Financial Performance - The company's revenue for 2023 was RMB 44,840,000, compared to RMB 25,363,000 in 2022, representing a significant increase of 76.8%[5] - The basic earnings per share for 2023 was RMB 162,775,000, up from RMB 106,387,000 in 2022, indicating a growth of 53.0%[13] - The pre-tax profit for the group was RMB 831,669,000, up from RMB 753,640,000 in the previous year, reflecting an increase of 10.3%[26] - Profit attributable to the owners of the parent company rose by approximately 53.0% to RMB 162.8 million[40] - The net profit attributable to the parent company increased by 53.0% to RMB 162.8 million, with a net profit margin of 7.9% compared to 5.8% in the previous year[68] - The company reported a net profit of RMB 164,134 thousand for the year, up from RMB 106,915 thousand in the previous year[123] Income and Expenses - The total income tax expense for 2023 was RMB 43,447,000, compared to RMB 23,736,000 in 2022, reflecting an increase of 83.2%[7] - Selling and distribution expenses increased by approximately 9.7% to RMB 888.2 million, maintaining a stable ratio of approximately 43.3% of revenue[64] - Administrative expenses rose by approximately 1.8% to RMB 106.7 million, mainly due to depreciation expenses related to the retail pharmacy headquarters[66] - Research and development costs increased to RMB 49,982,000 from RMB 46,350,000, representing a growth of 5.6%[26] - Research and development expenses increased by approximately 7.8% to RMB 50.0 million, driven by direct investments and collaborative R&D costs[67] Dividends - The company declared an interim dividend of 6 HKD cents per share for 2023, compared to 0 in 2022, marking a return to dividend payments[9] - The proposed final dividend for the year ending December 31, 2023, is HKD 0.03 per share, down from HKD 0.06 in 2022, with a special dividend of zero, down from HKD 0.03 in 2022[101] - The company declared a total dividend of HKD 0.09 per share, unchanged from the previous year, despite a reduction in the final dividend[115] Assets and Liabilities - The total assets as of December 31, 2023, amounted to RMB 2,102,148 thousand, compared to RMB 1,875,257 thousand in 2022[129] - The total liabilities decreased to RMB 1,048,815 thousand from RMB 1,069,308 thousand in the previous year, indicating improved financial stability[129] - The total lease liabilities as of December 31, 2023, were RMB 124,845,000, a decrease from RMB 134,829,000 in 2022, showing a reduction of 7.3%[17] - Trade payables amounted to RMB 140,766 thousand, down from RMB 149,226 thousand in the previous year[37] - Trade receivables were RMB 195,894 thousand, with a net amount of RMB 192,033 thousand after impairment[52] - Inventory value increased to RMB 330,017 thousand from RMB 322,901 thousand year-on-year[51] Revenue Segmentation - Revenue from the pharmaceutical segment grew by 25.3% to RMB 1,415.7 million, accounting for 69.1% of total revenue[54] - Revenue from the retail pharmacy segment decreased by 8.9% to RMB 634.1 million, representing 30.9% of total revenue[55] - For the fiscal year ending December 31, 2023, the total revenue from external customers for the pharmaceutical segment was RMB 1,415,663,000, while the retail pharmacy segment generated RMB 634,149,000, leading to a total revenue of RMB 2,746,036,000[165] Operational Developments - The company plans to accelerate the construction of a new pharmaceutical plant and ensure a smooth transition of production capacity between old and new facilities[22] - The company aims to enhance its core product development and introduce new products to support growth over the next 30 years[21] - The group operates 428 self-operated retail pharmacies in Guangdong Province as of December 31, 2023[55] - The group aims to enhance the influence of traditional Chinese medicine products and accelerate new retail development[44] Financial Reporting and Compliance - Financial statements are prepared in accordance with International Financial Reporting Standards, ensuring compliance with relevant regulations[137] - The group has adopted new and revised International Financial Reporting Standards this year, with no significant impact on the financial statements[146] - The audit committee has reviewed the group's accounting principles and financial statements during the year[92] Employee and Compensation - As of December 31, 2023, the group employed 2,643 employees, a decrease from 2,883 employees in 2022, with total compensation amounting to RMB 323.9 million, down from RMB 332.4 million in 2022[79] - The group has adopted a competitive remuneration policy for directors to attract and retain qualified individuals to achieve strategic goals[82] Future Outlook - The group anticipates continued growth in demand for traditional Chinese medicine, driven by increasing public health awareness post-COVID-19[84] - The company aims to strengthen its traditional Chinese medicine tablet business by building a complete industry chain from seed cultivation to processing[107]

Financial Performance - The group reported a revenue of RMB 1,094,328,000 for the six months ended June 30, 2023, compared to RMB 846,397,000 for the same period in 2022, representing a growth of approximately 29.3%[14]. - The pre-tax profit for the group was RMB 167,819,000 for the six months ended June 30, 2023[8]. - The total revenue for the six months ended June 30, 2023, was approximately RMB 1,094.3 million, representing a 29.3% increase compared to RMB 846.4 million in the same period last year[77]. - The group recorded a profit attributable to equity holders of approximately RMB 134.9 million, a 75.1% increase from RMB 77.0 million in the same period of 2022[104]. - Basic earnings per share were RMB 0.159 for the six months ended June 30, 2023, an increase of approximately 75.1% from RMB 0.091 in the same period of 2022[86][92]. - The company reported a profit of RMB 136,152,000 for the six months ended June 30, 2023, representing an increase of 75.4% compared to RMB 77,539,000 for the same period in 2022[183]. - Total comprehensive income for the period was RMB 136,332,000, up from RMB 