Financial Performance - For the six months ended June 30, 2021, the group recorded revenue of approximately HKD 214,491,000, an increase of approximately 208.8% compared to approximately HKD 69,470,000 for the same period in 2020[8] - The group turned a net loss attributable to owners of the company of approximately HKD 36,434,000 for the six months ended June 30, 2020, into a net profit of approximately HKD 1,133,000 for the six months ended June 30, 2021[8] - The group’s total comprehensive income for the six months ended June 30, 2021, was HKD 23,830,000, compared to a total comprehensive loss of HKD 61,064,000 for the same period in 2020[9] - The group’s basic and diluted earnings per share for the six months ended June 30, 2021, was HKD 0.07, compared to a loss of HKD 2.18 for the same period in 2020[9] - The company reported a pre-tax profit of HKD 1,133,000 for the first half of 2021, a turnaround from a pre-tax loss of HKD 36,633,000 in the same period of 2020[33] - Profit for the period was approximately HKD 1,133,000, a significant improvement from a loss of approximately HKD 36,434,000 in the same period last year[88] Assets and Liabilities - The group’s total assets less current liabilities amounted to HKD 640,656,000 as of June 30, 2021, compared to HKD 617,066,000 as of December 31, 2020[10] - The group’s current assets increased to HKD 397,695,000 as of June 30, 2021, from HKD 349,355,000 as of December 31, 2020[10] - The group’s non-current assets decreased to HKD 263,010,000 as of June 30, 2021, from HKD 300,765,000 as of December 31, 2020[10] - The group’s cash and cash equivalents increased to HKD 68,671,000 as of June 30, 2021, from HKD 65,755,000 as of December 31, 2020[10] - Trade receivables amounted to HKD 103,391,000 as of June 30, 2021, up from HKD 38,150,000 as of December 31, 2020, with a provision for credit losses of HKD 32,100,000[50] - The total value of prepaid and guarantee deposits to suppliers was approximately HKD 144,179,000 as of June 30, 2021, down from HKD 171,057,000 as of December 31, 2020[51] Dividends and Share Capital - The group did not recommend the payment of any interim dividend for the six months ended June 30, 2021, consistent with the previous year[8] - The issued and paid-up share capital remained at 1,671,847,000 shares with a value of HKD 83,592,000 as of June 30, 2021[54] - Major shareholders include Eagle Amber Holdings Limited, Zhang Jiang, and Dai Xiaosong, each holding 426,672,000 shares, representing 25.52% of total issued shares[134] Investments and Acquisitions - The company acquired 50% equity in Saike International for RMB 95 million and 15% equity in Weijian International for RMB 47.25 million, completed in 2015 and 2017 respectively[23] - The company completed the sale of 25% of its equity interest in Saiko International for a maximum consideration of RMB 44,000,000 (approximately HKD 51.8 million)[93] - The company agreed to sell approximately 7.87% of its equity interest in Weijian International for RMB 68,000,000 (approximately HKD 80.9 million)[97] Operational Highlights - The company is primarily engaged in the distribution and trading of pharmaceutical products in China, with a focus on marketing and promotional services[16] - The company plans to enhance its product portfolio and distribution channels, focusing on acquiring distribution rights for new products in the second half of 2021[75] - The ongoing national volume-based procurement is expected to continue, potentially leading to further price reductions for pharmaceuticals, which may impact the profitability of companies in the pharmaceutical distribution sector, including the company[74] Challenges and Risks - The company faces challenges due to national volume-based procurement policies, which are expected to continue and expand, leading to downward pressure on drug prices[112] - The company is currently unable to establish a clear timeline for resuming trading of its shares due to legal restrictions[122] - The company is actively monitoring foreign currency risks, with most transactions conducted in RMB, and does not currently require a foreign currency hedging policy[119] Corporate Governance - Liu Yang resigned as executive director and chairman on May 15, 2021, to focus on personal business[139] - Wang Qiukin was appointed as chairman and CEO following Liu Yang's resignation, which deviates from the corporate governance code regarding separation of roles[142] - The company has adopted its own corporate governance practices in accordance with the corporate governance code[141] Legal and Regulatory Matters - The Securities and Futures Commission (SFC) has filed a petition against the company and two former directors, alleging misconduct related to business operations from 2015 to 2018[147] - As of June 30, 2021, there are no significant ongoing litigations, arbitrations, or claims involving the company[149]

