinical trial results for SM17 were published in the journal "Frontiers in Immunology," demonstrating excellent safety, tolerability, and pharmacokinetic properties[13]. - The extended Phase III trial for Suciraslimab is expected to complete in December 2024, with results anticipated in Q3 2025[34]. - Suciraslimab's long-term efficacy data indicates sustained response rates over time, suggesting advantages over traditional biologics[34]. - SM17's preclinical studies showed efficacy comparable to JAK1 inhibitors in treating atopic dermatitis in mouse models[39]. - The company plans to advance clinical development of Suciraslimab for additional indications, including SLE and Alzheimer's-related MCI, post-commercialization[35]. - The Phase III trial for Suciraslimab demonstrated effective reduction in disease activity for RA patients[34]. - SM17's mechanism targets IL-25, potentially benefiting patients with allergic and autoimmune diseases[36]. - The IND application for asthma was submitted in May 2023 and approved on August 11, 2023, while the IND application for AD was submitted in June 2023 and approved on September 8, 2023[40]. - A bridging Phase 1a clinical trial in China is expected to complete in May 2024, assessing the safety, tolerability, and PK characteristics of SM17, which showed good tolerability and safety[40]. - The Phase 1b clinical trial for SM17 in moderate to severe AD patients commenced with 32 patients enrolled, with the last patient visit scheduled for March 24, 2025[40]. - SN1011, a third-generation reversible covalent BTK inhibitor, has shown high target selectivity and durable controllable efficacy for potential long-term treatment of SLE, pemphigus, MS, and NMOSD[42]. - The company has established a pipeline of monoclonal antibodies and new chemical entities (NCEs) to address unmet medical needs in immune diseases[21]. - The company is optimizing the CMC for SM06, a second-generation anti-CD22 antibody, which may have stronger immunomodulatory effects[44]. - The company is conducting CMC optimization and toxicology studies for an internally developed anti-γc antibody, which shows potential for treating vitiligo and other autoimmune diseases[46]. - The company has established a preclinical research platform focused on autoimmune diseases, with ongoing clinical projects generating pharmacological data for products like SM06, which is currently in the IND application stage[64]. - The company is optimizing the production and preclinical research of SM09, with plans to apply for clinical trials after completing preclinical studies[68]. Corporate Governance and Management - The management team includes experienced professionals with extensive backgrounds in the pharmaceutical industry, contributing to strategic direction and operational management[104]. - The company is focused on strategic development and governance, with a strong emphasis on independent judgment from its board members[114]. - The board includes members with extensive backgrounds in investment, research, and strategic management within the pharmaceutical sector[112]. - The company has adopted the corporate governance code and has complied with all applicable provisions during the reporting period, except for the separation of roles between the chairman and CEO[134][148]. - The company promotes a corporate culture of "ELITES," focusing on excellence, learning, innovation, talent, efficiency, and collaboration[135][136]. - The company is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[134]. - The company has a strong management team with extensive research and business management experience, leading to stable progress in drug development[137]. - The company has appointed a new company secretary effective March 31, 2023, enhancing its corporate governance structure[131]. - The board consists of ten members, including two executive directors, four non-executive directors, and four independent non-executive directors[143]. - The board believes that Dr. Liang, as the founder and CEO, has a comprehensive understanding of the company's business, supported by Mr. Wang's role as Executive Director and President (China Region) since his appointment[150]. - The board has maintained compliance with listing rules, ensuring at least three independent non-executive directors, constituting one-third of the board, with one possessing appropriate professional qualifications in accounting or related financial management[151]. - All independent non-executive directors have confirmed their independence in writing according to listing rules, ensuring effective governance and oversight[151]. - The company has established a training program for all directors, covering topics related to their responsibilities under listing rules and relevant legal obligations[158]. - The board held regular meetings throughout the year, with a minimum of four meetings planned, approximately once per quarter, to ensure effective governance[160]. - The company has a high proportion of independent directors, with two executive directors and four independent non-executive directors, ensuring a balanced decision-making process[150]. - The company has implemented a director and officer liability insurance policy, which is reviewed annually to protect against potential legal actions[155]. - The board is responsible for leading and monitoring the company, ensuring good internal controls and risk management systems are in place[154]. - The company has established clear written terms of reference for its three committees: audit, remuneration, and nomination[163]. - The audit committee is tasked with monitoring the effectiveness of risk management and internal control systems[165]. - The remuneration committee reviewed the remuneration policies for all directors and senior management, assessing performance and making recommendations for individual remuneration[172]. - The nomination committee is responsible for reviewing the composition of the board and making recommendations for the appointment of directors[177]. - The board has adopted a diversity policy, recognizing that board diversity is crucial for achieving strategic goals and sustainable development[182]. - The gender ratio at the board level is currently 1:9 (female to male), while the employee level ratio is 45:55[185]. - The board is responsible for reviewing the effectiveness of the risk management and internal control systems, which aim to manage risks associated with achieving business objectives[187]. - An independent consultant was hired to analyze and review the adequacy and effectiveness of the risk management and internal control systems during the fiscal year[188]. - The audit committee reviews the risk management policies to ensure alignment with business strategies and monitors the management's handling of significant risks[193]. - The CFO is responsible for formulating and updating risk management policies and ensuring the implementation of risk management measures across departments[193]. Market and Industry Insights - The global autoimmune disease drug market is projected to grow from $120.5 billion in 2020 to $163.8 billion by 2030, with a CAGR of 3.1%[70]. - The Chinese rheumatoid arthritis (RA) treatment market is expected to reach RMB 32.8 billion by 2024 and RMB 83.3 billion by 2030, with a CAGR of 16.8%[70]. - The biopharmaceutical market share for biologics in the Chinese RA treatment market is projected to increase from 43.4% in 2024 to 59.8% by 2030[70]. - The global asthma patient population is expected to reach approximately 860 million by 2030, with a significant increase in patients in China[72]. - The company believes that SM17, targeting the Th2 inflammatory cytokine pathway, will provide a safe and effective treatment option for atopic dermatitis (AD) and asthma[71][72]. Production and Facilities - The Suzhou production facility is expected to pass completion acceptance in early 2025, following the completion of construction by the end of 2024[17]. - The clinical site inspections and GMP checks for the Haikou production base were completed in January 2024, which are necessary for the BLA approval process[22]. - The production facility in Haikou spans approximately 19,163 square meters with a capacity of 1,200 liters, and completed GMP inspection in January 2024[52]. - The second production facility in Suzhou, covering 43,158 square meters, is expected to complete construction by the end of 2024 and pass acceptance inspection in early 2025[53]. - The company has acquired a 43,158 square meter land in Suzhou, China, for a new production facility, expected to be completed by the end of 2024[68]. Intellectual Property - The company holds 91 invention patents as of December 31, 2024, compared to 35 patents as of December 31, 2023, indicating significant growth in intellectual property[56]. - As of December 31, 2024, the company has six pending patent applications in the U.S., seven in China, and six in the EU[54].

Core Insights - China Antibody's innovative drug SM17 has shown promising results in a Phase 1b clinical trial for moderate to severe atopic dermatitis (AD), demonstrating significant advantages in itch relief, skin lesion treatment, and safety compared to existing products [1][5][6] Clinical Results - Over 90% of patients treated with high-dose SM17 achieved an NRS-4 response, while over 70% reached an EASI 75 response, and over 40% achieved an IGA 0/1 response [1][5] - No serious adverse events (SAE) or grade 3 and above drug-related adverse events were reported during the trial, indicating a favorable safety profile [4][5] Mechanism of Action - SM17 is a first-in-class humanized IgG4-κ monoclonal antibody targeting the IL-25 receptor, which plays a crucial role in the inflammatory response associated with AD [2][12] - By inhibiting IL-25 binding to its receptors, SM17 effectively reduces downstream inflammatory cytokines, promoting skin repair and reducing inflammation [2][12] Market Potential - The global atopic dermatitis drug market is projected to grow from $13.62 billion in 2023 to $31.44 billion by 2034, highlighting the significant commercial opportunity for effective treatments like SM17 [8][10] - With over 230 million AD patients worldwide, including more than 70 million in China, the demand for effective therapies is substantial [7][10] Competitive Landscape - Current treatments for AD, such as Dupilumab, have limitations, including slow onset and safety concerns, creating an unmet need that SM17 could address [10][11] - The AD treatment market is highly competitive, with a focus on innovative targets; however, SM17's unique mechanism may provide a competitive edge [10][11] Commercialization Strategy - The potential for licensing SM17 to multinational pharmaceutical companies is seen as a key pathway for commercialization, similar to recent high-value deals in the AD space [11][12] - The drug's early safety and efficacy data, along with its novel mechanism, position it as an attractive candidate for partnerships and market entry [12][13]

Financial Performance - The company reported a reduction in annual loss to RMB 185.1 million for the year ending December 31, 2024, down from RMB 243.1 million for the previous year, primarily due to reduced laboratory and trial costs [7]. - Total revenue for the year ended December 31, 2024, was RMB 2,026 million, an increase from RMB 1,365 million in 2023, representing a growth of 48.4% [116]. - Gross profit for the same period was RMB 543 million, compared to RMB 422 million in 2023, indicating a gross margin improvement [116]. - The company reported a net loss of RMB 185,141 thousand for 2024, an improvement from a net loss of RMB 243,111 thousand in 2023, reflecting a reduction of approximately 23.9% [117]. - The company's total equity decreased to RMB 192,911 thousand in 2024 from RMB 295,583 thousand in 2023, a decline of 34.7% [118]. - The basic loss per share improved to RMB (0.17) in 2024 from RMB (0.24) in 2023, indicating a positive trend in loss reduction [116]. Cash Flow and Funding - As of December 31, 2024, the total available funds, including cash and cash equivalents, amounted to RMB 141.4 million, a decrease from RMB 233.1 million as of December 31, 2023 [7]. - The net cash flow used in operating activities was RMB (130.8) million, compared to RMB (133.8) million in the previous year [82]. - The total outstanding bank borrowings increased to RMB 419.3 million as of December 31, 2024, up from RMB 391.4 million a year earlier [83]. - The group recorded a net cash flow decrease of RMB 152.0 million in cash and cash equivalents during the year [82]. - The group has pledged land use rights and construction in progress with a book value of RMB 334.3 million to secure bank loans [84]. Research and Development - The company has made significant progress in its clinical trials and pipeline development, with a Phase 3 extension trial for Suciraslimab completed in December 2024, involving 93 patients [4]. - The company has increased its patent portfolio significantly, with the number of granted and pending patents more than doubling since the beginning of the reporting period [6]. - The company initiated a Phase 1b clinical trial for treating atopic dermatitis (AD) in May 2024, with the first patient dosed on June 5, 2024 [6]. - The company aims to achieve three interrelated milestones by 2025: obtaining regulatory approval for Suciraslimab, strategic licensing or advancing SM17 collaborations, and expanding its global footprint [14]. - The company has established a robust pipeline with multiple products in various stages of clinical development, including Suciraslimab, SM17, and SN1011 [22]. Product Development and Pipeline - The flagship product, Suciraslimab, is currently undergoing the final review stage for its Biologics License Application (BLA) in China, with clinical trial site inspections completed in January 2024 [4]. - The flagship product, Suciraslimab, has successfully completed two major regulatory reviews, including clinical base review and GMP review, and is awaiting final market approval for treating rheumatoid arthritis [9]. - The product SM17, a humanized monoclonal antibody targeting IL-25, has received IND approval for asthma and atopic dermatitis (AD) in China, with a Phase 1b clinical trial for moderate to severe AD patients successfully completed [19]. - The company is actively exploring partnerships with major pharmaceutical companies to further advance the development of SM17 [11]. - The company has developed a novel asset pipeline covering preclinical, clinical, and pre-registration stages for treating various inflammatory and autoimmune diseases, aiming to maximize asset commercial value through strategic partnerships [50]. Market Outlook and Strategy - The company remains confident in the future of the Hong Kong biotech industry, supported by government policies promoting health and medical innovation [13]. - The global autoimmune disease drug market is projected to grow from $120.5 billion in 2020 to $163.8 billion by 2030, with a CAGR of 3.1% [58]. - The company aims to become a global leader in innovative therapies for immune-related diseases and other degenerative conditions [17]. - The company is focusing on developing monoclonal antibodies to address unmet medical needs in the global market [17]. - The company has established collaborations with global enterprises and research institutions to develop innovative therapies for unmet medical needs in the field of autoimmune diseases [37]. Corporate Governance and Compliance - The board confirms adherence to the corporate governance code throughout the reporting period, ensuring high standards of corporate governance [105]. - The independent auditor's report confirms that the consolidated financial statements reflect the group's financial position accurately as of December 31, 2024 [110]. - The audit committee consists of four independent non-executive directors, ensuring effective oversight of financial reporting and risk management [108]. - The financial statements for the years ending December 31, 2023, and December 31, 2024, have been submitted to the company registry as per regulations [106]. - The board believes that the combination of the roles of chairman and CEO does not impair the balance of responsibilities within the board [107].