76,620,000 in the previous year, marking a growth of 78.1%[183]. Revenue Breakdown - Revenue from external customers amounted to RMB 846,397,000, with RMB 536,773,000 from the pharmaceutical segment and RMB 309,624,000 from the retail pharmacy chain segment[9]. - Revenue from the pharmaceutical segment increased by approximately 43.9% to RMB 772.6 million, accounting for 70.6% of total revenue, up from 63.4% in the same period last year[114]. - Revenue from the retail pharmacy segment increased by 3.9% to RMB 321.7 million, accounting for 29.4% of total revenue, down from 36.6% in the same period last year[116]. Profitability Metrics - The gross profit for the pharmaceutical segment increased by 47.2% to RMB 541.8 million, with a gross profit margin of 70.1%, up from 68.6% in the previous year[95]. - The group's gross profit was RMB 675.0 million, an increase of 33.6% from RMB 505.2 million in the same period last year[117]. - The net profit margin for the period was 12.3%, up from 9.2% in the same period last year[121]. Expenses and Liabilities - Selling and distribution expenses were approximately RMB 445.0 million, an increase of about 27.1% from RMB 350.0 million in the same period last year, representing 40.7% of revenue[120]. - The group’s total liabilities decreased from RMB 409,093,000 as of December 31, 2022, to RMB 279,949,000 as of June 30, 2023, indicating a reduction of approximately 31.5%[38]. - Administrative expenses increased by approximately 9.2% to RMB 53.7 million, primarily due to increased depreciation from the completion of the Yunfu factory project[145]. Assets and Investments - The group’s total assets less current liabilities amounted to RMB 1,195,354,000 as of June 30, 2023, compared to RMB 1,144,006,000 at the end of 2022[186]. - The total non-current assets increased to RMB 845,370,000 in the first half of 2023 from RMB 784,337,000 in the previous year, reflecting a growth of 7.8%[197]. - The group’s strategic investments in equity investments increased to RMB 39,668,000 as of June 30, 2023, compared to RMB 10,676,000 as of December 31, 2022[53]. Cash Flow and Financing - The company had cash and bank balances totaling approximately RMB 241.8 million as of June 30, 2023, compared to RMB 359.7 million as of December 31, 2022[146]. - The company has unutilized bank financing of RMB 119.0 million as of June 30, 2023, unchanged from December 31, 2022[147]. - Operating cash flow for the first half of 2023 was RMB 71,517,000, down 31.5% from RMB 104,223,000 in the first half of 2022[194]. Strategic Initiatives - The group plans to implement new strategies to enhance market expansion and product development, although specific details were not disclosed in the provided content[42]. - The company plans to expand its production capacity for traditional Chinese medicine to capture market share as demand continues to grow[133]. - The group has actively expanded its online business and franchise stores in response to decreased foot traffic post-pandemic[88]. Operational Developments - The group has expanded its chain of pharmacies to 433 self-operated stores in Guangdong Province as of June 30, 2023, up from 397 stores a year earlier[94]. - The group is constructing a new production base to meet the capacity expansion needs of its subsidiary, with civil engineering expected to be completed by the end of the year[87].

Share Incentive and Option Plans - The company has a total of 2,177,000 shares potentially to be issued under the share incentive plan, representing 0.25% of the weighted average number of shares issued during the year[5]. - As of December 31, 2022, the remaining term of the share incentive plan is four years[7]. - The company has not issued or allocated any new shares to the trustee under the share incentive plan as of the announcement date[8]. - The maximum number of options that can be granted to any participant under the share option plan is capped at 1% of the total issued shares, unless otherwise approved by shareholders[9]. - The total number of options available for grant under the share option plan as of January 1, 2022, and December 31, 2022, is 80,000,000[25]. - The share incentive plan is designed to recognize and encourage contributions from eligible participants to the growth and development of the group[18]. - The company has no intention to issue and allocate new shares to the trustee in the future[8]. - The share option plan is valid for a period of ten years from the date of adoption, subject to early termination by the board[21]. - The company has not issued any reward shares under the share incentive plan prior to December 31, 2022[15]. - The total number of securities available for issuance under the share option plan is 80,000,000 shares, accounting for approximately 9.26% of the company's issued shares[37]. - The share option plan has a validity period of ten years from the adoption date, with a remaining effective period of three years as of December 31, 2022[39]. - Under the share reward plan, the cumulative rewards granted to participants, including share options, must not exceed 1% of the company's issued shares within a 12-month period[43]. - The vesting period for share options granted under the share option plan is not less than 12 months[38]. - The share reward plan and share option plan are designed to incentivize employees, directors, and other contributors to the company's growth and development[36]. - No share options have been granted, exercised, canceled, or lapsed under the share option plan since the company's listing[35]. - The company will provide additional information regarding the share option plan and share reward plan in its annual report as per the listing rules[30]. - The share reward plan aims to align the interests of participants with the company's performance and growth[41]. - The share option plan includes participants such as employees, directors, suppliers, and other contributors to the company's development[36]. Financial Performance and Guidance - The company has not disclosed any specific financial performance metrics or future guidance in the provided content[40].