Financial Performance - For the year ended December 31, 2020, the group recorded revenue of approximately HKD 133.2 million, an increase of about 12.3% compared to HKD 118.6 million in 2019[7]. - The gross profit for the same period was approximately HKD 10.9 million, a decrease of about 26.8% from HKD 14.9 million in 2019[7]. - The net loss attributable to owners of the company was approximately HKD 69.7 million, an increase of about 58.0% from a loss of HKD 44.1 million in 2019[7]. - The overall revenue for the group reached HKD 133.2 million in 2020, compared to HKD 118.6 million in 2019, maintaining a gross margin of 5.2%[18]. - Sales cost for the year was approximately HKD 122.3 million, an increase of about 17.8% from approximately HKD 103.8 million for the year ended December 31, 2019[36]. - Gross profit decreased to approximately HKD 10.9 million, a decline of about 26.8% from approximately HKD 14.9 million for the year ended December 31, 2019, with a gross margin of about 8.2%, down 4.3 percentage points[37]. - Other income for the year was approximately HKD 10.9 million, a turnaround from a net loss of approximately HKD 1.4 million in 2019, mainly due to a net foreign exchange gain of approximately HKD 8.9 million[38]. - Selling and distribution expenses decreased to approximately HKD 10.5 million, a reduction of about 37.1% from approximately HKD 16.7 million for the year ended December 31, 2019[39]. - Administrative expenses were approximately HKD 17.4 million, down about 12.6% from approximately HKD 19.9 million for the year ended December 31, 2019[40]. - The company incurred a loss of approximately HKD 69.7 million for the year, an increase of about 58.0% compared to a loss of approximately HKD 44.1 million for the year ended December 31, 2019[44]. Dividend and Equity - The board did not recommend the payment of a final dividend for the year ended December 31, 2020[7]. - As of December 31, 2020, the group's total equity was approximately HKD 605.9 million, down from HKD 654.5 million in 2019[67]. - As of December 31, 2020, the company's distributable reserves amounted to approximately HKD 431,219,000, a decrease from HKD 439,348,000 in 2019[107]. - The company has established a dividend policy that considers cash levels, retained earnings, financial performance, expected capital expenditures, and financing arrangements[147]. Market and Operational Challenges - The COVID-19 pandemic significantly impacted the group's business operations, particularly in the first half of 2020, but performance improved in the second half due to effective government measures[11]. - The average new bidding price for selected drugs decreased by approximately 50% due to the implementation of centralized procurement policies in China[10]. - The group anticipates continued pricing pressure and potential loss of market share due to ongoing centralized procurement initiatives, which may further decrease sales volume and average profit margins[12]. - The group anticipates continued pricing pressure on pharmaceuticals due to national health insurance budget tightening and volume-based procurement policies[22]. Strategic Initiatives - The group is actively enhancing collaboration with suppliers and end customers to improve sales and marketing capabilities and expand its distribution network in China[12]. - The company plans to enhance its local distribution network and sales capabilities to strengthen its competitive advantage in China[24]. - The group aims to focus on its core business of pharmaceutical product distribution and marketing services, potentially divesting non-core assets in the future[25]. - The company has obtained distribution rights for new products, including a recombinant cytokine gene-derived protein injection and sildenafil orally disintegrating tablets, expected to launch in 2021[23]. Environmental and Social Responsibility - The group recognizes the importance of environmental policies and has implemented measures to reduce energy consumption and promote recycling[26]. - The company has implemented an internal environmental policy to manage its environmental impact and promote awareness among employees[195]. - The company has complied with the HKEX Environmental, Social and Governance Reporting Guidelines for the reporting year[189]. - The company aims to expand its market share and local distribution network in China by obtaining new exclusive distribution rights[192]. Corporate Governance and Compliance - The company has adopted corporate governance practices in line with the corporate governance code and has complied with applicable principles[151]. - The board consists of six members, including three executive directors and three independent non-executive directors, with no significant relationships among them[153]. - The company has established service contracts for its executive directors, with terms starting from June 27, 2020, for a duration of two years[110]. - The company has engaged an independent professional firm to review the effectiveness of its internal control system, which includes all significant operational processes[180]. Investments and Financial Position - As of December 31, 2020, the investment amount in Kang Jian International Medical Group Limited was approximately HKD 144.4 million, with a fair value of about HKD 36.3 million, representing 5.6% of the group's total assets[46]. - The fair value of the group's investment in HCMPS Healthcare Holdings Limited was approximately HKD 26.6 million as of December 31, 2020, down from HKD 42.0 million in 2019, accounting for 4.1% of total assets[51]. - The group recorded a fair value loss of approximately HKD 15.4 million on its investment in HCMPS for the year, compared to a loss of HKD 19.0 million in 2019[51]. - The group confirmed a fair value loss of approximately HKD 2.2 million on its investment in Weijian International for the year, compared to a loss of HKD 2.8 million in 2019[54]. Legal and Regulatory Issues - The company is at risk of delisting if shares remain suspended for 18 months, with the deadline set for January 31, 2020[81]. - The Securities and Futures Commission has filed a petition against two former directors for alleged misconduct related to acquisitions, including a claim for HKD 26 million[85]. - The independent investigation into the internal control systems is ongoing, with a report being prepared by an independent consultant[78]. - The company has been actively seeking legal advice to resolve the issues raised by the Securities and Futures Commission[79].