Product Development and Clinical Trials - The flagship product Suciraslimab (SM03) is currently in the final review stage for its Biologics License Application (BLA) in China, with necessary inspections completed in January 2024[3]. - Significant progress has been made in the development of SM17, a first-in-class monoclonal antibody targeting IL-25, with successful Phase I clinical trial reports in the US and completion of a Phase Ia bridging study in China[4]. - SM17 has shown good safety and tolerability, indicating superiority over JAK1 inhibitors in these aspects[4]. - The ongoing Phase III extension trial for Suciraslimab demonstrates sustained efficacy over time, indicating long-term benefits compared to traditional biologics[4]. - The flagship product Suciraslimab (SM03) achieved primary endpoints in Phase III clinical trials for rheumatoid arthritis (RA) in China[8]. - The clinical trial for SM17 in treating AD is set to commence on June 5, 2024, with the first patient dosing[8]. - SM17's Phase I clinical trial results are expected to be reported in Q1 2024, showing good safety, tolerability, and pharmacokinetic properties[8]. - The company is advancing SM06, a second-generation anti-CD22 antibody, which is currently in the IND stage and undergoing clinical research optimization[8]. - The company is committed to expanding the therapeutic applications of Suciraslimab to address unmet medical needs in various autoimmune and neuroimmune diseases[13]. - The Phase 1b clinical trial for SM17 in AD patients has successfully dosed its first patient in June 2024, with the trial progressing as planned[15]. Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 2,026 million, compared to RMB 1,365 million for the same period in 2023, representing a year-over-year increase of 48.3%[67]. - Gross profit for the first half of 2024 was RMB 543 million, up from RMB 422 million in the first half of 2023, indicating a growth of 28.7%[67]. - The company reported a loss before tax of RMB 90,622 million for the six months ended June 30, 2024, an improvement from a loss of RMB 134,096 million in the same period of 2023, reflecting a reduction of 32.4%[67]. - The basic and diluted loss per share for the six months ended June 30, 2024, was RMB 0.08, an improvement from RMB 0.13 in the same period of 2023[53]. - The total amount of available funds as of June 30, 2024, was RMB 220.0 million, down from RMB 233.1 million as of December 31, 2023[46]. - Cash and cash equivalents decreased to RMB 153.6 million as of June 30, 2024, from RMB 203.7 million as of December 31, 2023[47]. Research and Development - The company is focused on research, development, production, and commercialization of therapies, leveraging its innovative R&D team in Hong Kong and manufacturing capabilities in China[8]. - The company has established a pipeline of monoclonal antibodies and new chemical entities targeting various immune diseases[8]. - The company has established collaborations with global enterprises and research institutions to develop innovative therapies for autoimmune diseases[18]. - The company has developed proprietary innovative technologies and therapeutic platforms to identify novel antibody candidates targeting new pathways[34]. - The company is actively exploring innovative drug targets and has a strong R&D team to foster a culture of innovation[29]. Strategic Initiatives and Partnerships - The company is strategically exploring partnerships and collaboration opportunities to accelerate the development of innovative candidates[6]. - The company aims to create significant therapeutic advancements through innovative mechanisms and models to improve immunogenicity and reduce manufacturing complexities[3]. - The company is focused on expanding its business network globally through business development activities[6]. - The company is committed to maximizing the commercial value of its assets and accelerating the development of innovative therapies for autoimmune diseases[25]. Market Outlook and Growth Potential - The global autoimmune disease drug market is projected to grow from $120.5 billion in 2020 to $163.8 billion by 2030, with a CAGR of 3.1%[30]. - The rheumatoid arthritis (RA) treatment market in China is expected to reach RMB 32.8 billion by 2024 and RMB 83.3 billion by 2030, representing a CAGR of 16.8%[30]. - The number of atopic dermatitis (AD) patients in China is projected to grow from 6.57 million in 2019 to 8.17 million by 2030, with the market value expected to increase from $600 million in 2019 to $1.5 billion by 2024 and further to $4.3 billion by 2030[32]. - The global asthma patient population is expected to reach approximately 860 million by 2030, with China's asthma patients projected to be 78.1 million[33]. Corporate Governance and Management - The company has maintained high standards of corporate governance, adhering to applicable code provisions during the reporting period[12]. - The roles of chairman and CEO are currently held by Dr. Liang Rui'an, who is also the founder, ensuring effective management and business development[13]. - The audit committee, consisting of four independent non-executive directors, has reviewed the interim report and the accounting principles adopted by the group[15]. Employee and Operational Efficiency - The company has established stock incentive and stock option plans to enhance employee engagement and retention[22]. - The total number of employees as of June 30, 2024, was 214, with employee costs amounting to approximately RMB 31.7 million during the reporting period[22]. - The company streamlined its clinical team to improve efficiency, resulting in a reduction of R&D personnel costs by approximately RMB 4.4 million[43]. Future Plans and Investments - The company plans to submit a Biologics License Application (BLA) for Suciraslimab in September 2023, with commercialization expected within 10 to 12 months if no additional data is required[8]. - The company plans to allocate approximately HKD 250.9 million for the clinical trials of its core product SMO3, with funding expected to be utilized by the end of 2024[115]. - The company is focused on diversifying its product portfolio through the discovery and development of new pipeline drugs, with ongoing funding efforts[115].