Financial Performance - The company's revenue for the six months ended June 30, 2023, was approximately RMB 1,094.3 million, representing a growth of 29.3% compared to RMB 846.4 million for the same period in 2022[4]. - Gross profit for the same period was approximately RMB 675.0 million, with a gross margin of about 61.7%, an increase of 2 percentage points from the previous year[4]. - Profit attributable to equity holders of the parent company was approximately RMB 134.9 million, reflecting a significant increase of 75.1% compared to RMB 77.0 million in the prior year[4]. - Basic earnings per share for the period were approximately RMB 0.159, up 75.1% from RMB 0.091 in the same period last year[6]. - The company reported a pre-tax profit of RMB 167.8 million for the period, compared to RMB 95.4 million in the previous year[7]. - The company reported a net profit before tax of RMB 167,819,000 for the six months ended June 30, 2023, compared to RMB 95,414,000 for the same period in 2022, indicating an increase of approximately 75.6%[32]. - The company recognized government grants related to income of RMB 3,938,000 for the six months ended June 30, 2023, compared to RMB 4,213,000 for the same period in 2022[34]. - The total tax expense for the six months ended June 30, 2023, was RMB 31,667,000, compared to RMB 17,875,000 for the same period in 2022, reflecting an increase of approximately 76.9%[45]. - Other income and gains amounted to approximately RMB 25.1 million for the six months ended June 30, 2023, up from RMB 12.5 million in the same period last year, primarily due to increased interest income[143]. Dividends and Shareholder Returns - The board proposed an interim dividend of HKD 0.06 per share for the six months ended June 30, 2023, compared to no interim dividend in the previous year[4]. - The board proposed an interim dividend of HKD 0.06 per share, totaling approximately HKD 51,816,000, pending shareholder approval on November 2, 2023[46]. - The group proposed an interim dividend of HKD 0.06 per share, totaling approximately HKD 51.8 million, subject to approval at the special general meeting on October 13, 2023[152]. Assets and Liabilities - The total assets as of June 30, 2023, amounted to RMB 1,195.4 million, an increase from RMB 1,144.0 million as of December 31, 2022[10]. - Current assets totaled RMB 939.5 million, down from RMB 1,090.9 million at the end of the previous year[10]. - Current liabilities were RMB 589.5 million, a decrease from RMB 731.3 million as of December 31, 2022[10]. - The company’s total equity as of June 30, 2023, was RMB 279,949 thousand, down from RMB 409,093 thousand as of December 31, 2022, representing a decline of 31.5%[79]. - The group reported total liabilities of RMB 167,710 thousand as of June 30, 2023, down from RMB 189,779 thousand at the end of 2022, reflecting a reduction of 11.6%[79]. - The group’s total trade receivables and notes receivable reached RMB 328,984,000, compared to RMB 311,561,000 in the previous year[54]. - The fair value of investment properties as of June 30, 2023, was estimated at RMB 53,624,000[51]. - The carrying value of investment properties increased to RMB 46,482,000 as of June 30, 2023, from RMB 44,884,000 as of December 31, 2022, representing a growth of approximately 3.6%[59]. Operational Segments - The company is primarily engaged in the manufacturing and sales of pharmaceutical products and operates chain pharmacies in China[20]. - The company has two reportable operating segments: pharmaceutical and retail pharmacy[28]. - The pharmaceutical segment generated revenue of RMB 772,597,000, while the retail pharmacy segment contributed RMB 321,731,000 for the six months ended June 30, 2023[32]. - Revenue from the chain pharmacy segment increased by 3.9% to RMB 321.7 million for the six months ended June 30, 2023, compared to RMB 309.6 million for the same period in 2022, accounting for 29.4% of total revenue[122]. - The pharmaceutical segment's revenue grew by 43.9% to RMB 772.6 million for the six months ended June 30, 2023, compared to RMB 536.8 million for the same period in 2022, representing 70.6% of total revenue[130]. Expenses and Costs - Sales and distribution expenses amounted to approximately RMB 445.0 million for the six months ended June 30, 2023, a 27.1% increase from RMB 350.0 million for the same period in 2022[134]. - Research and development expenses for the six months ended June 30, 2023, were RMB 20,551,000, up from RMB 17,981,000 in 2022, indicating an increase of about 8.7%[187]. - Advertising, marketing, and promotional expenses reached RMB 295,960,000 for the six months ended June 30, 2023, compared to RMB 212,329,000 in the previous year, reflecting a significant rise of approximately 39.2%[187]. - The cost of goods sold amounted to RMB 419,365,000, an increase from RMB 341,214,000 in the same period of 2022, representing a growth of approximately 22.9%[187]. - The depreciation of property, plant, and equipment, as well as investment properties, was RMB 25,971,000 for the six months ended June 30, 2023, compared to RMB 22,705,000 in 2022, marking an increase of approximately 14.9%[187]. - Employee benefits expenses, including director remuneration, totaled RMB 141,411,000 for the six months ended June 30, 2023, compared to RMB 134,396,000 in 2022, showing an increase of approximately 5.5%[187]. Market and Growth Strategy - The company aims to maintain its competitive edge through ongoing investments in new product development and market expansion strategies[32]. - The group plans to build a new production facility to meet the capacity expansion needs of its subsidiary, with construction having commenced in April 2023[127]. - The group anticipates a significant market opportunity for traditional Chinese medicine following the end of pandemic control measures, despite short-term challenges related to raw material price increases[126]. - The company plans to expand its market presence and invest in new product development as part of its growth strategy[84]. - The company plans to expand its production capacity for traditional Chinese medicine in response to the steady growth in demand, particularly with the construction of the Hengsheng factory[156]. Governance and Compliance - The financial data for the six months ended June 30, 2023, was prepared in accordance with the Hong Kong Stock Exchange Listing Rules and International Accounting Standards[22]. - The accounting policies adopted for the interim financial data are consistent with those followed for the annual consolidated financial statements for the year ended December 31, 2022[23]. - The company has implemented new and revised International Financial Reporting Standards effective from January 1, 2023, which are expected to impact the annual consolidated financial statements[25]. - The interim financial data does not include all the information and disclosures required for annual financial statements[22]. - The company has adhered to corporate governance practices and standards throughout the reporting period[176]. Employee and Talent Management - The total number of employees as of June 30, 2023, was 2,834, with total remuneration amounting to RMB 141.4 million[155]. - The share incentive plan has been increased from 1% to 2.5% of the issued share capital to attract and retain talent[85]. - The company’s management compensation for the six months ended June 30, 2023, was RMB 5,445 thousand, reflecting a slight increase from RMB 5,347 thousand in the previous year[93]. Other Information - The company has not identified any significant changes in its main business during the year[20]. - The company has no contingent liabilities as of June 30, 2023, consistent with the previous year[159]. - There were no significant acquisitions or disposals of subsidiaries, joint ventures, or associates during the reporting period[158]. - There were no significant events after the reporting period up to the date of this announcement[168].

