Investment Rating - The report maintains a BUY rating for Joinn Laboratories with a target price revised to HK$14.41 from HK$21.18, reflecting a potential upside of 57.1% from the current price of HK$9.17 [2][4]. Core Insights - Joinn Laboratories reported a revenue of RMB2,376 million for 2023, representing a 4.8% year-over-year increase, while attributable net income fell by 66.9% to RMB338 million due to fair value losses from biological assets [2]. - The company anticipates that revenue for 2024 will remain on par with 2023, facing continued pressure on profitability due to uncertainties in the R&D recovery of the domestic pharmaceutical market [2]. - Early signs of stabilizing client demand were noted, with a 20% year-over-year growth in contract booking volume in January-February 2024 [2]. - Joinn's overseas business saw a significant revenue increase of 51% year-over-year in 2023, driven by the performance of Biomere [2]. Financial Summary - For FY23, Joinn's revenue was RMB2,376 million, with a projected revenue of RMB2,425 million for FY24, indicating a modest growth of 2.0% [3][9]. - Adjusted net profit for FY23 was RMB481.6 million, with expectations of RMB436 million for FY24, reflecting a decline of 9.5% [3][9]. - The company’s gross profit margin is expected to decrease to 38.08% in FY24, with operating and net margins also projected to decline [5][12]. Operational Developments - Joinn has completed the construction of its Phase II facilities in Suzhou and is strategically planning the operational launch of these sites in line with market conditions [2]. - The company plans to hire an additional 100-200 staff in 2024 to support growth in emerging service areas, particularly clinical services [2]. Valuation Metrics - The report provides a DCF valuation with a WACC of 12.2% and a terminal growth rate of 2.0%, leading to a target price of HK$14.41 per share [7][4]. - The adjusted EPS for FY24 is projected at RMB0.58, with a P/E ratio of 15.5x for FY24 [3][12].

Dividend Distribution - The company plans to distribute a cash dividend of 1.6 RMB per 10 shares to all shareholders, based on the total share capital after deducting repurchased shares[5] - The company plans to distribute a cash dividend of RMB 1.6 per 10 shares, totaling approximately RMB 119.98 million, which accounts for 30.22% of the net profit attributable to shareholders for the year[94] - The total cash dividend distributed was RMB 214,244,424.40, with a cash dividend of RMB 0.40 per share (tax included) and a capital reserve increase of 0.4 shares per share[188] Financial Performance - The company reported a significant increase in revenue for the year 2023, with total revenue reaching approximately 1.2 billion RMB, representing a year-over-year growth of 25%[39] - The company reported a revenue increase of 15% year-over-year, reaching $500 million in Q4 2023[58] - The company reported a significant increase in revenue, achieving a total of 1.2 billion in Q4 2023, representing a 15% year-over-year growth[64] - The company's operating revenue for 2023 was CNY 2,376,486,797.10, representing a 4.78% increase from CNY 2,267,970,979.11 in 2022[161] - The net profit attributable to shareholders for 2023 decreased by 63.04% to CNY 396,992,565.79 from CNY 1,074,257,178.93 in 2022[161] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 337,564,742.86, down 66.89% from CNY 1,019,435,408.97 in the previous year[161] - The net cash flow from operating activities for 2023 was CNY 622,875,138.44, a decrease of 35.86% compared to CNY 971,066,113.56 in 2022[161] - The total assets at the end of 2023 were CNY 10,027,159,630.47, down 3.25% from CNY 10,364,215,494.62 at the end of 2022[161] - The net assets attributable to shareholders increased by 1.17% to CNY 8,279,315,724.35 from CNY 8,183,701,358.27 in 2022[161] - Basic earnings per share for 2023 were CNY 0.53, a decrease of 63.19% from CNY 1.44 in 2022[161] - The weighted average return on net assets for 2023 was 4.82%, down 9.17 percentage points from 13.99% in 2022[161] Investment and Research - The investment scale for the non-clinical research base project in Guangzhou is estimated to be approximately 360 million RMB, with a remaining balance of 176.81 million RMB as of the reporting period[14] - The company has invested a