Financial Performance - For the six months ended June 30, 2020, the group recorded revenue of approximately HKD 69,470,000, an increase of about 25.1% compared to approximately HKD 55,511,000 for the same period in 2019[8]. - The net loss attributable to owners of the company for the six months ended June 30, 2020, was approximately HKD 36,434,000, an increase of about 367.2% compared to approximately HKD 7,798,000 for the same period in 2019[8]. - Revenue for the six months ended June 30, 2020, was HKD 69,470,000, representing an increase of 25% compared to HKD 55,511,000 for the same period in 2019[21]. - The company reported a loss before tax of HKD 36,633,000, compared to a loss of HKD 7,294,000 in the previous year, indicating a significant increase in losses[21]. - Total comprehensive expenses for the period amounted to HKD 61,064,000, compared to HKD 19,454,000 in the same period of 2019[21]. - Basic and diluted loss per share was HKD 2.18, compared to HKD 0.47 for the same period in 2019[21]. - The company recognized an impairment loss of HKD 22,235,000 on interests in associates during the period[21]. - The loss for the period was approximately HKD 36,434,000, an increase of about 367.2% compared to approximately HKD 7,798,000 for the same period in 2019[100]. Assets and Liabilities - Non-current assets decreased from HKD 378,374,000 as of December 31, 2019, to HKD 330,637,000 as of June 30, 2020[22]. - Current assets decreased from HKD 300,533,000 to HKD 283,252,000 during the same period[22]. - Total equity attributable to owners decreased from HKD 654,483,000 at the beginning of the year to HKD 593,419,000 by June 30, 2020[22]. - The total liabilities reported as of June 30, 2020, were 9,156 thousand HKD, down from 12,992 thousand HKD at the end of 2019[67]. - The group has pledged assets with a total carrying value of approximately 8,850,000 HKD as of June 30, 2020, compared to 9,347,000 HKD at the end of 2019[72]. - The group maintained a strong liquidity position with cash and cash equivalents of approximately HKD 101,334,000 as of June 30, 2020, compared to approximately HKD 88,668,000 as of December 31, 2019[102]. - The group had no significant contingent liabilities as of June 30, 2020[103]. Cash Flow - The net cash inflow from operating activities for 2020 was HKD 13,492,000, a significant improvement from a net outflow of HKD 57,737,000 in 2019[26]. - The net cash inflow from investing activities decreased to HKD 696,000 in 2020 from HKD 1,582,000 in 2019[26]. - The net cash outflow from financing activities increased to HKD 750,000 in 2020 compared to HKD 614,000 in 2019[26]. - The total cash and cash equivalents at the end of the period increased to HKD 101,334,000 from HKD 89,081,000 in 2019[26]. - The cash flow from operating activities showed a turnaround, indicating improved operational efficiency and financial health[26]. Investigations and Legal Matters - The company is currently undergoing an independent investigation related to acquisitions made in previous years, which has not yet reached a conclusive result[14]. - The investigation pertains to the acquisition of 50% interest in Saike International and 15% interest in WinHealth International, with acquisition costs of RMB 95,000,000 and RMB 47,250,000 respectively[14]. - The company has established an independent committee to investigate issues related to the acquisitions and handle matters concerning the trading suspension[13]. - The trading of the company's shares has been suspended since October 6, 2017, due to concerns raised by the Securities and Futures Commission regarding the accuracy of information related to the acquisitions[13]. - The company plans to seek legal advice to expedite the resumption of trading of its shares, which has been suspended since 2017[30]. - The company has not yet established a clear timetable for resuming trading, pending the outcome of ongoing investigations[30]. - The company is actively seeking legal advice to address the concerns raised by the Securities and Futures Commission and to restore trading of its shares[121]. Operational Performance - The company experienced operational impacts due to COVID-19, affecting marketing and promotional services during the reporting period[80]. - The company expects continued pricing pressure and potential market share loss due to the implementation of centralized drug procurement policies in China[88]. - The company plans to enhance its product portfolio by acquiring distribution rights for new products, with a new product launch planned for the end of 2020[89]. - The company aims to focus on its core business of pharmaceutical product distribution and marketing services, potentially considering the sale of non-core business assets in the near future[91]. - The company will continue to expand its local distribution network and