Financial Performance - The group's annual gross profit was RMB 1,072.3 million, an increase of RMB 10.9 million or 1.0% compared to RMB 1,061.4 million for the year ended December 31, 2021[1]. - Profit attributable to equity holders of the parent company increased by 104.1% to RMB 106.4 million for the year ended December 31, 2022, with a net profit margin of 5.8% compared to 3.0% in the previous year[5]. - The group's revenue increased by approximately 4.5% to about RMB 1,825.9 million for the year ended December 31, 2022[93]. - Revenue from pharmaceutical operations grew by approximately 7.3% to RMB 1,129.9 million, accounting for 61.9% of total revenue[71]. - The operation of chain pharmacies contributed RMB 696.0 million in revenue, showing a slight increase of 0.4% year-on-year[95]. - The pharmaceutical segment generated revenue of RMB 1,129.9 million, reflecting a growth of 7.3% compared to the previous year[95]. Cost and Expenses - Administrative expenses were approximately RMB 104.7 million, an increase of about 1.8% from RMB 102.9 million in the previous year, primarily due to increased depreciation and office expenses[3]. - Financing costs for the year ended December 31, 2022, were RMB 6.6 million, down from RMB 7.1 million in the previous year, mainly due to a reduction in bank borrowings[4]. - Selling and distribution expenses were approximately RMB 809.8 million for the year ended December 31, 2022, a decrease of about 2.3% from RMB 829.2 million in 2021, with the ratio to revenue decreasing to approximately 44.4% from 47.5% in 2021[134]. - Research and development expenses increased by approximately 5.7% to RMB 46.4 million for the year ended December 31, 2022, compared to RMB 43.8 million in 2021, primarily due to increased direct R&D investments[135]. - Income tax expenses for the year ended December 31, 2022, were RMB 23.7 million, up from RMB 9.4 million in 2021, mainly due to an increase in profit before tax[136]. Assets and Liabilities - As of December 31, 2022, the net current assets of the group were approximately RMB 359.7 million, with cash and bank balances increasing to RMB 381.0 million[82]. - The group's debt ratio decreased to 3.6% as of December 31, 2022, down from 6.4% the previous year[107]. - As of December 31, 2022, the equity attributable to shareholders was approximately RMB 1,005.9 million, compared to RMB 901.2 million as of December 31, 2021[138]. - The company has no contingent liabilities as of December 31, 2022, consistent with the previous year[117]. - As of December 31, 2022, the company's distributable reserves amounted to RMB 140.3 million, which includes share premium and retained earnings, indicating the ability to meet upcoming debt obligations[198]. Corporate Governance - The company has adhered to the principles outlined in the corporate governance code and complied with all applicable code provisions as of December 31, 2022[29]. - The board of directors is responsible for leading and monitoring the company, overseeing business strategies and performance[30]. - The audit committee was established on June 8, 2015, and its scope of authority includes reviewing financial statements and monitoring the group's risk management and internal control systems[37]. - The board consists of four executive directors, two non-executive directors, and three independent non-executive directors, with independent directors accounting for over one-third of the board[45]. - The company has established three committees: the audit committee, the remuneration committee, and the nomination committee to oversee specific areas of the company's affairs[54]. - The company received written confirmations regarding the independence of all independent non-executive directors during the reporting period[51]. - The board monitors the company's strategic development and sets appropriate risk management policies in line with the group's strategic objectives[46]. - The company has a continuous professional development program for its directors, ensuring they remain updated on relevant industry practices[32]. - The audit committee comprises three members, all of whom are independent non-executive directors, ensuring unbiased oversight of financial reporting[37]. - The company has implemented a comprehensive management structure to ensure effective governance and operational success[30]. Operational Developments - The number of self-operated chain pharmacies in Guangdong Province increased to 429 from 398 in the previous year[72]. - The group plans to expand into new retail businesses and enhance online sales following regulatory changes[68]. - The group aims to strengthen the quality assurance system for traditional Chinese medicine throughout the entire supply chain[67]. - The group will continue to design and construct modern factories to establish new growth points for the future[67]. - The company has completed the land bidding for a new factory in Zhongshan, Guangdong Province, to expand production capacity in response to rising product demand[116]. - The new factory in Guangdong is intended for the production of traditional Chinese medicine products to meet increasing market demand[116]. - The company has adjusted its operational strategy to control expenses and expand business in a challenging environment[93]. Supplier and Customer Relations - The company emphasizes strong collaboration with suppliers to effectively meet customer demands, ensuring a transparent and fair procurement process[190]. - The average business relationship with major suppliers exceeds six years, covering various regions in Northern, Central, and Southern China[191]. - Sales to the top five customers accounted for less than 30% of total sales during the reporting period, suggesting a diversified customer base[199]. - The average credit term for major wholesale customers is generally no more than three months, while new customers are typically required to make advance payments[192]. Future Outlook - The group will consider any potential investment opportunities that may benefit shareholders[15]. - The company has no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period[146]. - There are no significant future plans for major investments or capital assets disclosed in the report[147]. - The company has not utilized any forward contracts or other methods to hedge foreign currency risks as of 2022, but will review and adjust its hedging and financing strategies based on currency fluctuations[142].

Dividends - The board proposed a final dividend of HKD 0.06 per share and a special dividend of HKD 0.03 per share for the year ending December 31, 2022, subject to shareholder approval at the annual general meeting on May 18, 2023[1]. - The total proposed dividends amount to HKD 68,009,000, with HKD 45,339,000 for the final dividend and HKD 22,670,000 for the special dividend[14]. - The company declared a total dividend of HKD 0.09 per share, which includes a special dividend of HKD 0.03[27]. - The group will pay dividends in Hong Kong dollars in the future, and any significant fluctuations in the exchange rate may impact financial results[187]. Financial Performance - The group's revenue for the year ended December 31, 2022, was RMB 1,825,935 thousand, representing a 4.5% increase from RMB 1,746,500 thousand in 2021[27]. - Gross profit for the same period was RMB 1,072,295 thousand, with a gross margin of 58.7%, down from 60.8% in the previous year[27]. - Net profit attributable to equity holders was RMB 106,387 thousand, a significant increase of 104.1% compared to RMB 52,128 thousand in 2021[27]. - The pre-tax profit for the group was RMB 332,371,000, a decrease of 3.1% compared