[Performance Summary](index=2&type=section&id=%E6%91%98%E8%A6%81) [Business Highlights](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) During the reporting period, the Group achieved significant progress in clinical trials and pipeline development, with flagship product Suciraslimab (SM03) nearing NMPA approval and key product SM17 advancing in clinical trials in both the US and China, while its intellectual property portfolio nearly doubled - The Biologics License Application (BLA) for flagship product **Suciraslimab (SM03)** for rheumatoid arthritis (RA) has entered the final review stage with China's National Medical Products Administration (NMPA), with necessary on-site inspections completed in January 2024[2](index=2&type=chunk) - Key product **SM17** (anti-IL-25 receptor antibody) demonstrated good safety, tolerability, and pharmacokinetic (PK) profiles in its Phase I first-in-human clinical trial in the US, with the first patient dosed in the China Phase 1b clinical trial on June 5, 2024[2](index=2&type=chunk) - The Group achieved significant intellectual property progress, with the number of authorized and pending invention patents nearly doubling by **June 30, 2024**, compared to the beginning of the reporting period, primarily due to new preclinical candidate discoveries[2](index=2&type=chunk) [Financial Highlights](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) During the reporting period, the Group's loss significantly narrowed to RMB 90.6 million, a 32.4% year-on-year reduction, primarily due to effective control over R&D and administrative expenses, and reduced exchange losses, with total available funds at period-end of RMB 220.0 million supported by net financing cash inflow Financial Performance Summary | Metric | H1 2024 (RMB million) | H1 2023 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Loss for the Period | 90.6 | 134.1 | ↓ 32.4% | | Total Available Funds (Period-end) | 220.0 | - | - | | Net Cash from Financing Activities | 93.4 | - | - | - The reduction in loss was primarily due to: (i) decreased laboratory consumables and trial costs in R&D following the acceptance of the **Suciraslimab BLA** and receipt of the **SM17 Phase I report**; (ii) a reduction of approximately **RMB 7.5 million** in share-based non-cash payments; and (iii) a decrease of approximately **RMB 17.1 million** in net exchange losses[3](index=3&type=chunk) - Completed 15 subscription agreements in **January 2024**, raising net proceeds of approximately **HKD 73.2 million**[3](index=3&type=chunk) - The Board resolved not to declare an interim dividend[3](index=3&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review and Outlook](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E5%B1%95%E6%9C%9B) The company adheres to the philosophy of discovering and developing first-in-class drugs, focusing on innovative treatments for immunological diseases, with flagship product Suciraslimab (SM03) nearing commercialization and key product SM17 making significant progress, while remaining optimistic about future profitability and shareholder value creation - The company positions itself in the new era of **Biotechnology 3.0**, focusing on drug development for prevalent diseases such as age-related conditions, autoimmune diseases, and mental health disorders[4](index=4&type=chunk) - The BLA application for flagship product **Suciraslimab (SM03)** is in the final review stage with the NMPA, with its Phase III extension trial demonstrating durable efficacy and long-term sustainable benefits[4](index=4&type=chunk) - Key product **SM17** has achieved significant progress in treating atopic dermatitis (AD), with preclinical study results published in a prestigious journal and Phase 1b clinical trials initiated[5](index=5&type=chunk) - Looking ahead, the company anticipates commercial profitability upon **Suciraslimab's** market approval and aims to confirm **SM17's** differentiated advantages over existing therapies[6](index=6&type=chunk) [Product Pipeline and Clinical Progress](index=6&type=section&id=%E7%94%A2%E5%93%81%E7%AE%A1%E7%B7%9A%E8%88%87%E8%87%A8%E5%BA%8A%E9%80%B2%E5%B1%95) The company has established a robust product pipeline focused on immunological diseases, with flagship product Suciraslimab (SM03) for RA nearing commercialization, and key products SM17 and SN1011 showing positive clinical development progress across multiple indications, complemented by preclinical-stage investigational drugs Product Pipeline Overview | Product | Target/Type | Key Indications | Latest Progress | | :--- | :--- | :--- | :--- | | **Suciraslimab (SM03)** | Anti-CD22 mAb (First-in-class) | Rheumatoid Arthritis (RA) | China BLA application in final review stage | | **SM17** | Anti-IL-25R mAb (First-in-class) | Atopic Dermatitis (AD), Asthma | US Phase I completed, China Phase 1b initiated | | **SN1011** | Third-gen BTK Inhibitor | Systemic Lupus Erythematosus (SLE), Pemphigus, etc. | 4 IND approvals from NMPA | | **SM06** | Second-gen Anti-CD22 mAb | Systemic Lupus Erythematosus (SLE), etc. | IND-enabling stage, CMC optimization | | **SM09** | Anti-CD20 mAb | Non-Hodgkin Lymphoma (NHL) | Preclinical research optimization | [Flagship Product: Suciraslimab (SM03)](index=8&type=section&id=%E8%88%92%E8%A5%BF%E5%88%A9%E5%96%AE%E6%8A%97%20(Suciraslimab%2C%20SM03)) SM03 is a first-in-class anti-CD22 monoclonal antibody for rheumatoid arthritis (RA) and other immunological diseases, with its Phase III clinical study meeting primary endpoints and BLA application accepted by the NMPA in September 2023, positioning it as the company's first potential commercialized drug following completed GMP inspections - **SM03's** BLA application for RA was accepted by the NMPA in **September 2023**, nearing commercialization, with clinical site and GMP inspections completed in **January 2024**[15](index=15&type=chunk)[8](index=8&type=chunk) - Phase III extension trial data indicate **SM03** offers durable efficacy, with response rates continuously increasing over time, demonstrating long-term sustainable benefits superior to conventional biologics[14](index=14&type=chunk) [Key Product: SM17](index=9&type=section&id=SM17) SM17 is a first-in-class humanized monoclonal antibody targeting the IL-25 receptor, with potential for treating atopic dermatitis (AD), asthma, and idiopathic pulmonary fibrosis (IPF), demonstrating good safety and PK profiles in its US Phase I trial and successfully dosing its first patient in China's Phase 1b clinical trial for AD in June 2024 - The US Phase I clinical trial report, obtained in **Q1 2024**, indicated **SM17** demonstrated good overall safety, tolerability, and PK profiles[18](index=18&type=chunk)[9](index=9&type=chunk) - China's Phase 1b clinical trial for AD completed its first patient dosing on **June 5, 2024**, aiming to explore preliminary efficacy and safety[18](index=18&type=chunk) - Preclinical study results published in **Allergy** journal demonstrated **SM17** was as effective as JAK1 inhibitors in treating mouse AD[18](index=18&type=chunk)[9](index=9&type=chunk) [Key Product: SN1011](index=10&type=section&id=SN1011) SN1011 is a third-generation reversible covalent BTK inhibitor targeting various autoimmune diseases, including systemic lupus erythematosus (SLE), pemphigus, and multiple sclerosis (MS), having shown good safety and PK profiles in its Phase I studies in Australia and China, and currently holding four IND approvals from the NMPA for different indications - **SN1011** has received **4 IND approvals** from the NMPA for the treatment of SLE, pemphigus, MS, and NMOSD, respectively[20](index=20&type=chunk)[9](index=9&type=chunk) [Manufacturing, Intellectual Property, and Collaborations](index=11&type=section&id=%E7%94%A2%E7%94%9F%E3%80%81%E7%9F%A5%E8%AD%98%E7%94%A2%E6%AC%8A%E8%88%87%E5%90%88%E4%BD%9C) The company operates a 1,200-liter capacity manufacturing facility in Haikou, which has completed GMP inspections supporting the SM03 BLA application, while a second commercial-scale facility is under construction in Suzhou, intellectual property holdings have significantly increased to 67 patents, and active collaborations with LifeArc and Everest Medicines are accelerating drug development and commercialization - The Haikou manufacturing facility completed GMP inspections in **January 2024**, supporting **SM03's BLA** approval, with the new Suzhou manufacturing base expected to pass completion acceptance in late **2024**[24](index=24&type=chunk)[25](index=25&type=chunk) Invention Patents Owned | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Number of Invention Patents Owned* | 67 | 35 | - Collaborated with UK-based **LifeArc** for the development and commercialization of **SM17**, and partnered with **Everest Medicines** to license global development rights for **SN1011** for kidney diseases[23](index=23&type=chunk) [Market Overview and Strategic Platforms](index=17&type=section&id=%E5%B8%82%E5%A0%B4%E6%A6%82%E8%A6%BD%E8%88%87%E6%88%B0%E7%95%A5%E5%B9%B3%E5%8F%B0) The company focuses on the autoimmune disease sector with significant market potential, projecting the Chinese RA market to reach RMB 83.3 billion and the global AD market USD 27.7 billion by 2030, and has established five internal strategic R&D platforms to continuously identify innovative targets and develop new drugs for competitive advantage - Broad market prospects: The Chinese RA market is projected to reach **RMB 83.3 billion** by **2030**, and the global AD market is expected to reach **USD 27.7 billion**[39](index=39&type=chunk)[40](index=40&type=chunk) - The company has established **five internal strategic R&D platforms** to support continuous drug innovation: - **B-cell Therapy Platform** (producing SM03, SM06, SM09, SN1011) - **Alarmins Pathway Therapy Platform** (producing SM17) - **Selective T-cell Therapy Platform** - **Neurological Diseases Platform** - **Antibody Framework Remodeling Humanization Platform** (for SM06, SM09)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [Financial Review](index=21&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group's financial position showed positive changes, with R&D costs decreasing 17.5% year-on-year to RMB 55.0 million and administrative expenses decreasing 31.9% year-on-year to RMB 34.2 million due to cost optimization and reduced non-cash expenses, while total available funds were RMB 220.0 million and the gearing ratio increased to 73.6% Expense Analysis | Expense Item | H1 2024 (RMB million) | H1 2023 (RMB million) | Reason for Change | | :--- | :--- | :--- | :--- | | **Research and Development Costs** | 55.0 | 66.8 | Decreased trial costs after SM03 BLA acceptance and SM17 Phase I report | | **Administrative Expenses** | 34.2 | 50.2 | Reduced share-based payments and depreciation/amortization | Liquidity and Capital Position | Liquidity and Capital | June 30, 2024 (RMB million) | December 31, 2023 (RMB million) | | :--- | :--- | :--- | | Total Available Funds | 220.0 | 233.1 | | Interest-bearing Bank Borrowings | 423.8 | 391.4 | | Gearing Ratio | 73.6% | 53.5% | - During the reporting period, net cash outflow from operating activities was **RMB 70.6 million**, net cash outflow from investing activities was **RMB 76.4 million**, and net cash inflow from financing activities was **RMB 93.4 million**[54](index=54&type=chunk) [Use of Proceeds](index=24&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The company adjusted the use of net proceeds from the global offering, reallocating HKD 15.0 million to working capital and general corporate purposes, with HKD 98.0 million of IPO proceeds remaining unutilized as of June 30, 2024, and detailed the usage of funds from 2022 and 2023 share subscriptions primarily for core product R&D and clinical studies - The Board resolved to change the use of listing proceeds, reallocating **HKD 15.0 million** to 'working capital, expansion of internal capabilities, and other general corporate purposes'[62](index=62&type=chunk) Proceeds Utilization Summary | Source of Funds | Net Proceeds (HKD million) | Used as of 2024/6/30 (HKD million) | Unused as of 2024/6/30 (HKD million) | | :--- | :--- | :--- | :--- | | Global Offering (IPO) | 1,272.8 | 1,174.8 | 98.0 | | 2022 Share Subscription | 50.9 | 38.4 | 12.5 | | 2023 Share Subscription | 73.2 | 8.4 | 64.8 | [Interim Condensed Consolidated Financial Statements](index=32&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Interim Condensed Consolidated Statement of Profit or Loss](index=32&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2024, the company recorded revenue of RMB 2.0 million and gross profit of RMB 0.5 million, with a significantly narrowed loss for the period of RMB 90.6 million compared to RMB 134.1 million in the prior year, resulting in a basic loss per share of RMB 0.08 Statement of Profit or Loss | Item (RMB thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 2,026 | 1,365 | | Gross Profit | 543 | 422 | | Research and Development Costs | (55,035) | (66,750) | | Administrative Expenses | (34,205) | (50,200) | | **Loss for the Period** | **(90,622)** | **(134,096)** | | **Loss Per Share (RMB)** | **(0.08)** | **(0.13)** | [Interim Condensed Consolidated Statement of Financial Position](index=34&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2024, the company's total assets were RMB 841.8 million, total liabilities were RMB 564.9 million, and net assets were RMB 276.9 million, with non-current assets primarily consisting of property, plant, and equipment, and liabilities mainly composed of interest-bearing bank borrowings Statement of Financial Position | Item (RMB thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | **Total Non-Current Assets** | 575,746 | 577,603 | | **Total Current Assets** | 266,056 | 270,183 | | *Of which: Cash and Cash Equivalents* | 153,617 | 203,664 | | **Total Current Liabilities** | 202,696 | 172,646 | | **Total Non-Current Liabilities** | 362,176 | 379,557 | | **Net Assets** | **276,930** | **295,583** | | **Total Equity** | **276,930** | **295,583** | [Other Information](index=30&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Corporate Governance and Dividends](index=30&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E8%88%87%E8%82%A1%E6%81%AF) The company is committed to high standards of corporate governance, applying the principles of the Corporate Governance Code despite a deviation where Dr. Liang Ruian serves as both Chairman and CEO, an arrangement the Board deems in the company's best interest, and has resolved not to declare an interim dividend for the six months ended June 30, 2024 - The company deviates from Corporate Governance Code Provision C.2.1, where the roles of Chairman and Chief Executive Officer are combined and held by Dr. Liang Ruian. The Board believes this arrangement is in the Group's best interest, given Dr. Liang's founder status and extensive business knowledge[76](index=76&type=chunk) - The Board has resolved not to declare an interim dividend for the six months ended **June 30, 2024**[78](index=78&type=chunk)[3](index=3&type=chunk) - The company's independent auditor, **Ernst & Young**, has reviewed the interim condensed consolidated financial information. The Audit Committee, in conjunction with management and the auditor, has reviewed and deemed the interim results to be in compliance with applicable accounting standards[97](index=97&type=chunk)

截至二零二三年十二月三十一日止年度,董事會組成變更如下： 董事之履歷資料載於本年報第23至30頁之「董事及管理層」一節。 主席及首席執行官 根據授權協議,本公司已於二零二一年收取初始預付款4百萬美元,並有權收取最多合共183百萬美元的發展和銷售里程 碑付款。本公司保留SN1011 腎病之自身免疫相關領域外的其他適應症的全部免疫權利,並會繼續推進其研發活動。 各獨立非執行董事已與本公司簽署委任書,初步任期為期三年並須根據細則及上市規則接受重新委任、輪值退任及廖選 連任。 委任及重遴董事 董事會應負責領導及監控本公司,並共同負責指導及監督本公司事務。 童事須向本公司披露彼等擔任的其他職務的詳情。 中國抗體製蔡有限公司 2023年年報 √ J Dylan Carlo TINKER先生 每名新委任的董事於其獲委任之初將接受正式全面的就任需知·以確保彼對本公司業務及營運有適當的了解·並完全知 悉董事在上市規則及相關法律規定下的職責及責任。 培訓類型(附註1) 附註： 2. 於二零二三年九月六日辭任 蘇州生產基地 1. 於二零二三年九月六日辭任 董事於截至二零二三年十二月三十一日止年度舉行的董事會會議及股東大會的出席記錄 ...