enhance sales and marketing capabilities to strengthen its competitive advantage in China[90]. Shareholder Information - The company raised approximately HKD 343.6 million through a rights issue, issuing 1,249,344,000 shares at a subscription price of HKD 0.275 per share[125]. - As of June 30, 2020, the actual use of the net proceeds from the rights issue included approximately HKD 143.2 million for potential acquisitions in healthcare-related businesses[128]. - The company has a total of 1,671,846,657 shares issued as of June 30, 2020[135]. - Major shareholders include Yu Wenyong and Eagle Amber Holdings Limited, each holding 426,672,000 shares, representing 25.52% of total shares[135]. - Other significant shareholders include Qian Shenglei with 193,704,000 shares (11.59%) and Zhou Ling with 161,400,000 shares (9.65%)[135]. Corporate Governance - The audit committee reviewed the group's unaudited condensed consolidated financial statements for the period[146]. - The company complied with the corporate governance code as per the listing rules during the reporting period[142]. - The audit committee consists of three independent non-executive directors, with Li Qianming serving as the chairperson[145]. - No shares were purchased, sold, or redeemed by the company or its subsidiaries during the period[144].

Financial Performance - For the year ended December 31, 2019, the group recorded revenue of approximately HKD 118.6 million, a decrease of about 68.2% compared to HKD 372.4 million in 2018[8] - The gross profit for the year was approximately HKD 14.9 million, down approximately 68.6% from HKD 47.4 million in 2018[8] - The net loss attributable to owners of the company was approximately HKD 44.1 million, compared to a net profit of approximately HKD 33.2 million in 2018[8] - The overall revenue for the group decreased from HKD 372.4 million in 2018 to HKD 118.6 million in 2019, reflecting a significant decline in both segments[19] - The group's revenue from pharmaceutical product distribution and trade for the year was approximately HKD 114.7 million, a decrease of about 68.5% compared to HKD 364.5 million in 2018[21] - The marketing and promotion services segment generated revenue of approximately HKD 4.0 million, down 49.4% from HKD 7.9 million in 2018[24] - The cost of sales for the year was approximately HKD 103.8 million, a decrease of about 68.1% from approximately HKD 325.0 million for the year ended December 31, 2018[42] - Other net losses for the year amounted to approximately HKD 1.4 million, compared to other net income of approximately HKD 18.4 million in the previous year[44] - Selling and distribution expenses for the year were approximately HKD 16.7 million, a decrease of about 30.4% from approximately HKD 24.0 million for the year ended December 31, 2018[45] - Administrative expenses for the year were approximately HKD 19.9 million, a decrease of about 13.1% from approximately HKD 22.9 million for the year ended December 31, 2018, primarily due to reduced legal and professional fees related to independent investigations of acquisitions[46] - Share of profits from associates for the year was approximately HKD 9.3 million, a decrease of about 54.0% from approximately HKD 20.2 million for the year ended December 31, 2018, mainly contributed by Saike International[48] - Income tax expenses for the year were approximately HKD 0.3 million, a decrease of about 95.0% from approximately HKD 6.0 million for the year ended December 31, 2018, primarily due to a reduction in taxable income[49] - The company recorded a loss attributable to owners of approximately HKD 44.1 million for the year, compared to a profit of approximately HKD 33.2 million for the year ended December 31, 2018, mainly due to a significant decline in sales and gross profit[50] Market Challenges - The group faced significant challenges due to the temporary suspension of production and sales of its main product, the second-generation cephalosporin, leading to a decrease in sales volume[12] - The average new bidding price for selected drugs decreased by approximately 50% due to the implementation of the "4+7 city drug procurement" policy, which expanded nationwide in 2019[11] - The group anticipates continued pressure on drug pricing and potential loss of market share, which may further decrease product sales and average profit margins[12] - The group anticipates continued pricing pressure and potential loss of market share due to the implementation of centralized procurement policies in China[25] - The impact of the COVID-19 pandemic has severely affected the group's marketing and promotion services, but recovery is expected once the situation stabilizes[26] Strategic Initiatives - The group aims to enhance its sales and marketing capabilities and expand its distribution network in China to mitigate adverse external