to RMB 343,093,000 in 2021[10]. - The total comprehensive income for the year was RMB 104,764 thousand, compared to RMB 53,147 thousand in 2021[31]. - The income tax expense for the year was RMB 23,736 thousand, compared to RMB 9,447 thousand in 2021[34]. - The group reported other income and gains of RMB 33,700 thousand, up from RMB 29,771 thousand in the previous year[34]. - The group reported external customer revenue of RMB 717,950,000 for the segment, with inter-segment sales amounting to RMB 1,129,905,000[70]. - Total revenue for the group reached RMB 1,825,935,000, with a pre-tax profit of RMB 130,651,000[70]. Research and Development - The group's research and development costs for the year amounted to RMB 46,350,000, up from RMB 43,834,000 in 2021, reflecting a growth of 3.7%[10]. - Research and development expenses increased to approximately RMB 46.4 million, up about 5.7% from 43.8 million in the previous year[152]. Assets and Liabilities - The company's total assets increased to RMB 1,005,949 thousand from RMB 901,165 thousand in the previous year[37]. - Non-current assets total RMB 784,337 thousand, an increase from RMB 666,668 thousand year-on-year[49]. - Current assets amount to RMB 1,090,920 thousand, up from RMB 857,437 thousand compared to the previous year[49]. - Total liabilities increased to RMB 731,251 thousand from RMB 500,831 thousand year-on-year[49]. - The group reported a net asset value of RMB 359,669 thousand, slightly up from RMB 356,606 thousand year-on-year[49]. - As of December 31, 2022, the equity attributable to shareholders was approximately RMB 1,005.9 million, compared to RMB 901.2 million the previous year[182]. Expenses - The group incurred sales and distribution expenses of RMB 829,237,000, alongside administrative expenses of RMB 104,746,000[71]. - Selling and distribution expenses decreased by approximately 2.3% to RMB 809.8 million, representing about 44.4% of revenue[178]. - Administrative expenses increased by approximately 1.8% to RMB 104.7 million due to increased depreciation and office expenses[178]. - The company's financing costs for the year were RMB 7,080,000, which is a part of the overall administrative expenses totaling RMB 102,899,000[86]. Customer and Credit Management - The company has no single customer contributing more than 10% of total sales revenue, indicating a diversified customer base[84]. - The company maintains strict control over its trade receivables, with overdue balances regularly reviewed by senior management to mitigate credit risk[132]. - The expected credit loss rate for the year was 1.69%, with total expected credit losses amounting to RMB 3,387 thousand[136]. - The company has no significant credit concentration risk due to a diverse customer base with a good historical record, ensuring a low expected credit loss rate for trade receivables and notes receivable[132]. Future Outlook - Future outlook includes continued focus on expanding market presence and enhancing product offerings, although specific numerical guidance was not provided in the call[117]. - The group believes that existing financial resources and funds from business operations will provide sufficient capital for future expansion plans[184]. Compliance and Governance - The group has adopted and complied with the corporate governance code as per the listing rules during the reporting period[194]. - The financial statements are prepared in accordance with International Financial Reporting Standards and reflect historical cost conventions[52]. Changes in Operations - The group operates primarily in the manufacturing and sales of pharmaceutical products in China[51]. - The group has not undergone any significant changes in its main activities during the year[51]. - The group has restructured its internal organization, resulting in a change in reportable segments, now comprising pharmaceutical and retail pharmacy operations[66].

Financial Performance - Total revenue for the six months ended June 30, 2022, was approximately RMB 846.4 million, a decrease of about 4.5% compared to RMB 886.7 million in the same period of 2021[8]. - Profit for the period was approximately RMB 77.5 million, an increase of about 16.5% compared to RMB 66.5 million in the same period of 2021[9]. - Basic earnings per share were RMB 0.091, an increase of approximately 12.3% compared to RMB 0.081 in the same period of 2021[10]. - The total revenue for the group was approximately RMB 846.4 million, a decrease of about 4.5% compared to RMB 886.7 million in the same period last year[18]. - The profit for the period was approximately RMB 77.5 million, an increase of about 16.5% from RMB 66.5 million in the same period last year[19]. - Basic earnings per share increased to RMB 0.091, up approximately 12.3% from RMB 0.081 in the same period last year[20]. - Gross profit for the group was RMB 505.2 million, a decrease of about 7.4% from RMB 545.8 million in the same period last year[26]. - The gross profit margin for the pharmaceutical segment decreased to 68.6%, down from 74.3% in the same period last year[28]. - The company reported a total comprehensive income of RMB 76,620 thousand for the period, compared to RMB 67,145 thousand in the previous year, reflecting an increase of 14.6%[68]. - The total comprehensive income for the six months ended June 30, 2022, was RMB 76,129,000, compared to RMB 67,189,000 for the same period in 2021, representing an increase of approximately 9.4%[72]. Revenue Breakdown - Revenue from the pharmaceutical segment grew by approximately 0.2% to RMB 536.8 million, accounting for 63.4% of total revenue[23]. - Revenue from the operation of chain pharmacies decreased by approximately 11.8% to RMB 309.6 million, representing 36.6% of total revenue[25]. - For the six months ended June 30, 2022, total revenue was RMB 846,397,000, with pharmaceutical segment revenue at RMB 536,773,000 and retail pharmacy operations at RMB 309,624,000[96]. - The gross profit for the pharmaceutical segment was RMB 368,024,000, while the retail pharmacy operations reported a gross profit of RMB 137,159,000, leading to a total gross profit of RMB 505,183,000[96]. Operational Developments - The company focused on core business segments, reducing investment in non-core areas, which led to improved market coverage and growth in the traditional Chinese medicine sector[12]. - The company’s Yunfu factory passed the GMP compliance inspection and began operations for various traditional Chinese medicine products, enhancing overall development in the sector[12]. - The chain pharmacy segment faced challenges due to the pandemic, leading to changes in consumer purchasing habits and an increase in online sales[13]. - The new intelligent logistics center has been established to improve operational efficiency and support the rapid expansion of the chain pharmacy business[13]. - The company aims to accelerate store expansion in Zhongshan and explore new business opportunities in the pharmacy sector[13]. Financial Position - The net current assets of the group were approximately RMB 443.5 million, an increase from RMB 356.6 million as of December 31 of the previous year[36]. - As of June 30, 2022, the company's debt ratio (loans to total equity) was 4.9%, down from 6.4% as of December 31, 2021[37]. - The company had available undrawn bank financing of RMB 71.8 million as of June 30, 2022, compared to RMB 87.3 million as of December 31, 2021[37]. - The total assets as of June 30, 2022, amounted to RMB 1,097,633 thousand, an increase from RMB 1,023,274 thousand at the end of 2021[69]. - Current liabilities decreased to RMB 461,790 thousand from RMB 500,831 thousand, showing a