Financial Performance - The company reported a net loss attributable to ordinary shareholders of RMB 243,111,000 for the year, compared to a loss of RMB 284,158,000 in the previous year[25]. - There was no declaration or payment of dividends for the years ended December 31, 2023, and December 31, 2022[3]. - The company has not made adjustments to the basic loss per share for the year ended December 31, 2023, despite the potential dilution effect of unexercised share options[2]. - Losses for the year decreased by RMB 41.1 million, from RMB 284.2 million in 2022 to RMB 243.1 million in 2023, primarily due to the completion of Phase III clinical trials for SM03[68]. - Cash and cash equivalents totaled RMB 233.1 million as of December 31, 2023, down from RMB 345.7 million a year earlier[68]. - Net cash used in operating activities decreased from RMB 300.5 million in 2022 to RMB 133.8 million in 2023 due to cost-saving measures[68]. - Administrative expenses totaled approximately RMB 97.6 million for the year ended December 31, 2023, compared to RMB 82.6 million in 2022, with the increase mainly attributed to share-based payments rising by approximately RMB 15.2 million[176]. - The net cash flow used in operating activities was RMB (133.8) million for the year ended December 31, 2023, compared to RMB (300.5) million in 2022, indicating an improvement in operational cash flow[179]. - The total cash and cash equivalents at the end of the year were RMB 203.7 million, down from RMB 342.9 million at the beginning of the year, reflecting a net decrease of RMB (148.5) million[179]. - Other income and gains amounted to approximately RMB 10.7 million during the reporting period, a decrease of about RMB 44.4 million compared to the year ended December 31, 2022, mainly due to a prior year gain from the fair value of investments[194]. Share Capital and Financing - The weighted average number of ordinary shares issued during the year was 1,018,115,585 shares, an increase from 991,956,078 shares in the previous year[25]. - The total number of issued ordinary shares as of December 31, 2023, was 1,034,920,400, unchanged from the previous year[8]. - The company's overdraft financing amounted to RMB 907,555,000, up from RMB 750,000,000 in the previous year, with RMB 409,657,000 utilized by the end of the reporting period[27]. - As of the announcement date, 49,878,400 share options were granted under the 2022 share option plan, with 49,778,400 options remaining unexercised[38]. - The company plans to seek approval from the Stock Exchange for the proposed increase in the share option scheme limit, which will not exceed 10% of the total issued shares as of the date of the approval[18]. Research and Development - The company is focused on research, development, production, and commercialization of innovative therapies for immune-related diseases[67]. - The main product SM17 is a first-in-class humanized IgG4-k monoclonal antibody targeting IL-25, with potential applications in treating AD, asthma, and IPF[30]. - The company completed all patient enrollment for Phase I clinical trials of SM17 in the U.S. by September 2023, with plans to initiate Phase Ib studies for AD patients shortly[48]. - Two IND applications for asthma and AD were submitted to the National Medical Products Administration in China in May and June 2023, respectively, and were approved in August and September 2023[48]. - The flagship product SM03 (Suciraslimab) achieved primary study endpoints in the Phase III clinical trial for treating RA in China, demonstrating effective reduction of disease activity in moderate to severe RA patients[56]. - The company submitted a Biologics License Application (BLA) for Suciraslimab to the National Medical Products Administration of China in August 2023, with approval expected within 10 to 12 months post-submission[56]. - The company is developing another major product, SN1011, a third-generation reversible covalent BTK inhibitor, which has received four IND approvals from the National Medical Products Administration of China for treating SLE, pemphigus, MS, and NMOSD[58]. - The clinical trial for Suciraslimab included 530 participants, exceeding the initial target of 510, and the extended trial continues to gather data on long-term efficacy and safety[61]. - The company is focusing on the commercialization of SM03 for rheumatoid arthritis (RA) before considering the advancement of SM03 for other indications such as systemic lupus erythematosus (SLE) and Alzheimer's disease[109]. - The company is currently optimizing the chemistry, manufacturing, and controls (CMC) processes for SM06, a second-generation anti-CD22 antibody[89]. - The company is developing a preclinical research platform to study the mechanisms of autoimmune diseases and explore effective treatment methods[127]. - The internal R&D team is focusing on new mechanisms for treating various autoimmune diseases, including rheumatic diseases and skin diseases[127]. Market and Industry Outlook - The macroeconomic environment is gradually recovering to pre-pandemic levels, presenting growth opportunities for innovative drug companies in 2023[44]. - The company is optimistic about the biotechnology market in 2024, supported by favorable policies in Hong Kong for the pharmaceutical industry[73]. - The global autoimmune disease drug market is projected to grow from $120.5 billion in 2020 to $163.8 billion by 2030, with a CAGR of 6.0%[155]. - The estimated market size for rheumatoid arthritis (RA) treatment in China is expected to reach RMB 28 billion by 2023 and RMB 83.3 billion by 2030[155]. - The Chinese market for atopic dermatitis (AD) drugs was valued at $600 million in 2019 and is expected to grow to $1.5 billion by 2024 and further to $4.3 billion by 2030[134]. - The number of asthma patients globally is projected to reach approximately 86 million by 2030, with a significant increase in China, which is expected to reach 7.81 million patients[135]. Production and Facilities - The Haikou production base is the primary site for product commercialization and has supported multiple product development efforts since its completion[50]. - The Suzhou production base is steadily developing to support future research and commercialization efforts[50]. - The production base in Haikou covers an area of approximately 19,163 square meters with a capacity of 1,200 liters, sufficient for clinical and initial commercialization needs[95]. - The company is constructing a second production base in Suzhou, which will include commercial production facilities, a research center, and a quality control center, covering a total area of approximately 75,000 square meters[96]. - The company completed the GMP inspection of the Haikou production base in January 2024, which is a necessary requirement for BLA approval[95]. Strategic Initiatives - The company aims to explore potential business collaboration opportunities and expand its commercial footprint in the biotechnology market in 2024[73]. - The company aims to solidify its leading position in the immunology field through specialized research on innovative therapies for immune diseases[124]. - The company plans to actively educate existing and potential investors about product and pipeline development through non-deal roadshows[125]. - The company is enhancing its proactive strategy research and will continue to invest in new drug development while adhering to prudent principles[166]. - The company acknowledges the high risks and long development cycles associated with new drug development, which may face various challenges at different stages[142]. Intellectual Property - The company has submitted patent applications for SM18 and SM32 in the United States, along with several PCT patent applications during the reporting period[99]. - The company has received four invention patents registered in China and four in the United States for SM03 (Suciraslimab), which also applies to SM06[97]. - As of December 31, 2023, the company has a total of 35 patents, including pending and granted patents[122].