total of 50 million RMB in the Capital Health Industry (Beijing) Fund, with 25 million RMB contributed in the current reporting period[15] - The company has committed to investing 8 million USD in the Pablo Hill Venture Fund, with 5.3 million USD already contributed[15] - The company is actively investing in new product development, with a budget allocation of 200 million RMB for R&D in innovative drug testing models[39] - The company is investing $50 million in R&D for new technologies aimed at enhancing product safety and efficacy[58] - The company is investing 50 million in R&D for new technologies aimed at enhancing product efficiency[64] Market Expansion - User data indicates that the company has expanded its client base, now serving over 300 pharmaceutical companies, which is a 15% increase compared to the previous year[39] - Market expansion efforts include entering three new international markets, which are expected to contribute an additional 10% to overall revenue by the end of 2024[39] - Market expansion plans include entering three new international markets by Q3 2024, projected to increase market share by 5%[64] - Market expansion efforts have led to a 20% increase in market share in the Asia-Pacific region[58] Strategic Partnerships and Acquisitions - The company has completed two strategic acquisitions in the past year, enhancing its capabilities in biopharmaceutical research and increasing its market share by 5%[39] - The company has established a new partnership with a leading biotech firm to co-develop next-generation drug testing platforms, expected to launch in Q3 2024[39] - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of $100 million allocated for this purpose[58] - A new strategic partnership was announced, expected to drive a 15% increase in operational efficiency[58] Operational Efficiency and Governance - The company has reported a 10% increase in operational efficiency due to recent process optimizations and technology upgrades[39] - The company is focusing on technological innovation, with plans to implement AI-driven analytics in its research processes by mid-2024, aiming to improve efficiency by 30%[39] - The company is committed to maintaining high standards of corporate governance and transparency, ensuring compliance with all regulatory requirements[39] - The company has established several specialized committees, including the Audit Committee and the Strategic Committee, to enhance governance[81] - The company has implemented a performance-based salary system for employees, prioritizing salary increases for frontline technical staff[91] - The company has maintained a stable governance structure with ongoing roles for its directors in various capacities[72] Environmental Responsibility - The company has implemented various carbon reduction measures, including the use of energy-efficient LED lighting and promoting paperless operations[20] - The company has invested CNY 3,991,500 in environmental protection during the reporting period[107] - The company has maintained effective internal financial reporting controls without any significant deficiencies[105] - The company has conducted comprehensive inspections of its environmental management status and engaged third-party testing for pollutants[109] - The company has reported zero instances of exceeding pollution discharge standards for noise and wastewater[113] - The company has a waste disposal agreement with a third-party service provider for regular collection and treatment of medical and hazardous waste, totaling 136.63 tons and 159.15 tons per year respectively[116] - The company is committed to enhancing its sewage treatment plant to meet higher standards[118] Risks and Compliance - The company has faced disciplinary action from the Shanghai Stock Exchange due to non-compliance with shareholding disclosure regulations[25] - The company faces risks related to international economic fluctuations, which may negatively impact the pharmaceutical industry and innovation investments[54] - The company is experiencing increased competition in the non-clinical CRO industry, necessitating the maintenance of its core competitive advantages to protect profitability[55] - The company emphasizes the importance of investment risk awareness in its forward-looking