reduction of 7.9%[69]. - Non-current assets totaled RMB 654,139 thousand, slightly down from RMB 666,668 thousand at the end of the previous year[69]. - The company’s total equity as of June 30, 2022, was RMB 977,555,000, up from RMB 885,128,000 as of June 30, 2021, marking an increase of approximately 10.4%[72]. Cash Flow and Investments - The cash flow from operating activities for the six months ended June 30, 2022, was RMB 90,376,000, significantly up from RMB 26,423,000 in the previous year, indicating a growth of over 242%[78]. - The cash flow from operating activities before tax for the six months ended June 30, 2022, was RMB 137,783,000, compared to RMB 121,484,000 in the prior year, showing an increase of approximately 13.5%[78]. - The net cash flow used in investing activities was RMB (36,766,000), compared to RMB (27,628,000) in the previous year, indicating a decline in cash flow of approximately 33.1%[80]. - The cash flow from financing activities showed a net outflow of RMB (32,524,000), a significant increase from RMB (3,467,000) in the previous year, reflecting a change of approximately 837.5%[80]. - The company reported a decrease in the purchase of property, plant, and equipment to RMB (38,379,000) from RMB (81,038,000), a reduction of approximately 52.7%[80]. Shareholder and Governance - The company expresses gratitude to shareholders, customers, suppliers, and employees for their continued support and aims to create greater value moving forward[14]. - The company has adhered to corporate governance practices as outlined in the relevant regulations[57]. - The major shareholder, Mr. Lai, holds a total of 523,832,000 ordinary shares, representing approximately 60.66% of the company's issued share capital[157]. - The company has disclosed that Mr. Lai has a beneficial interest in 10,487,000 shares and 471,105,000 shares held by a controlled corporation[157]. - The board has confirmed that all disclosures regarding shareholdings and interests comply with the Securities and Futures Ordinance[162]. Employee Compensation and Costs - The total employee compensation for the reporting period was RMB 134.4 million, down from RMB 155.5 million for the same period in 2021[45]. - The total remuneration for key management personnel for the six months ended June 30, 2022, was RMB 5,347,000, slightly down from RMB 5,418,000 in the previous year[151]. Research and Development - Research and development costs for the six months ended June 30, 2022, were RMB 17,981,000, a decrease of 19.8% from RMB 22,291,000 in 2021[108].

Business Strategy and Development - In 2021, the company focused on the core development strategy of breaking wall herbal medicine, increasing investment in chain pharmacy business, and improving market share in Zhongshan[9] - The company plans to ensure healthy and high-quality sustainable development in 2022 while continuously monitoring external environments for opportunities[10] - The new factory in Yunfu was completed and commenced production in October 2021, aiming to meet market demand for traditional and new herbal products[11] - The new chain headquarters and intelligent logistics center in Zhongshan are expected to enhance operational efficiency and support rapid expansion[12] - The management is committed to enhancing existing operations and addressing the increasing market demand for the group's products to enhance shareholder value[50] - The company is focused on expanding its market presence through strategic partnerships and product development initiatives[67] Financial Performance - The company's revenue increased by approximately 8.9% to about RMB 1,746.5 million for the year ended December 31, 2021[15] - Profit attributable to the owners of the parent company decreased by approximately 62.4% to RMB 52.1 million, primarily due to increased marketing expenses and fair value losses on non-listed financial products[15] - Revenue from the pharmaceutical segment grew by approximately 15.0% to RMB 1,053.3 million, accounting for 60.3% of total revenue[18] - The chain pharmacy segment's revenue remained stable at approximately RMB 622.9 million, representing 35.7% of total revenue[19] - Online pharmacy revenue increased by approximately 11.7% to RMB 70.3 million, accounting for 4.0% of total revenue[20] - Gross profit for the year was RMB 1,061.4 million, an increase of RMB 70.5 million or 7.1% from the previous year[21] - The gross profit margin decreased to 60.8% from 61.8% in the previous year, primarily due to rising raw material costs[21] - Selling and distribution expenses increased by approximately 18.7% to RMB 829.2 million, representing 47.5% of revenue[26] - Research and development expenses decreased by approximately 12.7% to RMB 43.8 million due to delays in collaborative projects caused by the pandemic[28] - Other income and gains decreased to approximately RMB 29.8 million, down RMB 1.8 million from the previous year[25] - Financing costs for the year ended December 31, 2021, amounted to RMB 7.1 million, an increase from RMB 5.2 million in 2020, primarily due to higher actual interest rates on lease liabilities and bank overdrafts[29] - Income tax expenses for the year ended December 31, 2021, were RMB 9.4 million, a decrease from RMB 28.6 million in 2020, mainly due to fair value changes of financial assets and deferred tax impacts[30] - Profit attributable to equity holders of the parent decreased by 62.4% to RMB 52.1 million for the year ended December 31, 2021, compared to RMB 138.5 million in 2020, with a net profit margin of 3.0% down from 8.6%[31] Assets and Liabilities - As of December 31, 2021, the group's net current assets were approximately RMB 356.6 million, down from RMB 398.4 million in 2020, with cash and bank balances decreasing from RMB 294.0 million to RMB 233.4 million[32] - The group's leverage ratio as of December 31, 2021, was 6.4%, down from 9.6% in 2020[35] - The group's current ratio decreased from approximately 1.8 as of December 31, 2020, to 1.7 as of December 31, 2021[32] - The company had available undrawn bank financing of RMB 87.3 million as of December 31, 2021, compared to RMB 40 million in 2020[34] - As of December 31, 2021, the group's capital commitments amounted to RMB 332 million, a decrease from RMB 659 million in 2020, primarily related to the construction of two new buildings and the acquisition of new fixed assets[49] - The group has no contingent liabilities as of December 31, 2021, consistent with the previous year[52] Human Resources - The total number of employees as of December 31, 2021, was 3,152, a decrease from 3,289 in 2020, with total compensation amounting to RMB 343.1 million, up from RMB 329.7 million in 2020[41] - The employee turnover rate was 51.2%, with 72.0% for employees under 29 years old[182] - The total number of employees as of December 31, 2021, was 3,152, with 68% being female and 32% male[176] - 2,444 employees participated in training programs, representing 85.3% of the total workforce, with male and female participation rates at 79.4% and 87.8% respectively[198] - The average training hours for male and female employees were 41.6 hours and 55.0 hours respectively, with senior management receiving an average of 13.7 hours[198] - The company has established a comprehensive employee benefits system, including paid leave, social insurance, and annual health check-ups[183] - The company conducted a survey with 396 employees to gather feedback and improve internal processes[184] Corporate Governance - The company has adopted and complied with the corporate governance code as per the listing rules during the reporting period from January 1, 2021, to March 24, 