[Company Overview](index=2&type=section&id=Company%20Overview) This section provides an overview of the company's corporate information and the Chairman's report on R&D breakthroughs and future strategies [Company Information](index=2&type=section&id=Company%20Information) This section outlines SinoMab Bio-Pharmaceutical Holdings Limited's board members, key corporate roles, registered office, committees, and auditor - The company's board of directors comprises executive directors, non-executive directors, and independent non-executive directors, including Chairman and CEO Dr. Liang Rui'an[35](index=35&type=chunk) - The company has audit, remuneration, and nomination committees, and Ernst & Young is appointed as the auditor[35](index=35&type=chunk) - The company's registered office is located in Hong Kong Science Park, with stock code 3681[35](index=35&type=chunk)[62](index=62&type=chunk) [Chairman's Report](index=4&type=section&id=Chairman's%20Report) The Chairman's Report highlights H1 2023 R&D breakthroughs, including SM03's successful Phase III trial and BLA submission, SM17's progress, and plans for production capacity expansion - The company's business activities progressed orderly in H1 2023, with several R&D breakthroughs achieved[38](index=38&type=chunk) - Flagship product SM03 (Suciraslimab) met its primary endpoint in the Phase III clinical trial for RA in China, with a Biologics License Application (BLA) submitted in August 2023[40](index=40&type=chunk)[57](index=57&type=chunk) - SM17's US Phase I clinical study is expected to complete six months ahead of schedule by end of 2023, and IND applications for asthma and atopic dermatitis (AD) have been submitted to the NMPA, with the asthma IND approved[40](index=40&type=chunk) - Phase I development of the Suzhou production base has a capacity of **6,000 liters**, expected to be operational in 2024, with total capacity exceeding **36,000 liters** upon completion[40](index=40&type=chunk)[58](index=58&type=chunk) - The company aims to maximize investor value through a 'self-sustaining' model and become a global leader in innovative therapies for immune and other debilitating diseases[40](index=40&type=chunk)[49](index=49&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's business, product pipeline, R&D progress, manufacturing, commercialization strategies, and future outlook [Business Overview](index=7&type=section&id=Business%20Overview) The company is a Hong Kong-based biopharmaceutical firm focused on R&D, manufacturing, and commercialization of monoclonal antibody biologics for immune diseases - The company is the first Hong Kong-based biopharmaceutical listed company, specializing in R&D, manufacturing, and commercialization of monoclonal antibody biologics, primarily for immune diseases[25](index=25&type=chunk) - Flagship product SM03 (Suciraslimab), the world's first potential anti-CD22 monoclonal antibody for rheumatoid arthritis (RA) and other immune diseases, met its primary endpoint in China's Phase III clinical study for RA and submitted a BLA in August 2023[25](index=25&type=chunk) - Key product SM17, a first-in-class humanized monoclonal antibody targeting the IL-25 receptor, received US FDA approval for its asthma IND and is undergoing Phase I clinical trials in the US; IND applications for asthma and AD in China have also been submitted and accepted[25](index=25&type=chunk) - SN1011, a third-generation reversible covalent BTK inhibitor, has received **4 IND approvals** from the NMPA for treating SLE, pemphigus, MS, and NMOSD[25](index=25&type=chunk) [Product Pipeline and R&D Progress](index=8&type=section&id=Product%20Pipeline%20and%20R%26D%20Progress) This section details the R&D progress, mechanisms, clinical trial status, and potential indications of key pipeline products, along with the company's intellectual property strategy [SM03 (Suciraslimab)](index=9&type=section&id=SM03%20(Suciraslimab)) SM03, a potential first-in-class anti-CD22 monoclonal antibody, has achieved its primary endpoint in a Phase III RA trial in China and submitted a BLA, positioning it as the company's first commercial drug candidate - SM03 is a potential first-in-class anti-CD22 monoclonal antibody for treating RA, SLE, SS, MCI, Alzheimer's disease, and NHL[7](index=7&type=chunk) - On April 26, 2023, SM03 met its primary endpoint in the Phase III clinical study for RA in China, demonstrating effective reduction in disease activity and symptom relief[7](index=7&type=chunk) - The Phase III clinical trial completed enrollment of **530 subjects** by December 31, 2021, exceeding the target[7](index=7&type=chunk) - A BLA was submitted to the NMPA in August 2023, with commercialization approval expected within **10-12 months** post-submission[7](index=7&type=chunk) - The company plans to advance SM03's clinical development for other indications such as MCI, Alzheimer's disease, and SS, with an IND submission for MCI or Alzheimer's disease anticipated by the end of 2023[7](index=7&type=chunk) [SM17](index=9&type=section&id=SM17) SM17, a novel first-in-class humanized IgG4-k monoclonal antibody, targets the IL-25 receptor to modulate Type 2 allergic reactions, showing potential for asthma, AD, and IPF, with US Phase I trials progressing and China IND approved - SM17 is a novel, first-in-class humanized IgG4-k monoclonal antibody that targets the IL-25 receptor, modulating the Type 2 allergic reaction pathway[7](index=7&type=chunk) - In vitro studies show SM17 inhibits IL-25-induced Type 2 immunity, and animal models suggest potential benefits in asthma and AD treatment[7](index=7&type=chunk) - The IND application for asthma was approved by the US FDA in March 2022, with **77 subjects** recruited for Phase I clinical trials, expected to complete by the end of 2023[10](index=10&type=chunk) - IND applications for asthma and AD were submitted to the NMPA in May and June 2023, respectively, with the asthma IND approved in August 2023[10](index=10&type=chunk) - The company plans to initiate SM17's Phase I clinical trial in China shortly to explore its safety in the Chinese population[10](index=10&type=chunk) [SN1011](index=10&type=section&id=SN1011) SN1011, a third-generation reversible covalent BTK inhibitor, demonstrates high selectivity, durable efficacy, and good safety for rheumatic or neuro-immune diseases, with 4 NMPA IND approvals and ongoing clinical study rescheduling - SN1011 is a third-generation reversible covalent BTK inhibitor with differentiated advantages in treating diseases such as SLE, pemphigus, MS, and NMOSD[13](index=13&type=chunk) - Phase I first-in-human studies have been completed in Australia and China, showing good safety and PK characteristics[11](index=11&type=chunk) - It has received **4 IND approvals** from the NMPA, including for the treatment of SLE, pemphigus, MS, and NMOSD[11](index=11&type=chunk) - The company is rescheduling SN1011's clinical study timeline to adjust its clinical research strategy[11](index=11&type=chunk) [Other Pipeline Drugs (SM06, SM09)](index=10&type=section&id=Other%20Pipeline%20Drugs%20(SM06%2C%20SM09)) SM06 is a second-generation anti-CD22 antibody, a fully humanized variant of SM03 with enhanced immunomodulatory efficacy and lower immunogenicity for chronic immune diseases, while SM09 is a framework-reshaped anti-CD20 antibody for NHL and other autoimmune diseases - SM06 is a second-generation anti-CD22 antibody humanized using proprietary framework reshaping technology, a fully humanized variant of SM03, potentially offering stronger efficacy and weaker immunogenicity[13](index=13&type=chunk) - SM06 is suitable for treating SLE, RA, and other chronic immune diseases requiring long-term medication, and is currently undergoing CMC optimization[13](index=13&type=chunk) - SM09 is a framework-reshaped anti-CD20 antibody for treating NHL and other autoimmune diseases with significant unmet medical needs, targeting a different epitope than other anti-CD20 antibodies on the market[13](index=13&type=chunk) - The company holds Chinese and US invention patents for SM09[2](index=2&type=chunk) [Intellectual Property](index=12&type=section&id=Intellectual%20Property) The company holds multiple granted and pending invention patents for its key drugs (SM03, SN1011, SM09) and operates under the "SinoMab" brand, with a total of **32 invention patents** as of June 30, 2023 - The company holds **two granted and registered invention patents** for SM03 (Suciraslimab) in China, and **four granted and registered invention patents** in the US[2](index=2&type=chunk) - SN1011 holds **one granted and registered invention patent** in the US and **one granted and registered invention patent** in Europe[2](index=2&type=chunk) - SM09 holds **two granted and registered invention patents** in China and **three granted and registered invention patents** in the US[2](index=2&type=chunk) Group's Number of Invention Patents | Patent Item | As of June 30, 2023 | As of December 31, 2022 | | :------- | :--------------------- | :------------------------- | | Number of invention patents held by the Group * | 32 | 31 | - The company operates its business under the "SinoMab" brand and holds multiple pending trademark applications[2](index=2&type=chunk) [Manufacturing and Commercialization](index=11&type=section&id=Manufacturing%20and%20Commercialization) The company operates a production base in Haikou and is constructing a second in Suzhou to support future large-scale commercial production, while actively building market teams and seeking partnerships to enhance sales and business development [Production Bases](index=11&type=section&id=Production%20Bases) The company's Haikou production base has a **1,200-liter** capacity for clinical and initial marketing needs, while the new Suzhou base, with a Phase I capacity of **6,000 liters** expected in 2024, will boost total capacity to over **36,000 liters** upon completion - The Haikou production base has a total operating area of approximately **19,163 square meters** and a capacity of **1,200 liters**, sufficient for clinical and initial marketing needs[14](index=14&type=chunk) - The Suzhou production base is under construction, with a total floor area of approximately **75,000 square meters**, including commercial production facilities and an R&D center[14](index=14&type=chunk) - Phase I development of the Suzhou base has a capacity of **6,000 liters**, expected to be operational in 2024[14](index=14&type=chunk) - Upon completion of the Suzhou base, the maximum total capacity of both production bases will exceed **36,000 liters** (up to one million treatment courses annually)[14](index=14&type=chunk)[58](index=58&type=chunk) [Market Overview and Commercialization Strategy](index=16&type=section&id=Market%20Overview%20and%20Commercialization%20Strategy) The global autoimmune disease drug market is projected to grow, with China's RA treatment market expanding rapidly; the company leverages its two decades of R&D experience and full industry chain capabilities to precisely formulate strategies for SM03's commercial launch - The global autoimmune disease drug market size is projected to grow from **USD 120.5 billion** in 2020 to **USD 163.8 billion** in 2030, with a CAGR of **6.0%**[72](index=72&type=chunk) - China has approximately **5 million RA patients**, and its RA treatment market is expected to reach **RMB 28.0 billion** by 2023 and **RMB 83.3 billion** by 2030[72](index=72&type=chunk)[87](index=87&type=chunk) - The company possesses full industry chain capabilities integrating R&D, manufacturing, and commercialization, with over two decades of experience in autoimmune diseases[87](index=87&type=chunk) - The successful launch of SM03 will be a significant milestone for the Group, and the company will precisely formulate R&D and sales strategies based on its first-mover and safety advantages[87](index=87&type=chunk) - The company is establishing its market team and plans continuous expansion to cover most provinces and cities in China, actively seeking cooperation opportunities[85](index=85&type=chunk) [R&D Platforms](index=16&type=section&id=R%26D%20Platforms) The