statements[144] - The company has not faced any significant risks that could materially affect its operations during the reporting period[145] Human Resources - The total number of employees in the company and its main subsidiaries is 2,510, with 1,873 being technical personnel[91] - The company has conducted over a thousand training sessions to improve employee business capabilities[93] - The company has outlined a need for talent acquisition and retention strategies to support its expanding business operations and mitigate potential talent risks[54] - The company actively applies for national and regional talent policies to ensure long-term stability of its workforce[199] Shareholding Changes - The company reported a significant increase in shareholding for the chairman, from 119,400,452 to 167,160,633 shares, reflecting a change of 47,760,181 shares due to capital reserve conversion[50] - The vice chairman's shareholding increased from 13,871,669 to 14,098,317 shares, with a change of 226,648 shares attributed to capital reserve conversion and secondary market reduction[50] - The total number of shares held by the independent directors remained unchanged at 0, indicating no new share acquisitions during the reporting period[53] Audit and Financial Controls - The company appointed KPMG Huazhen LLP as the domestic accounting firm with an audit fee of 1,000,000 RMB for a term of 4 years[135] - The company also engaged KPMG as the overseas accounting firm with an audit fee of 1,500,000 RMB for a term of 4 years[135] - The internal control audit was conducted by KPMG Huazhen LLP with a fee of 500,000 RMB[135] - The company guarantees the authenticity, accuracy, and completeness of the annual report, with no false records or misleading statements[142] Board and Governance Meetings - The company has not reported any dissenting opinions from the board regarding company matters during the reporting period[81] - The company has not identified any risks during the supervisory review by the board of supervisors[84] - The company’s board meetings held on March 30, April 27, August 30, and October 30, 2023, all passed relevant proposals[76] - The board of directors has approved a new five-year strategic plan focusing on innovation and market leadership[58] - The company has successfully passed all resolutions during the annual general meeting held on June 9, 2023[44]

Financial Performance - For the year ended December 31, 2023, the company reported revenue of RMB 2,376,487 thousand, representing a 4.8% increase from RMB 2,267,971 thousand in 2022[2] - Gross profit for the same period was RMB 979,393 thousand, a decrease of 9.4% compared to RMB 1,081,428 thousand in the previous year[2] - Net profit for the year was RMB 391,553 thousand, down 63.5% from RMB 1,073,200 thousand in 2022[2] - The profit attributable to equity shareholders of the company was RMB 396,993 thousand, a decline of 63.0% from RMB 1,074,257 thousand in the prior year[2] - Basic earnings per share for 2023 were RMB 0.53, down from RMB 1.44 in 2022[5] - The company reported a significant decrease in operating profit to RMB 513,162 thousand, down from RMB 1,246,275 thousand in the previous year[3] - The total operating expenses for 2023 were RMB 634,133,000, compared to RMB 558,665,000 in 2022, reflecting an increase of 13.5%[24] - The company's net profit decreased by 63.5% from RMB 1,073.2 million for the year ended December 31, 2022, to RMB 391.6 million for the year ended December 31, 2023, with a net profit margin dropping from 47.3% to 16.5%[68] - Gross profit fell by 9.4% from RMB 1,081.4 million to RMB 979.4 million due to intensified market competition[68] Revenue Breakdown - Non-clinical research services generated revenue of RMB 2,308,999,000 in 2023, compared to RMB 2,213,598,000 in 2022, indicating a growth of about 4.3%[13] - Clinical trial and related services revenue increased to RMB 63,424,000 in 2023 from RMB 49,568,000 in 2022, reflecting a growth of approximately 27.8%[13] - Revenue from external customers in China decreased to RMB 1,797,730,000 in 2023 from RMB 1,885,205,000 in 2022, representing a decline of 4.6%[20] - Revenue from external customers in the United States increased significantly to RMB 566,271,000 in 2023, up 58.5% from RMB 356,892,000 in 2022[20] Assets and