2021[76] - The board consists of four executive directors, two non-executive directors, and three independent non-executive directors, ensuring that independent directors account for over one-third of the board[81] - All directors confirmed compliance with the standards of the securities trading code as of December 31, 2021[78] - The company has a three-year service contract for all executive and non-executive directors, with independent non-executive directors also serving a three-year term[83] - The chairman and CEO roles are separated, with Lai Zhitian serving as chairman and Lai Yingfeng as CEO, ensuring effective management and development of the business[79] - The board is responsible for overseeing the company's business, strategic decisions, and performance, ensuring objective decisions in the best interest of the company[82] - The company has established sufficient safeguards to ensure the independence and objectivity of the board through the presence of independent non-executive directors[81] - The company will continue to review and monitor its practices to comply with the corporate governance code and maintain high standards of governance[77] Risk Management - The company has established a comprehensive risk management and internal control system to manage risks that may affect the achievement of business objectives[108] - The audit committee is responsible for overseeing the effectiveness of the company's overall risk management efforts and approving annual risk management reports[110] - The company has implemented a risk management process that includes risk identification, assessment, monitoring, and response strategy formulation[113] - The risk management project team is responsible for coordinating risk management activities across the company's functions and subsidiaries[112] - The company emphasizes transparency and accountability to all shareholders through strict disclosure practices[102] - The board has established a risk management framework that includes setting risk management objectives and approving major risk mitigation strategies[110] - The risk management project team tracks the implementation of significant risk response plans and reports to senior management[123] - The internal audit department independently evaluates the adequacy and effectiveness of the group's risk management and internal control systems[121] Environmental, Social, and Governance (ESG) - The ESG report covers the period from January 1, 2021, to December 31, 2021, detailing policies and performance in environmental, social, and governance aspects[138] - The report adheres to the guidelines set by the Hong Kong Stock Exchange, ensuring systematic procedures for data collection and reporting[140] - The company emphasizes the importance of stakeholder opinions in identifying key ESG issues, prioritizing and disclosing significant topics in the report[142] - The report includes quantitative disclosures of key environmental and social performance indicators to monitor progress in fulfilling responsibilities[142] - An independent consultant was engaged to assist in the ESG reporting process and provide related advisory services[147] - The company has established an ESG governance framework, dividing responsibilities into decision-making, communication, and execution levels[149] - The importance matrix identifies nine key ESG issues that are prioritized based on stakeholder feedback and assessments[158] - The company maintains close communication with stakeholders through various methods, including surveys and meetings, to understand their expectations[153] Quality Management - The company emphasizes product quality as a core competitive advantage, continuously improving its quality management system[160] - In 2021, the company completed 10 group standards related to traditional Chinese medicine quality control, enhancing industry benchmarks[160] - The company has established a comprehensive quality management system in compliance with the revised Drug Administration Law, ensuring drug safety and effectiveness[161] - All production units have passed GMP certification, and the company has implemented annual quality audits to maintain high standards[164] - The company has a dedicated R&D team focused on wall-breaking herbal pieces, recognized for its contributions at the Zhongshan Talent Festival[166] - The R&D team includes 17 top experts, including 5 academicians from the Chinese Academy of Engineering, enhancing innovation capabilities[167] - The company collaborates with prestigious institutions like the University of Mississippi and the Chinese Academy of Sciences to strengthen research and development[167] - The company has not experienced any major quality issues or product recalls during the reporting period, ensuring consumer safety[165] - The company conducts annual GMP training to enhance employees' quality management responsibilities[162] - The company has developed emergency response plans for major quality safety incidents, ensuring timely product traceability and recovery[165] Research and Development - The R&D team of the company published 92 academic papers related to traditional Chinese medicine, with 8 included in SCI[168] - The company successfully applied for 4 patents during the reporting period, including 2 inventions and 2 designs[170] - A total of 16 patents were authorized, comprising 8 inventions, 2 utility models, and 6 designs[171] - The company received 25 product and service complaints, with 5 confirmed as unfounded[172] - The company has a total of 971 registered trademarks, with 29 trademark applications submitted during the reporting period[171] - The company has implemented multiple communication channels for customer feedback, including a service hotline and official social media[172]

Financial Performance - Total revenue for the first half of 2021 was approximately RMB 886.7 million, an increase of about 20.2% compared to RMB 737.7 million in the same period of 2020[9]. - Profit for the period was approximately RMB 66.5 million, a decrease of 7.6% from RMB 72.0 million in the same period of 2020[17]. - Basic earnings per share were RMB 0.081, down approximately 5.8% from RMB 0.086 in the same period of 2020[18]. - Gross profit for the group increased by 19.1% to RMB 545.8 million, with a gross profit margin of 61.6%[25]. - The group reported a profit before tax of RMB 80,156 thousand, down 12.8% from RMB 91,916 thousand in the previous year[72]. - The net profit for the six months ended June 30, 2021, was RMB 66,544 thousand, a decrease of 7.9% from RMB 72,004 thousand in 2020[72]. - The total comprehensive income for the period was RMB 67,145 thousand, down from RMB 72,550 thousand in the previous year[75]. Segment Performance - The pharmaceutical segment showed strong growth, with the brand "Cao Jing Hua" leading the sales of herbal products and traditional Chinese medicine[10]. - The pharmaceutical segment reported revenue growth of approximately 34.8% to RMB 535.5 million for the six months ended June 30, 2021, accounting for 60.4% of total revenue[22]. - The chain pharmacy segment's revenue increased by about 0.8% to RMB 312.3 million, representing 35.2% of total revenue, with 379 self-operated stores as of June 30, 2021[23]. - The online pharmacy segment saw revenue growth of approximately 27.0% to RMB 38.9 million, contributing 4.4% to total revenue[24]. Expenses and Costs - Selling and distribution expenses increased by approximately 34% to RMB 398.7 million, representing about 45.0% of revenue[32]. - Administrative expenses rose by approximately 7.3% to RMB 47.1 million, primarily due to depreciation from renovation projects[33]. - The