company has established multiple innovative drug target identification and therapeutic platforms, including humanized antibody, B-cell therapy, alarmin pathway therapy, selective T-cell therapy, and neurological disease platforms, to support novel antibody development and treatment of various immune diseases - The company possesses innovative technologies and therapeutic platforms capable of launching novel antibody candidates targeting new targets[72](index=72&type=chunk) - **Humanized Antibody Platform:** Employs a novel "framework reshaping" method to humanize mouse antibodies without affecting affinity and specificity, as used for SM06 and SM09[92](index=92&type=chunk) - **B-cell Therapy Platform:** Focuses on developing B-cell targeting therapeutics, including anti-CD22 antibodies (SM03, SM06), anti-CD20 antibodies (SM09), and BTK inhibitors (SN1011)[92](index=92&type=chunk) - **Alarmin Pathway Therapy Platform:** Targets upstream alarmins in immune pathways, such as IL-25, under which SM17 was developed[92](index=92&type=chunk) - **Selective T-cell Therapy Platform:** Aims to isolate antibodies that selectively bind to T-cell related receptors, covering a wide range of immune diseases[92](index=92&type=chunk) - **Neurological Disease Platform:** Investigates the potential of anti-CD22 antibodies (e.g., SM03/SM06) for treating degenerative neurological diseases such as MCI and Alzheimer's disease[92](index=92&type=chunk) [Future and Outlook](index=14&type=section&id=Future%20and%20Outlook) The company aims to be a global leader in innovative therapies for immune and other debilitating diseases, continuing SM03's clinical trials and commercialization, expanding its neuro-immune indications, accelerating SM17's R&D, and enhancing investor communication - The company's vision is to become a global leader in innovative therapies for immune and other debilitating diseases[81](index=81&type=chunk) - It will continue to advance SM03 (Suciraslimab) clinical trials for RA and other autoimmune diseases, having already submitted a BLA for RA treatment[82](index=82&type=chunk) - Plans include IND applications and proof-of-concept studies for MCI or Alzheimer's disease, and initiating IND applications and Phase II proof-of-concept clinical studies for SS in China, further expanding SM03's therapeutic areas[82](index=82&type=chunk) - SM17's US Phase I clinical trial results are expected six months ahead of schedule, and Phase I clinical trials will commence in China, followed by proof-of-concept studies[69](index=69&type=chunk) - The company will advance SM06's initial IND application process to develop better biologics and explore other immune diseases with unmet medical needs[69](index=69&type=chunk) - The company will actively educate existing and potential investors on product and pipeline development through non-deal roadshows and other means[67](index=67&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) This section reviews the company's key financial indicators, cash flow, liquidity, bank borrowings, assets and liabilities, and loss per share for the reporting period [Key Financial Indicators](index=18&type=section&id=Key%20Financial%20Indicators) In H1 2023, the company's net other income and gains slightly decreased, R&D costs significantly reduced due to SM03 Phase III trial completion and team streamlining, while administrative expenses increased due to higher share-based payment expenses - Total other income and gains were **RMB 7.2 million**, a decrease of approximately **RMB 0.7 million** from H1 2022, primarily due to reduced bank interest income partially offset by increased government grants[74](index=74&type=chunk) - R&D costs were **RMB 66.8 million**, a decrease of approximately **RMB 15.3 million** from **RMB 82.1 million** in H1 2022, mainly due to reduced laboratory consumables and trial costs following SM03 Phase III clinical trial completion, and lower R&D personnel employment costs and milestone payments[75](index=75&type=chunk)[94](index=94&type=chunk) - Total administrative expenses were **RMB 50.2 million**, an increase of approximately **RMB 16.4 million** from **RMB 33.8 million** in H1 2022, primarily due to an increase of approximately **RMB 10.3 million** in non-cash share-based payment expenses and higher depreciation and amortization[76](index=76&type=chunk)[95](index=95&type=chunk) - Net other expenses were **RMB 21.5 million**, a decrease from **RMB 30.4 million** in H1 2022, mainly attributable to net exchange losses[204](index=204&type=chunk) [Cash Flow and Liquidity](index=19&type=section&id=Cash%20Flow%20and%20Liquidity) The company maintains a prudent treasury management policy and stable liquidity; net decrease in cash and cash equivalents in H1 2023 was mainly due to capital expenditure for the Suzhou production base and operating cash outflows, partially offset by financing cash inflows and exchange rate changes - The company adopts a prudent treasury management policy, maintaining a stable liquidity position and sufficient standby bank facilities[77](index=77&type=chunk) - As of June 30, 2023, cash and cash equivalents and structured deposits totaled **RMB 286.5 million**, a decrease of approximately **RMB 59.2 million** from **RMB 345.7 million** as of December 31, 2022[113](index=113&type=chunk) - The net decrease in cash and cash equivalents was primarily due to capital expenditure for the Suzhou commercial production base (approximately **RMB 61.3 million**) and net cash outflow from operating activities (approximately **RMB 62.8 million**)[113](index=113&type=chunk) - This decrease was partially offset by net cash inflow from financing activities (approximately **RMB 42.0 million**) and the net effect of changes in foreign exchange rates (approximately **RMB 19.1 million**)[113](index=113&type=chunk) Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | | :--- | :------------------------ | :------------------------ | | Net cash flows used in operating activities | (62,750) | (145,587) | | Net cash flows used in investing activities | (61,942) | (101,687) | | Net cash flows from financing activities | 42,044 | 20,905 | | Net decrease in cash and cash equivalents | (82,648) | (226,369) | | Cash and cash equivalents at end of period | 282,210 | 367,387 | [Bank Borrowings and Assets & Liabilities](index=20&type=section&id=Bank%20Borrowings%20and%20Assets%20%26%20Liabilities) As of June 30, 2023, the company's outstanding bank borrowings increased, and it maintained floating cash levels to monitor capital, with land use rights pledged as collateral for bank loans - As of June 30, 2023, outstanding bank borrowings were **RMB 331.9 million**, an increase from **RMB 268.8 million** as of December 31, 2022[117](index=117&type=chunk) - Bank borrowings are denominated in RMB and bear interest at a fixed annual rate of **3.30%** and variable rates[117](index=117&type=chunk) - The company had unutilized bank facilities of approximately **RMB 423.5 million**[99](index=99&type=chunk) - As of June 30, 2023, land use rights with a net book value of approximately **RMB 14.7 million** were pledged as collateral for bank loans[127](index=127&type=chunk) - The company maintained floating cash levels during the reporting period to monitor its gearing ratio[118](index=118&type=chunk) [Loss Per Share](index=20&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2023, the company's basic and diluted loss per share was **RMB 0.13**, an improvement from **RMB 0.15** in the prior year period - For the six months ended June 30, 2023, basic and diluted loss per share was **RMB 0.13**, a decrease from **RMB 0.15** in the corresponding period of 2022[121](index=121&type=chunk) - Loss per share is calculated based on the consolidated loss attributable to ordinary equity holders of the parent company of **RMB 134,096,000** and the weighted average number of ordinary shares outstanding of **1,017,964,900** during the period[217](index=217&type=chunk) [Interim Condensed Consolidated Financial Statements](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the independent review report and the interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows [Independent Review Report](index=22&type=section&id=Independent%20Review%20Report) Ernst & Young reviewed SinoMab Bio-Pharmaceutical Holdings Limited's interim financial information for the six months ended June 30, 2023, finding no matters suggesting it was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - Ernst & Young conducted a review, not an audit, of the interim financial information, and therefore did not express an audit opinion[145](index=145&type=chunk) - The review concluded that nothing came to their attention to suggest the interim financial information was not prepared in accordance with Hong Kong Accounting Standard 34[134](index=134&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2023, the company reported revenue of **RMB 1,365 thousand** and gross profit of **RMB 422 thousand**, with a loss for the period of **RMB 134,096 thousand**, narrowing from **RMB 143,790 thousand** in the prior year period Summary of Interim Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | Change | | :--- | :------------------------ | :------------------------ | :--- | | Revenue | 1,365 | - | Increase | | Cost of sales | (943) | - | Increase | | Gross profit | 422 | - | Increase | | Net other income and gains | 7,155 | 7,903 | Decrease | | Research and development costs | (66,750) | (82,131) | Decrease | | Administrative expenses | (50,200) | (33,849) | Increase | | Net other expenses | (21,521) | (30,382) | Decrease | | Finance costs | (3,202) | (2,140) | Increase | | Loss before tax | (134,096) | (143,790) | Decrease | | Loss for the period | (134,096) | (143,790) | Decrease | | Basic and diluted loss per share (RMB) | 0.13 | 0.15 | Decrease | [Interim Condensed Consolidated Statement of Comprehensive Income](index=24&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2023, the company's total comprehensive loss for the period was **RMB 113,902 thousand**, a slight increase from **RMB 111,472 thousand** in the prior year period, primarily due to exchange differences on translation of presentation currency Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | Change | | :--- | :------------------------ | :------------------------ | :--- | | Loss for the period | (134,096) | (143,790) | Decrease | | Exchange differences on translation of presentation currency | 20,194 | 32,318 | Decrease | | Total comprehensive loss for the period | (113,902) | (111,472) | Increase | [Interim Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the company's total assets were **RMB 907,389 thousand** and net assets were **RMB 406,138 thousand**, a decrease from December 31, 2022, primarily due to a reduction in net current assets Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | Change | | :--- | :------------------------- | :-------------------------- | :--- | | Total non-current assets | 563,866 | 561,255 | Increase | | Total current assets | 343,523 | 447,093 | Decrease | | Total current liabilities | 174,841 | 187,391 | Decrease | | Net current assets | 168,682 | 259,702 | Decrease | | Total assets less current liabilities | 732,548 | 820,957 | Decrease | | Total non-current liabilities | 326,410 | 311,382 | Increase | | Net assets | 406,138 | 509,575 | Decrease | | Total equity | 406,138 | 509,575 | Decrease | [Interim Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2023, the company's total equity decreased from **RMB 509,575 thousand** at the beginning of the period to **RMB 406,138 thousand**, mainly due to a loss of **RMB 134,096 thousand**, partially offset by exchange differences on translation of presentation currency and equity-settled share-based payment expenses Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | As of January 1, 2023 (RMB thousands) | As of June 30, 2023 (RMB thousands) | Change | | :--- | :------------------------ | :------------------------ | :--- | | Total equity (beginning of period) | 509,575 | - | - | | Loss for the period | (134,096) | (134,096) | - | | Exchange differences