Liabilities - The company's total assets as of December 31, 2023, were RMB 8,559,794 thousand, slightly up from RMB 8,519,954 thousand in 2022[6] - The net asset attributable to equity shareholders was RMB 8,279,316 thousand, an increase of 1.2% from RMB 8,183,701 thousand in the previous year[2] - As of December 31, 2023, the cash and cash equivalents were RMB 2,862.9 million, a decrease of 1.8% from RMB 2,916.8 million as of December 31, 2022[70] - The equity-to-debt ratio decreased to 17.4% as of December 31, 2023, from 21.0% as of December 31, 2022, mainly due to a reduction in contract liabilities[71] Research and Development - Research and development expenses increased to RMB 96,854 thousand from RMB 77,985 thousand in 2022, reflecting a focus on innovation[3] - R&D expenses for the year ended December 31, 2023, were RMB 96.9 million, a 24.2% increase from RMB 78.0 million in the previous year, reflecting continued investment in R&D[65] Dividends and Shareholder Returns - Proposed final cash dividend per ordinary share for 2023 is RMB 0.16, down from RMB 0.40 in 2022, totaling RMB 119,977 thousand compared to RMB 214,258 thousand in 2022[30] - Final cash dividend approved and paid for the previous fiscal year was RMB 0.40 per ordinary share, totaling RMB 214,244 thousand, an increase from RMB 137,363 thousand in 2022[31] Operational Developments - The company aims to expand its market presence and enhance its service offerings in the contract research organization sector[8] - The company has implemented organizational restructuring to enhance management efficiency and support business development needs[39] - The construction of the Suzhou Phase II facility, covering 20,000 square meters, has been completed, enhancing the company's business throughput and supporting future growth[40] - A new 22,000 square meter supporting facility in Suzhou is under construction, expected to be completed and gradually put into use by 2024[40] Strategic Goals and Future Plans - The company aims to enhance its market share and international influence in the non-clinical pharmacology and toxicology evaluation business while expanding upstream and downstream capabilities[73] - Plans for 2024 include improving pharmacology and toxicology research capabilities and enhancing project management efficiency[74] - The company intends to actively recruit industry experts with overseas experience to strengthen its domestic team's international business capabilities[75] - The company plans to implement stock incentive programs to support its strategic goals and enhance employee motivation and productivity[75] Compliance and Audit - The audit committee has reviewed the financial statements for the year ending December 31, 2023, and confirmed compliance with relevant accounting standards and regulations[96] - The auditors, KPMG, have agreed that the financial figures in the preliminary announcement align with the audited consolidated financial statements for the year[97]

Financial Performance - The company's operating revenue for Q3 2023 was RMB 575,002,491.20, representing a year-on-year increase of 15.11%[8] - The net profit attributable to shareholders for Q3 2023 was RMB 236,971,204.96, a decrease of 9.18% compared to the same period last year[8] - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 234,201,796.98, down 10.04% year-on-year[8] - The comprehensive income total for Q3 2023 was RMB 336,381,200.67, compared to RMB 666,161,460.87 in the same period last year[25] - Operating revenue for Q3 2023 reached ¥1,587,079,779.38, an increase from ¥1,276,392,981.45 in Q3 2022, representing a growth of approximately 24.4%[52] - Operating profit for Q3 2023 was ¥392,084,940.00, a decrease from ¥717,775,641.91 in the same period last year, showing a decline of about 45.4%[53] Assets and Liabilities - The company's total assets at the end of Q3 2023 were RMB 10,232,670,064.53, a decrease of 1.27% from the end of the previous year[7] - As of September 30, 2023, the total current assets amounted to approximately RMB 7.25 billion, an increase from RMB 5.93 billion at the end of 2022, reflecting a growth of 22.3%[44] - The total liabilities decreased to approximately RMB 1.99 billion from RMB 2.17 billion at the end of 2022, indicating a reduction of about 8.2%[49] - The