factors[12] - The group will continue to seek opportunities to enhance its distribution capabilities and focus on high-performing patented drugs to maximize shareholder returns[15] - The group plans to improve its local distribution network and sales capabilities to strengthen its competitive advantage in the market[29] - The group is focusing on reallocating resources to core business areas, particularly in pharmaceutical product distribution and marketing services[30] - The company aims to diversify its product portfolio and expand its distribution network to mitigate risks associated with reliance on suppliers and distributors[40] - The company plans to consider divesting non-core business assets as part of its long-term strategy[65] Governance and Compliance - The company has established a governance framework with various committees, including audit, remuneration, and nomination committees[95][96] - The company’s independent non-executive directors have significant backgrounds in accounting and finance, enhancing governance[95][96] - The company has received annual confirmations regarding the independence of its independent non-executive directors[115] - The company has adopted its own corporate governance practices in accordance with the principles and code provisions of the Corporate Governance Code[158] - The board is responsible for formulating the group's business strategy and overall policies[155] - The company emphasizes board diversity, considering factors such as gender, age, cultural background, and professional experience to support business strategy execution[169] Environmental Sustainability - The company is committed to environmental sustainability and has implemented measures to reduce energy consumption and promote recycling[31] - The company aims to expand its market share and distribution network by obtaining new exclusive distribution rights[193] - The company is committed to reducing its carbon emissions, particularly through optimizing distribution and transportation networks[198] - The company has implemented an internal environmental policy to manage its business's environmental impact[196] - The company recognizes the importance of environmental protection and strives to minimize its operational impact on the natural environment[194] - The company has established an environmental awareness program within its operations[196] Investment and Financial Management - The company raised approximately HKD 343.6 million through a rights issue, with a subscription price of HKD 0.275 per share, representing a 31.25% discount to the closing price of HKD 0.400 on the announcement date[77] - The net proceeds from the rights issue, amounting to approximately HKD 330.0 million, were allocated as follows: HKD 143.2 million for potential acquisitions in healthcare, HKD 28.8 million for acquiring 11% of China Biotech, and HKD 40.0 million for expanding prescription drug distribution rights in China[79] - As of December 31, 2019, the company had approximately HKD 39.6 million of unutilized proceeds from the rights issue, which will be stored in a licensed bank in Hong Kong as short-term interest-bearing deposits[80] - The company plans to continue monitoring its investments prudently due to recent market uncertainties[54] Shareholder Relations - The company communicates with shareholders and investors through various formal channels, including interim and annual reports[184] - The company will provide further announcements to shareholders and potential investors regarding any significant developments[88] - The board of directors did not recommend a final dividend for the year, consistent with the previous year where no dividend was paid[103] Operational Performance - The company primarily engages in the distribution and trading of pharmaceutical products in China, along with providing marketing and promotional services[100] - The company has a wide distribution network for various imported prescription drugs in China, benefiting from demographic trends such as aging population and increasing healthcare coverage[59] - The company has effectively managed its working capital and financial resources to support ongoing operations[67] - The company incurred approximately HKD 1,650,000 for statutory audit services in the current year, consistent with the previous year's amount[182]