on translation of presentation currency | - | 20,194 | Increase | | Equity-settled share-based payment expenses | - | 10,465 | Increase | | Total equity (end of period) | - | 406,138 | Decrease | [Interim Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2023, the company's net decrease in cash and cash equivalents was **RMB 82,648 thousand**, primarily due to cash outflows from operating and investing activities, partially offset by cash inflows from financing activities Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | Change | | :--- | :------------------------ | :------------------------ | :--- | | Net cash flows used in operating activities | (62,750) | (145,587) | Decrease outflow | | Net cash flows used in investing activities | (61,942) | (101,687) | Decrease outflow | | Net cash flows from financing activities | 42,044 | 20,905 | Increase inflow | | Net decrease in cash and cash equivalents | (82,648) | (226,369) | Decrease outflow | | Cash and cash equivalents at end of period | 282,210 | 367,387 | Decrease | [Notes to the Interim Condensed Consolidated Financial Information](index=30&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section details the basis of preparation, changes in accounting policies, operating segment information, revenue analysis, other expenses, income tax, dividends, property, plant and equipment, financial assets, cash and cash equivalents, interest-bearing bank borrowings, share capital, commitments, related party transactions, and fair value of financial instruments [Basis of Preparation and Changes in Accounting Policies](index=30&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 and incorporates first-time adoption of several revised HKFRSs, including amendments on accounting policy disclosure, definition of accounting estimates, deferred tax, and international tax reform - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34[169](index=169&type=chunk) - The company first adopted HKFRS 17 (Insurance Contracts), and amendments to HKAS 1 (Disclosure of Accounting Policies), HKAS 8 (Definition of Accounting Estimates), and HKAS 12 (Deferred Tax) were applied[183](index=183&type=chunk) - Amendments to HKAS 1 require disclosure of material accounting policy information, expected to impact accounting policy disclosures in annual consolidated financial statements[183](index=183&type=chunk) - Amendments to HKAS 8 clarify the distinction between changes in accounting estimates and changes in accounting policies, with no impact on financial position or performance[200](index=200&type=chunk) - Amendments to HKAS 12 regarding deferred tax arising from a single transaction had no impact on the interim condensed consolidated financial information[185](index=185&type=chunk)[200](index=200&type=chunk) - Amendments to HKAS 12 regarding international tax reform (Pillar Two Model Rules) introduced a mandatory temporary exemption, which had no impact on the Group[201](index=201&type=chunk) [Operating Segment Information](index=32&type=section&id=Operating%20Segment%20Information) The company's management monitors the Group's overall operating results, with all revenue derived from mainland China and non-current assets primarily located in mainland China and Hong Kong - Management monitors the Group's overall operating results to make decisions on resource allocation and performance assessment[188](index=188&type=chunk) - All external customer revenue is derived from mainland China[189](index=189&type=chunk) Geographical Distribution of Non-current Assets | Region | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Mainland China | 556,686 | 552,362 | | Hong Kong | 5,953 | 6,888 | | Total | 562,639 | 559,250 | [Revenue Analysis](index=32&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2023, the company's revenue was **RMB 1,365 thousand**, entirely from capsule sales, recognized in mainland China upon transfer of goods at a point in time Revenue from Contracts with Customers | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | | :--- | :------------------------ | :------------------------ | | Revenue from contracts with customers | 1,365 | - | - All revenue is derived from capsule sales and recognized in mainland China[204](index=204&type=chunk) - Revenue recognition occurs at a point in time when goods are transferred[204](index=204&type=chunk) - Revenue is from the sale of BTK inhibitor capsules under a sales agreement with Everest Medicines II (HK) Limited[212](index=212&type=chunk) [Net Other Expenses](index=33&type=section&id=Net%20Other%20Expenses) For the six months ended June 30, 2023, net other expenses totaled **RMB 21,521 thousand**, primarily comprising net exchange losses of **RMB 19,974 thousand** and other expenses of **RMB 1,547 thousand** Details of Net Other Expenses | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | | :--- | :------------------------ | :------------------------ | | Net exchange losses | 19,974 | 29,546 | | Others | 1,547 | 836 | | Total | 21,521 | 30,382 | [Income Tax](index=34&type=section&id=Income%20Tax) For the six months ended June 30, 2023, neither the company nor its Chinese subsidiaries generated assessable profits, thus no provision for Hong Kong profits tax or PRC enterprise income tax was made - The company did not generate assessable profits during the period, so no Hong Kong profits tax was provided[215](index=215&type=chunk) - Chinese subsidiaries have an estimated tax rate of **25%**, but no estimated assessable profits were generated during the period, so no PRC enterprise income tax provision was made[206](index=206&type=chunk) [Dividends](index=34&type=section&id=Dividends) For the six months ended June 30, 2023 and 2022, the company's board of directors did not pay or declare any dividends - The company's board of directors did not pay or declare any dividends for the six months ended June 30, 2023 and 2022[217](index=217&type=chunk) [Property, Plant and Equipment](index=34&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2023, the company's additions to property, plant and equipment amounted to **RMB 57,086 thousand**, primarily for the Suzhou commercial production base - For the six months ended June 30, 2023, additions to property, plant and equipment amounted to **RMB 57,086 thousand** (at cost), a significant increase from **RMB 29,326 thousand** in the corresponding period of 2022[218](index=218&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=34&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2023, the company held financial assets at fair value through profit or loss totaling **RMB 31,619 thousand**, primarily representing unlisted equity investments in D2M Financial Assets at Fair Value Through Profit or Loss | Indicator | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Unlisted equity investments, at fair value | 31,619 | 30,476 | - This asset refers to the Group's **7.29%** Series A1 preferred share investment in D2M Biotherapeutics Limited[209](index=209&type=chunk) [Cash and Cash Equivalents](index=35&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2023, the company's total cash and cash equivalents were **RMB 286,463 thousand**, primarily denominated in RMB, including restricted bank balances designated for construction projects Details of Cash and Cash Equivalents | Indicator | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Cash and bank balances | 153,934 | 141,174 | | Time deposits | 132,529 | 204,538 | | Total | 286,463 | 345,712 | - Cash and cash equivalents are primarily denominated in RMB (**RMB 257,446 thousand**), USD (**RMB 11,263 thousand**), and HKD (**RMB 17,348 thousand**)[265](index=265&type=chunk) - This includes restricted bank balances of **RMB 4,253 thousand** designated for construction projects[265](index=265&type=chunk) [Interest-bearing Bank Borrowings](index=36&type=section&id=Interest-bearing%20Bank%20Borrowings) As of June 30, 2023, the company's total interest-bearing bank borrowings amounted to **RMB 331,917 thousand**, comprising non-current and current portions, with some borrowings secured by land use rights Details of Interest-bearing Bank Borrowings | Indicator | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Non-current bank borrowings | 270,530 | 238,358 | | Current bank borrowings | 61,387 | 30,421 | | Total | 331,917 | 268,779 | - Bank loans have repayment periods distributed within one year, the second year, and the third to fifth years[266](index=266&type=chunk) - Some bank loans are secured by land use rights with a net book value of approximately **RMB 14,685 thousand**[266](index=266&type=chunk) [Share Capital](index=36&type=section&id=Share%20Capital) As of June 30, 2023, the company's issued and fully paid ordinary shares totaled **1,034,920,400**, with a share capital amount of **RMB 1,725,211 thousand**, consistent with December 31, 2022 Share Capital Information | Indicator | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Issued and fully paid ordinary shares (1,034,920,400 shares) | 1,725,211 | 1,725,211 | - There were no changes in the company's share capital during the reporting period[120](index=120&type=chunk) [Commitments and Related Party Transactions](index=37&type=section&id=Commitments%20and%20Related%20Party%20Transactions) As of June 30, 2023, the company had contracted but unprovided capital commitments of **RMB 133,458 thousand**, engaged in long-term lease payment transactions with a related party (Haikou Pharmaceutical Factory Co., Ltd.), and saw an increase in total key management personnel compensation Capital Commitments | Item | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Contracted but not provided for · Buildings · Plant and machinery | 133,458 | 162,013 | - Long-term lease payments with related party Haikou Pharmaceutical Factory Co., Ltd. amounted to **RMB 11,845 thousand** during the period[282](index=282&type=chunk) Outstanding Balances with Related Parties | Item | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Other payables and accrued expenses: Haikou Pharmaceutical Factory Co., Ltd. | 787 | 1,179 | | Prepayments: Haikou Pharmaceutical Factory Co., Ltd. | 1,250 | 417 | | Lease liabilities: Haikou Pharmaceutical Factory Co., Ltd. | 62,368 | 72,652 | Total Key Management Personnel Compensation | Item | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | | :--- | :------------------------ | :------------------------ | | Salaries · allowances and benefits in kind | 8,307 | 6,963 | | Equity-settled share-based payment expenses | 4,854 | - | | Pension scheme contributions | 88 | 119 | | Total key management personnel compensation paid | 13,249 | 7,082 | [Financial Instruments by Category](index=38&type=section&id=Financial%20Instruments%20by%20Category) As of June 30, 2023, the company's total financial assets amounted to **RMB 320,688 thousand**, and total financial liabilities amounted to **RMB 493,384 thousand** Financial Assets by Category | Financial Asset Category | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Cash and cash equivalents | 286,463 | 345,712 | | Financial assets at fair value through profit or loss | 31,619 | 30,476 | | Financial assets included in prepayments, deposits and other receivables | 2,606 | 6,381 | | **Total Financial Assets** | **320,688** | **382,569** | Financial Liabilities by Category | Financial Liability Category | As of June 30, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :------------------------- | :-------------------------- | | Interest-bearing bank borrowings | 331,917 | 268,779 | | Financial liabilities included in other payables and accrued expenses | 92,538 | 127,796 | | Lease liabilities | 68,929 | 88,404 | | **Total Financial Liabilities** | **493,384** | **484,979** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=40&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The carrying amounts of all the company's financial instruments approximate their fair values, with fair value measurements categorized into a hierarchy, and unlisted equity investments estimated based on recent Series A financing transaction prices - The carrying amounts of all the Group's financial instruments