chain pharmacy segment's gross profit decreased by 2.4% to RMB 123.1 million, with a gross profit margin of 39.4%[29]. - The online pharmacy segment's gross profit declined by approximately 1.4% to RMB 24.7 million, with a gross profit margin of 63.4%[30]. Assets and Liabilities - As of June 30, 2021, the group's net current assets amounted to approximately RMB 413.0 million, an increase from RMB 398.4 million as of December 31, 2020[36]. - The group's cash and bank balances totaled approximately RMB 227.0 million as of June 30, 2021, down from RMB 294.0 million as of December 31, 2020[36]. - The debt-to-equity ratio as of June 30, 2021, was 11.5%, compared to 9.6% as of December 31, 2020[37]. - Total liabilities increased to RMB 643,030,000, compared to RMB 598,758,000 at the end of 2020, reflecting a rise of 7.4%[79]. - The company's net assets reached RMB 885,128,000, up from RMB 821,763,000, indicating a growth of 7.7%[79]. Capital Expenditures and Investments - Capital expenditures for the six months ended June 30, 2021, were approximately RMB 81.0 million, significantly higher than RMB 29.0 million for the same period in 2020[49]. - The group’s total property, plant, and equipment additions for the period were RMB 97,663,000, compared to RMB 61,520,000 in the previous year, marking an increase of approximately 58.7%[134]. - The company made significant investments in property, plant, and equipment, totaling RMB 81,038,000 for the six months ended June 30, 2021, compared to RMB 29,003,000 in 2020[89]. Shareholder Information - The board proposed not to declare any interim dividend for the six months ended June 30, 2021, to maintain healthy cash flow, compared to an interim dividend of HKD 0.0515 per share for the same period in 2020[50]. - The company expressed gratitude to shareholders and stakeholders, anticipating a year filled with opportunities and challenges[13]. - The company declared and paid a final dividend of HKD 2.9 per share and a special dividend of HKD 1.45 per share, totaling approximately HKD 36,540,000 (around RMB 33,458,000) for the previous fiscal year[84]. Employee Compensation - As of June 30, 2021, the total employee compensation was RMB 155.5 million, a decrease from RMB 164.9 million for the same period in 2020[51]. - The total compensation for key management personnel for the six months ended June 30, 2021, was RMB 5,418,000, an increase of 50.3% compared to RMB 3,603,000 in 2020[166]. Fair Value and Financial Instruments - The fair value hierarchy indicates that the company’s financial instruments are primarily measured using observable market prices, with a total of RMB 10,030,000 classified under Level 1 and RMB 37,000,000 under Level 2 as of June 30, 2021[171]. - The company’s management has reviewed and approved the valuation techniques used for estimating fair values, ensuring their reasonableness[170]. - The company has invested in non-listed financial products issued by banks in mainland China, estimating their fair value using a discounted cash flow model[170]. Corporate Governance - The company has no undisclosed interests or short positions in shares or related securities as of June 30, 2021[177]. - No directors or their associates engaged in any competitive business activities during the reporting period[200].

Donations and Community Support - In 2020, the company donated medical supplies worth RMB 7.1 million to support the fight against the pandemic, including masks and traditional Chinese medicine products[6] - The company donated RMB 1.07 million in the first batch of medical supplies to designated hospitals during the pandemic[6] - The second batch of donations, valued at RMB 5.3 million, included traditional Chinese medicine products for medical personnel in Wuhan[6] E-commerce and Market Expansion - The e-commerce division achieved significant breakthroughs, including the launch of uniquely packaged products that gained popularity among new consumer groups[7] - Three products registered under Canada's Natural Health Products (NHP) program received approval, contributing to the company's international market expansion[8] - The company plans to enhance production capacity and efficiency by constructing new factories in Yunfu and Zhongshan[13] - The company will continue to promote traditional Chinese medicine and expand its e-commerce initiatives in the post-pandemic era[9] Financial Performance - The company's revenue increased by approximately 19.5% to about RMB 1,603.9 million for the reporting period[18] - Profit attributable to the parent company grew by about 20.8% to RMB 138.5 million, driven by strong growth in the new herbal medicine product line[18] - The pharmaceutical segment's revenue rose by 21.6% to RMB 916.1 million, accounting for 57.1% of total revenue[20] - The chain pharmacy operations generated revenue of RMB 624.9 million, reflecting a 16.7% increase and representing 39.0% of total revenue[20] - Online pharmacy operations saw revenue growth of 17.8% to RMB 62.9 million, contributing 3.9% to total revenue[20] Operational Efficiency and Innovation - The company successfully implemented a partner operation model that established a market benchmark, driving new growth momentum[7] - The new Office Assistance (OA) system has improved operational efficiency and will be complemented by the introduction of a Manufacturing Execution System (MES) and automated logistics[11] - The company’s chief scientist received the "Guangdong Outstanding Inventor Award," highlighting its commitment to innovation[8] Corporate Governance - The company has adopted and complied with the corporate governance code as per the listing rules, with some deviations noted[75] - The chairman and CEO roles are held by the same individual, Lai Zhitian, which the board believes is in the best interest of the company due to his long-term management experience since 1999[76] - All major decisions are made after consulting board members, ensuring sufficient checks and balances within the board[76] - The company has confirmed compliance with the standard code of conduct for securities trading by all directors for the year ending December 31, 2020[77] Risk Management - The board emphasizes risk management and has established an effective risk management and internal control system to manage risks impacting business objectives[107] - The audit committee serves as the highest-level risk management body, responsible for reviewing the comprehensive risk management system and approving annual risk management plans[110] - The risk management project team leads daily risk management activities and is tasked with identifying and assessing significant risks across the organization[112] Environmental, Social, and Governance (ESG) Initiatives - The ESG report highlights the company's commitment to economic, social, and environmental performance, covering the period from January 1, 2020, to December 31, 2020[142] - The company emphasizes green operations, adhering to environmental protection laws and continuously improving environmental performance through a structured management system[162] - The company has established a complete environmental management system to monitor emissions and resource usage effectively[162] Employee Development and Rights - The company emphasizes employee rights and development, implementing training programs and ensuring compliance with labor laws[196] - The company adheres to the principles of "justice, fairness, and openness" in employment, ensuring no discrimination based on social identity during hiring, compensation, and promotion processes[197] - As of December 31, 2020, the company had a total of 4,186 employees[200]