total assets as of September 30, 2023, were approximately RMB 10.23 billion, a slight decrease from RMB 10.36 billion at the end of 2022[49] - The company's equity attributable to shareholders increased to approximately RMB 8.23 billion from RMB 8.18 billion at the end of 2022, showing a growth of about 0.6%[49] Cash Flow - The net cash flow from operating activities for Q3 2023 was RMB 448,440,218.42, a decrease of 42.38%[7] - The net cash flow from operating activities for the first three quarters of 2023 was ¥448,440,218.42, a decrease of 42.38% compared to ¥778,288,380.46 in the same period of 2022[30] - The total cash inflow from operating activities was ¥1,874,131,001.01, down from ¥2,085,281,684.08 in the previous year, reflecting a decline of approximately 10.13%[30] - The total cash outflow from operating activities was ¥1,425,690,782.59, compared to ¥1,306,993,303.62 in the previous year, indicating an increase of approximately 9.05%[30] - The company experienced a decrease in cash received from investment activities, totaling ¥528,639,464.14, down from ¥788,066,438.90 in the previous year[30] - The company's financing activities resulted in a net cash outflow of -¥333,289,197.75, compared to -¥86,387,525.79 in the same period last year[30] Profitability and Expenses - The weighted average return on equity for Q3 2023 was 2.88%, a decrease of 4.51% compared to the same period last year[7] - Total operating costs amounted to ¥1,104,837,171.01, up from ¥810,012,663.71, indicating a rise of about 36.3%[53] - Research and development expenses increased to ¥77,639,680.27 from ¥50,053,890.87, reflecting a growth of approximately 55.2%[53] - Other income for the quarter was ¥235,928.52, significantly lower than ¥14,635,576.11 in Q3 2022, indicating a decrease of approximately 98.4%[53] - The fair value change loss was ¥-108,513,934.09, contrasting with a gain of ¥235,768,268.74 in the previous year, marking a significant shift[53] - The company reported a net credit impairment loss of ¥-3,187,147.18, down from ¥-4,597,870.22, indicating an improvement in credit quality[53] Business Operations - The laboratory services business contributed a net profit of RMB 30,886.27 million, showing a growth of 16.03% year-on-year[10] - The financial management income contributed RMB 10,307.35 million to net profit[10] - The fair value changes of biological assets resulted in a net loss of RMB 10,084.80 million[10] - The company plans to focus on expanding its market presence and developing new products in response to the current industry challenges[40] - The company plans to focus on market expansion and new product development in the upcoming quarters[52] - The group signed new orders amounting to approximately RMB 1.8 billion during the reporting period, with a total backlog of approximately RMB 3.66 billion as of the end of the reporting period[40] Shareholder Information - The total number of common shareholders at the end of the reporting period was 56,937, indicating a diverse shareholder base[36] - The basic earnings per share decreased by 47.62% year-on-year, reflecting the impact of fair value losses on biological assets[33] - The cash and cash equivalents at the end of the period were ¥2,891,274,796.93, slightly down from ¥2,899,469,580.53 at the beginning of the period[32] - The inventory as of September 30, 2023, was approximately RMB 2.12 billion, down from RMB 2.19 billion at the end of 2022, reflecting a decrease of about 3.3%[44] - The company reported a decrease in accounts payable to approximately RMB 67.95 million from RMB 127.31 million at the end of 2022, a reduction of about 46.5%[49] - The company has not classified any non-recurring gains and losses as regular gains and losses, confirming adherence to regulatory definitions[50]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 因 本 公 告 全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 JOINN LABORATORIES (CHINA) CO., LTD. 北京昭衍新藥研究中心股份有限公司 （於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司） （股 份 代 號：6127） 2023年度第三季度報告 本公告乃根據香港聯合交易所有限公司證券上市規則第13.09(2)條及第13.10B 條以及香港法例第571章證券及期貨條例第XIVA項 下 的 內 幕 消 息 條 文 而 作 出。 下文為北京昭衍新藥研究中心股份有限公司（「本公司」，連 同 其 附 屬 公 司 統 稱 「本集團」）於2023年財政年度的第三季度報告（「2023年度第三季度報告」）。本 公 告 及 隨 附 的 財 務 報 表 最 初 以 中 文 編 製，並 以 中 英 文 版 本 刊 登。如 中 英 文 版 本 出 現 任 何 歧 義 或 衝 ...