Financial Performance - The group recorded revenue of approximately HKD 55,511,000 for the six months ended June 30, 2019, a decrease of about 67.3% compared to HKD 169,979,000 for the same period in 2018[9]. - The group reported a loss attributable to owners of the company of approximately HKD 7,798,000 for the six months ended June 30, 2019, compared to a profit of HKD 14,174,000 for the same period in 2018[9]. - For the six months ended June 30, 2019, the company reported a total comprehensive loss of HKD 19,454,000, compared to a total comprehensive income of HKD 2,692,000 for the same period in 2018[12]. - The group incurred a loss before tax of HKD 7,294,000 for the six months ended June 30, 2019, compared to a profit before tax of HKD 18,501,000 for the same period in 2018[32]. - The company reported a loss of approximately HKD 7,798,000 for the period, compared to a profit of approximately HKD 14,174,000 for the six months ended June 30, 2018[65]. Cash and Liquidity - The group’s cash and cash equivalents were HKD 89,081,000 as of June 30, 2019, down from HKD 146,101,000 as of December 31, 2018[11]. - The net cash outflow from operating activities for the six months ended June 30, 2019, was HKD 57,737,000, a significant decrease from a net inflow of HKD 4,029,000 in 2018[15]. - As of June 30, 2019, the company maintained a strong liquidity position with cash and cash equivalents of approximately HKD 89,081,000, down from approximately HKD 146,101,000 as of December 31, 2018[86]. Assets and Liabilities - The total assets less current liabilities amounted to HKD 715,944,000 as of June 30, 2019, compared to HKD 735,022,000 as of December 31, 2018[11]. - The group’s total liabilities decreased to HKD 10,014,000 in deferred tax liabilities as of June 30, 2019, compared to HKD 9,638,000 as of December 31, 2018[11]. - The group’s equity attributable to owners of the company was HKD 705,930,000 as of June 30, 2019, down from HKD 725,384,000 as of December 31, 2018[11]. - Trade receivables decreased from HKD 82,241,000 in December 2018 to HKD 52,114,000 in June 2019, representing a decline of 36.7%[47]. - The total amount of contract liabilities rose significantly from HKD 2,353,000 in December 2018 to HKD 12,147,000 in June 2019, marking an increase of 417.5%[49]. Expenses and Costs - The sales cost for the period was approximately HKD 48,678,000, a decrease of about 66.5% compared to approximately HKD 145,289,000 for the six months ended June 30, 2018[76]. - Selling and distribution expenses were approximately HKD 5,149,000, down about 40.2% from approximately HKD 8,615,000 for the six months ended June 30, 2018[79]. - Administrative expenses increased by approximately 23.7% to about HKD 12,948,000, mainly due to increased legal and professional fees related to independent investigations concerning acquisition matters[81]. - Employee costs for the period amounted to approximately HKD 6.525 million, compared to HKD 10.812 million for the six months ending June 30, 2018[97]. Revenue Segments - The gross profit for the pharmaceutical distribution and trading segment was HKD 5,152,000, while the marketing and promotion services segment contributed HKD 1,681,000, totaling HKD 6,833,000[32]. - Revenue from pharmaceutical product distribution and trade was approximately HKD 53,692,000, down about 67.5% from approximately HKD 165,290,000 in the same period of 2018[68]. - The marketing and promotion services segment generated revenue of approximately HKD 1,819,000, down from approximately HKD 4,689,000 in the same period of 2018[69]. Future Outlook and Strategy - The company plans to continue enhancing its product portfolio, distribution channels, and marketing strategies in the second half of 2019[72]. - The company aims to expand its local distribution network and enhance sales and marketing capabilities to improve competitiveness in China[73]. - The company anticipates ongoing pricing pressure and potential market share loss due to stricter regulations and increased competition in the pharmaceutical distribution sector[71]. - The company will continue to seek potential acquisition opportunities in the pharmaceutical sector to diversify its business and create synergies for future development[73]. Investigations and Regulatory Issues - The company is currently undergoing an independent investigation related to previous acquisitions, which may affect future financial reporting and operations[18]. - The independent investigation into past acquisitions is ongoing, with an independent investigator appointed to assist in the process[100]. - The company's shares have been suspended from trading since October 6, 2017, due to regulatory concerns regarding previous acquisition announcements[100]. Other Financial Metrics - The company’s basic and diluted loss per share was HKD 0.47 for the six months ended June 30, 2019, compared to earnings of HKD 0.85 for the same period in 2018[10]. - The income tax expense for the six months ended June 30, 2019, was HKD 504,000, a significant decrease from HKD 4,327,000 in the same period of 2018, indicating a reduction of 88%[36]. - The fair value loss on financial assets measured at fair value through profit or loss was HKD 93,000 for the six months ended June 30, 2019, compared to a loss of HKD 2,565,000 in the same period of 2018, indicating an improvement[35].