approximate their fair values[291](index=291&type=chunk) - Fair value measurements of financial instruments are categorized into three levels, with no transfers between Level 1 and Level 2, or into or out of Level 3 during the period[248](index=248&type=chunk) - The fair value of unlisted equity investments is estimated based on recent transaction prices from Series A financing[258](index=258&type=chunk) - The company invests in structured deposits and foreign exchange contracts, with their fair values measured through financial institution estimates or valuation techniques[301](index=301&type=chunk) [Other Information](index=42&type=section&id=Other%20Information) This section covers the use of proceeds from listing and share subscriptions, share incentive schemes, directors' and substantial shareholders' interests, changes in directors' information, securities transactions, corporate governance, and confirmation of no material changes [Use of Proceeds from Listing](index=42&type=section&id=Use%20of%20Proceeds%20from%20Listing) The company's net proceeds from listing were **HKD 1,272.8 million**, primarily allocated to R&D, commercialization, team expansion, and production base construction; as of June 30, 2023, most funds were utilized as planned, with **HKD 183.1 million** remaining unutilized - Net proceeds from listing amounted to **HKD 1,272.8 million**[237](index=237&type=chunk) Use of Proceeds from Listing and Utilization | Use of Proceeds | Planned Use (HKD millions) | Actual Use as of June 30, 2023 (HKD millions) | Net Unutilized Proceeds (HKD millions) | | :--- | :------------------------ | :--------------------------------------- | :------------------------------ | | R&D and commercialization of core product SM03 | 250.9 | 225.8 | 25.1 | | Other pipeline drugs | 299.4 | 288.5 | 10.9 | | Further R&D projects, R&D team expansion, commercialization team establishment, etc. | 52.4 | 52.3 | 0.1 | | Discovery and development of new pipeline drugs not currently in pipeline | 99.9 | 89.4 | 10.5 | | Construction of Suzhou production base | 85.8 | 48.4 | 37.4 | | Purchase of laboratory equipment | 59.7 | 9.9 | 49.8 | | Construction of additional R&D facilities and purchase of laboratory equipment | 87.6 | 87.2 | 0.4 | | Construction of upstream production facilities and downstream purification facilities | 28.2 | 6.7 | 21.5 | | Purchase of land in Suzhou Dushu Lake Higher Education Zone and related expenses | 117.9 | 98.9 | 19.0 | | Working capital, expansion of internal capabilities, and other general corporate purposes | 152.2 | 143.8 | 8.4 | | Collaboration with D2M Group | 38.8 | 38.8 | – | | **Total** | **1,272.8** | **1,089.7** | **183.1** | - The expected timetable for unutilized net proceeds is based on the Group's best estimates and may change due to future developments[305](index=305&type=chunk) [Share Subscription and Use of Proceeds](index=43&type=section&id=Share%20Subscription%20and%20Use%20of%20Proceeds) In November 2022, the company issued **28,680,000 new ordinary shares**, raising net proceeds of approximately **HKD 50,890,400**, primarily for R&D and commercialization of SM03, advancing R&D projects, expanding R&D and commercialization teams, and general working capital - On November 16, 2022, the company completed the issuance of **28,680,000 new ordinary shares**, raising net proceeds of approximately **HKD 50,890,400**[307](index=307&type=chunk) - The subscription price was **HKD 1.78 per share**, representing a discount of approximately **0.56%** to the average closing price for the five trading days preceding the subscription agreement date[307](index=307&type=chunk) Use of Proceeds from Share Subscription and Utilization | Intended Use of Proceeds | Planned Use (HKD millions) | Actual Use as of June 30, 2023 (HKD millions) | Net Unutilized Proceeds (HKD millions) | | :--- | :------------------------ | :--------------------------------------- | :------------------------------ | | R&D and commercialization of pipeline drugs (SM03) | 39.6 | 25.0 | 14.6 | | Further R&D projects, R&D team expansion, commercialization team establishment, etc. (SN1011 R&D) | 0.2 | 0.2 | - | | Further R&D projects, R&D team expansion, commercialization team establishment, etc. (Funding R&D team expansion) | 4.0 | - | 4.0 | | Further R&D projects, R&D team expansion, commercialization team establishment, etc. (Establishing commercialization team, etc.) | 2.0 | - | 2.0 | | General working capital purposes | 5.1 | 2.3 | 2.8 | | **Total** | **50.9** | **27.5** | **23.4** | [Share Incentive Schemes](index=45&type=section&id=Share%20Incentive%20Schemes) The company maintains three share incentive schemes (Restricted Share Unit Scheme, Share Award Scheme, and Share Option Scheme) to incentivize and retain talent; the Restricted Share Unit Scheme terminated in March 2023, while the Share Award Scheme and Share Option Scheme remain in effect with available shares for grant - The company maintains a Restricted Share Unit Scheme (terminated on March 20, 2023), a Share Award Scheme, and a Share Option Scheme[339](index=339&type=chunk) - The Restricted Share Unit Scheme aimed to incentivize employees, with **26,111,996 restricted share units** granted and vested to Mr. Qiang Jing on December 14, 2021[324](index=324&type=chunk) - The Share Award Scheme aims to incentivize directors, senior management, employees, and consultants, with a maximum of **50,312,020 award shares** over the entire scheme period[348](index=348&type=chunk) - As of the end of the reporting period, **16,955,500 award shares** were available for grant under the Share Award Scheme[348](index=348&type=chunk) - The 2022 Share Option Scheme aims to provide opportunities to acquire ownership interests in the company, with an authorized limit of **50,312,020 shares**[330](index=330&type=chunk) Details of Outstanding Share Options (as of June 30, 2023) | Category of Participants | Date of Grant | Number of Outstanding Share Options | | :--- | :--- | :--- | | Employees | November 3, 2022 | 25,156,000 | [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=49&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2023, Ms. Liu Wanyi and Dr. Liang Rui'an, as directors and chief executives, held interests in the company's shares Directors' and Chief Executive's Interests in Shares | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Liu Wanyi | Interest of controlled corporation and spouse's interest | 285,703,036 | 27.61% | | Dr. Liang Rui'an | Interest of controlled corporation | 129,729,200 | 12.54% | - All interests are long positions[367](index=367&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=50&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2023, the company's substantial shareholders, including Mr. Qiang Jing, Shanghai Xingze Investment Management Co., Ltd., and Hainan Haiyao Co., Ltd., held various interests in the company's shares Substantial Shareholders' Interests in Shares | Name of Shareholder/Entity | Capacity/Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Qiang Jing | Beneficial interest, interest of controlled corporation and spouse's interest | 285,703,036 | 27.61% | | Shanghai Xingze Investment Management Co., Ltd. | Interest of controlled corporation | 212,879,400 | 20.57% | | Shanghai Yueyi Investment Center (Limited Partnership) | Interest of controlled corporation | 212,879,400 | 20.57% | | Hainan Haiyao Co., Ltd. | Beneficial interest | 158,882,115 | 15.35% | | Skytech Technology | Beneficial interest | 129,729,200 | 12.54% | | Apricot Oversea Holdings Limited | Beneficial interest | 108,306,600 | 10.47% | | Ms. Xu Sijia | Beneficial interest | 89,802,105 | 8.68% | | West Biolake Holdings Limited | Beneficial interest | 72,339,000 | 6.99% | | China CITIC Bank Corporation Limited Haikou Branch | Person with security interest in shares | 158,882,115 | 15.35% | - All interests are long positions[359](index=359&type=chunk) - China CITIC Bank holds a security interest over **158,882,115 shares** owned by Hainan Haiyao[228](index=228&type=chunk) - Haikou Rural Credit Cooperative Union holds a security interest over **51,000,000 shares** owned by Ms. Xu Sijia[238](index=238&type=chunk) [Changes in Directors' Information](index=52&type=section&id=Changes%20in%20Directors'%20Information) During the reporting period, Ms. Liu Jie, a non-executive director, ceased to serve as Deputy General Manager and Chief R&D Engineer of Hainan Haiyao Co., Ltd - Non-executive Director Ms. Liu Jie ceased to serve as Deputy General Manager and Chief R&D Engineer of Hainan Haiyao Co., Ltd., effective January 11, 2023[361](index=361&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=52&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[229](index=229&type=chunk) [Standard Code for Securities Transactions by Directors](index=52&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Standard Code as a code of conduct for securities transactions by directors and relevant employees; all directors confirmed compliance with this code during the reporting period - The company has adopted the Standard Code as a code of conduct for securities transactions by directors[362](index=362&type=chunk) - All directors confirmed compliance with the said code of conduct during the reporting period[381](index=381&type=chunk) - The company also adopted written guidelines for securities transactions by relevant employees, with no non-compliance found[372](index=372&type=chunk) [Corporate Governance](index=53&type=section&id=Corporate%20Governance) The company is committed to high standards of corporate governance and has applied the Corporate Governance Code; the roles of Chairman and CEO are held by the same person (Dr. Liang Rui'an), an arrangement the company believes is in the Group's best interest, with a balanced board of directors, and the Audit Committee has reviewed the interim report - The company has applied the principles and code provisions set out in the Corporate Governance Code[373](index=373&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Dr. Liang Rui'an, which deviates from code provision C.2.1[232](index=232&type=chunk)[374](index=374&type=chunk) - The Board believes this arrangement is in the Group's best interest, as Dr. Liang possesses extensive business knowledge, and the Board's high independent component ensures a balance of power and authority[383](index=383&type=chunk) - The Audit Committee, together with management and external auditors, has reviewed the accounting principles and policies adopted by the Group, audit and internal control, and financial reporting matters, including the unaudited condensed consolidated financial statements in this interim report[234](index=234&type=chunk)[241](index=241&type=chunk) [No Material Changes](index=53&type=section&id=No%20Material%20Changes) Except as disclosed in this interim report, there were no material changes affecting the company's performance requiring disclosure under paragraph 46 of Appendix 16 to the Listing Rules during the reporting period - During the reporting period, there were no material changes affecting the company's performance requiring disclosure under paragraph 46 of Appendix 16 to the Listing Rules[233](index=233&type=chunk) [Definitions](index=54&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used throughout the report to ensure consistent understanding for readers [Definition of Terms](index=54&type=section&id=Definition%20of%20Terms) This section provides definitions for key terms and abbreviations used throughout the report to ensure consistent understanding for readers - Definitions are provided for terms such as "Audit Committee," "Board," "Corporate Governance Code," "Company," "Directors," "US FDA," "Group," "HKFRSs," "HKD," "Listing Rules," "Standard Code," "NMPA," "Nomination Committee," "PRC," "Prospectus," "R&D," "Remuneration Committee," "Reporting Period," "RMB," "Restricted Share Unit," "Restricted Share Unit Scheme," "SFO," "Shares," "Shareholders," "Skytech Technology," "Stock Exchange," "Subsidiaries," "US," "we," "Xingze Xinghe," and "Xingze Xingzhan"[385](index=385&type=chunk)[386](index=386&type=chunk)