Financial Performance - The company reported a revenue of RMB 1.2 billion for the first half of 2023, representing a year-on-year increase of 15%[20]. - Revenue for the six months ended June 30, 2023, was RMB 1,012,077 thousand, representing a 30.3% increase from RMB 776,881 thousand in the same period of 2022[25]. - Gross profit for the same period was RMB 447,799 thousand, an increase of 18.5% compared to RMB 377,942 thousand in 2022[25]. - Net profit for the period decreased by 75.8% to RMB 89,508 thousand from RMB 370,384 thousand in the previous year[25]. - The profit margin for the period was 8.8%, down 38.9 percentage points from 47.7% in 2022[25]. - Basic earnings per share for the period was RMB 0.17, a decrease of 75.7% from RMB 0.70 in the previous year[25]. - The company achieved operating revenue of RMB 1.012 billion, representing a year-on-year growth of 30.27%[26]. - The total comprehensive income for the period was RMB 102,760 thousand, compared to RMB 388,471 thousand, a decrease of 73.5%[123]. - Operating profit decreased significantly to RMB 120,296 thousand from RMB 437,225 thousand, a decline of 72.5%[121]. Market Expansion and Strategy - The company is expanding its market presence in Southeast Asia, targeting a 25% market share by the end of 2024[20]. - The company is focusing on expanding its market presence and enhancing its research and development capabilities[25]. - The company plans to enhance its non-clinical service range and expand facilities, focusing on areas with high industry demand such as large molecule bioanalysis and cell and gene therapy[46]. - The company aims to enhance its existing leadership position through acquisitions in the pharmaceutical R&D value chain[49]. - The company is exploring potential mergers and acquisitions to strengthen its competitive position in the industry[134]. Research and Development - New product development includes the launch of three innovative drug testing services, projected to contribute an additional RMB 300 million in revenue[20]. - R&D expenditure for the six months ended June 30, 2023, was RMB 569 million, an increase of 123.4% compared to RMB 255 million for the same period in 2022[41]. - The company has been actively involved in research and development, focusing on enhancing its contract research organization services[134]. - The company is enhancing its capabilities in non-clinical evaluation and clinical trial services to meet diverse market demands[29][30]. Employee Engagement and Incentives - The company plans to implement a new employee stock ownership plan to enhance employee engagement and retention[20]. - The company has adopted stock option and restricted share incentive plans from 2018, 2019, and 2020 to attract and retain talent[58]. - The total number of participants in the 2021 A-share restricted stock incentive plan is 505, all of whom are core technical personnel[84]. - The company aims to align the incentives with performance achievements, with unexercised options being subject to buyback or cancellation if performance conditions are not met[68]. Financial Position and Assets - Total assets as of June 30, 2023, were RMB 10,219,310 thousand, a decrease of 1.4% from RMB 10,364,216 thousand at the end of 2022[25]. - Total liabilities increased by 1.0% to RMB 2,195,250 thousand from RMB 2,173,350 thousand at the end of 2022[25]. - Cash and cash equivalents as of June 30, 2023, were RMB 3,040.5 million, a 4.2% increase from RMB 2,916.8 million at the end of 2022, maintaining strong liquidity[42]. - The company reported a total of 3,389,000 stock options granted under equity-settled share-based transactions as of June 30, 2023[187]. Sustainability and Corporate Governance - The company is focusing on sustainability initiatives, with a goal to reduce carbon emissions by 20% by 2025[20]. - The company has complied with the corporate governance code during the six months ending June 30, 2023[106]. - There were no major litigations or arbitrations involving the group as of June 30, 2023[109]. Operational Developments - The construction of a new facility in Suzhou, covering 20,000 square meters, is underway, with 12,000 square meters expected to be operational in the second half of 2023[28]. - The company plans to construct a new facility in Guangzhou, with an investment of RMB 898.5 million, expected to be completed by the end of 2023[115]. - The company has established a stable technical team and has begun operations in drug quality research and testing, focusing on innovative drugs such as protein drugs and therapeutic vaccines[32]. Shareholder Information - The board does not recommend the payment of an interim dividend for the six months ended June 30, 2023[51]. - As of June 30, 2023, the company has a total of 535,678,676 issued shares, including 450,682,100 A shares and 84,996,576 H shares[53]. - Major shareholders include UBS Group AG with 9,289,904 H shares, representing approximately 10.93% of H shares[55].