Financial Performance - For the year ended December 31, 2018, the group recorded revenue of approximately HKD 372.4 million, an increase of about 58.3% compared to HKD 235.2 million in 2017[8] - The gross profit for the year was approximately HKD 47.4 million, a slight increase of 0.2% from HKD 47.3 million in 2017[8] - The net profit attributable to owners of the company was approximately HKD 33.2 million, a significant recovery from a net loss of HKD 105.0 million in 2017[8] - The company's asset-liability ratio was zero as of December 31, 2018, consistent with the previous year[8] - The total revenue for the year was approximately HKD 372.4 million, an increase of about 58.3% compared to HKD 235.2 million for the year ended December 31, 2017[37] - The sales cost for the year was approximately HKD 325.0 million, representing an increase of about 73.0% from approximately HKD 187.9 million for the year ended December 31, 2017[38] - The gross profit remained stable at approximately HKD 47.4 million, with a gross margin of about 12.7%, a decrease of 7.4 percentage points compared to the previous year[39] - The net other income for the year was approximately HKD 18.4 million, a turnaround from a net loss of approximately HKD 117.7 million in 2017, primarily due to a net gain of approximately HKD 20.7 million from the equity of WinHealth International[41] - Income tax expenses decreased by approximately 43.4% to about HKD 6.0 million from approximately HKD 10.6 million in 2017, primarily due to a reduction in non-deductible expenses and deferred tax expenses[45] - The profit for the year was approximately HKD 33.2 million, a significant turnaround from a net loss of approximately HKD 105.0 million in 2017, mainly due to a substantial decrease in fair value losses on equity instruments[46] Market Challenges - The average new bidding price for selected drugs decreased by approximately 50% due to the implementation of the "4+7 city drug procurement document" in 2018[11] - The company's gross margin for the year was approximately 12.7%, a decrease of 7.4 percentage points from the previous year[12] - The company reported a significant decline in sales volume of its main product, injectable cefoperazone sodium, due to reduced customer inventory levels[12] - The implementation of the "two-invoice system" has led to a decline in customer inventory levels, negatively impacting sales volume of key products like cefoperazone sodium[20] - The group anticipates continued pricing pressure and market share loss due to the "4+7 city drug procurement" policy announced this year[24] Strategic Initiatives - The company aims to strengthen cooperation with suppliers and end customers to enhance sales and marketing capabilities amid market challenges[11] - The company aims to diversify its business through potential acquisitions in the healthcare sector to achieve synergies for future growth[15] - The company plans to enhance its sales and marketing capabilities by recruiting more personnel and improving local distribution networks to strengthen its competitive advantage in China[28] - The company is actively seeking potential acquisition opportunities in the pharmaceutical industry to diversify its business and create synergies for future development[28] - The group has obtained exclusive national distribution rights for a prescription tablet, indicating ongoing efforts to enrich its product portfolio[27] Corporate Governance - The company's board of directors has undergone changes, with several new appointments made on June 27, 2018[104] - The board consists of six members, including three executive directors and three independent non-executive directors, with no significant relationships among them[148] - The company has established a corporate governance committee to oversee governance policies and practices[171] - The audit committee consists of three independent non-executive directors, ensuring compliance with listing rules[169] - The company has adopted a set of insider information policies and procedures to ensure compliance with applicable laws and regulations regarding the handling and dissemination of insider information[178] Environmental and Social Responsibility - The company has complied with the HKEX Environmental, Social and Governance Reporting Guidelines for the year ending December 31, 2018[187] - The company has established internal environmental policies to manage its business activities' impact on the environment[193] - The company encourages a paperless work environment and promotes recycling initiatives among employees[198] - The company emphasizes the importance of environmental protection and compliance with applicable laws and regulations in its operations[191] - The company actively seeks sustainable practices to better utilize natural resources in its operations[200]