Financial Performance - The company reported a revenue of 500 million RMB for the first half of 2023, representing a year-on-year increase of 20%[12] - The net profit attributable to shareholders for the same period was 100 million RMB, up 15% compared to the previous year[12] - The company's operating revenue for the first half of 2023 reached ¥1,012,077,288.18, representing a 30.27% increase compared to ¥776,881,166.02 in the same period last year[34] - The net profit attributable to shareholders of the listed company decreased by 75.58% to ¥90,627,154.09 from ¥371,119,594.26 year-on-year[34] - The net profit attributable to shareholders after deducting non-recurring gains and losses fell by 77.72% to ¥76,886,466.41 compared to ¥345,120,940.60 in the previous year[34] - The net cash flow from operating activities decreased by 54.86% to ¥246,209,748.37 from ¥545,493,427.60 in the same period last year[34] - Basic earnings per share for the first half of 2023 decreased by 75.71% to RMB 0.17 compared to the same period last year[53] - The net profit for the first half of 2023 is 89,508,170.24, a decrease from 370,384,259.65 in the same period last year, representing a decline of approximately 76.1%[142] - The total profit for the first half of 2023 is 116,935,671.75, down from 435,147,886.36 in the previous year, indicating a decrease of about 73.1%[142] - The company reported an operating profit of 116,839,105.61, compared to 420,659,608.41 in the prior year, reflecting a decline of approximately 72.2%[142] Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share by the end of 2024[12] - The company is exploring potential acquisitions to enhance its capabilities in biopharmaceuticals, with a budget of 200 million RMB for strategic investments[12] - Future guidance indicates a projected revenue growth of 15-20% for the full year 2023[12] Research and Development - New product development includes three innovative drug candidates expected to enter clinical trials by Q4 2023[12] - The company has allocated 50 million RMB for R&D in the next six months, focusing on enhancing drug efficacy and safety[12] - The company has established a comprehensive biological evaluation support platform for early drug development, including in vitro and in vivo efficacy screening[41] - The company aims to provide a one-stop early clinical research solution to clients, covering various innovative drug types[41] - The company is focusing on enhancing its evaluation capabilities for innovative drugs, particularly in areas like monoclonal antibodies and gene therapy[69] - The company has developed a systematic drug discovery and evaluation capability to improve drug innovation efficiency[96] Operational Efficiency - The company aims to improve operational efficiency by 10% through digital transformation initiatives by the end of 2023[12] - The company has established a one-stop service from non-clinical safety evaluation to clinical trials to meet diverse customer needs[69] - The company has implemented a new service model and advantages in project organization management, ensuring efficient completion of trials[96] Environmental Commitment - The company is committed to environmental protection, ensuring compliance with pollution discharge standards and promoting clean production[121] - The company has committed to improving its environmental practices, including the upgrade of wastewater treatment facilities and promoting energy-saving behaviors among employees[125][126] - The company has not faced any administrative penalties related to environmental issues during the reporting period[143] - The company has implemented measures to reduce carbon emissions, such as encouraging employees to turn off lights and print double-sided[126] Assets and Liabilities - The total assets at the end of the reporting period were ¥10,219,310,035.05, a decrease of 1.40% from ¥10,364,215,494.62 at the end of the previous year[34] - The total liabilities amounted to ¥2,195,249,646.67, slightly up from ¥2,173,349,441.47 year-on-year[110] - The total equity attributable to shareholders decreased to ¥8,018,014,677.35 from ¥8,183,701,358.27 in the previous year[110] Shareholder Information - The number of shares held by the top ten shareholders included 119,400,452 shares held by Feng Yuxia, representing 22.29% of total shares[159] - The company has issued a total of 20.5 million A-shares and 43.32 million H-shares in its public offerings[179] - The company’s H-shares were listed on the Hong Kong Stock Exchange at a price of HKD 151.00 per share[179] Cash Flow and Investments - The net cash flow from operating activities was $246.21 million, a decrease of 54.9% compared to $545.49 million in the previous period[169] - Total cash outflow from operating activities amounted to $1.02 billion, up from $736.03 million year-over-year[169] - Cash inflow from investment activities totaled $326.80 million, down 47% from $616.18 million in the previous period[169] - The net cash flow from investment activities was -$42.31 million, an improvement from -$941.25 million year-over-year[169] - Cash inflow from financing activities was $32.74 million, compared to $0 in the previous period[169] - The net cash flow from financing activities was -$93.60 million, a decline from a positive $18.80 million in the previous period[169]

Financial Performance - For the six months ended June 30, 2023, the company reported revenue of RMB 1,012,077 thousand, representing a 30.3% increase from RMB 776,881 thousand in the same period of 2022[2] - Gross profit for the same period was RMB 447,799 thousand, up 18.5% from RMB 377,942 thousand year-on-year[2] - The company's net profit for the period was RMB 89,508 thousand, a significant decrease of 75.8% compared to RMB 370,384 thousand in the prior year[2] - The profit attributable to equity shareholders of the company was RMB 90,627 thousand, down 75.6% from RMB 371,120 thousand in the previous year[2] - The total comprehensive income for the period was RMB 102,760 thousand, compared to RMB 388,471 thousand in the same period last year[3] - Basic earnings per share for the period was RMB 0.17, down from RMB 0.70 in the same period last year[4] - The company reported a net profit of RMB 90,627,000 for the six months ended June 30, 2023, compared to RMB 371,120,000 for the same period in 2022, showing a significant decrease[29] - The company reported other income and losses of RMB 99.8 million, a decrease of 17.1% from RMB 120.4 million in the prior year[57] - The company experienced a loss of RMB 198.8 million from changes in the fair value of biological assets, compared to a gain of RMB 131.3 million in the previous year[58] - The company reported a decrease in interest income to RMB 60,861,000 for the six months ended June 30, 2023, down from RMB 68,683,000 in the same period of 2022, a decline of approximately 11.8%[24] Revenue Breakdown - Non-clinical research services generated revenue of RMB 976,681 thousand, up from RMB 755,335 thousand, reflecting a growth of 29.3%[11] - Revenue from clinical trial and related services was RMB 31,332 thousand for the six months ended June 30, 2023, compared to RMB 19,839 thousand for the same period in 2022, indicating a growth of 57.5%[11] - Sales of experimental models generated revenue of RMB 4,064 thousand, significantly up from RMB 1,707 thousand, marking an increase of 138.5%[11] - Revenue from external customers for the six months ended June 30, 2023, was RMB 1,012,077,000, compared to RMB 776,881,000 for the same period in 2022, indicating a year-over-year increase of about 30.2%[20] - Revenue from the China region for the six months ended June 30, 2023, was RMB 722,607,000, up from RMB 605,540,000 in 2022, reflecting a growth of approximately 19.4%[20] - Non-clinical research services accounted for 96.5% of total revenue, generating RMB 976.7 million, up from RMB 755.3 million in the previous year[54] Assets and Liabilities - The company's total assets less current liabilities stood at RMB 8,318,912 thousand as of June 30, 2023, compared to RMB 8,519,954 thousand at the end of 2022[6] - The net asset attributable to equity shareholders was RMB 8,018,014 thousand, an increase of 8.4% from RMB 7,398,296 thousand at the end of 2022[2] - Total liabilities as of June 30, 2023, were RMB 1,792,236,000, a slight decrease from RMB 1,880,102,000 as of December 31, 2022[21] - The company reported a decrease in cash and cash equivalents to RMB 3,040,541 thousand from RMB 2,916,848 thousand at the end of 2022[5] - The company's financial assets at fair value through profit or loss totaled RMB 725,674,000 as of June 30, 2023, down from RMB 894,394,000 at the end of 2022[35] - Trade receivables, net of loss provisions, were RMB 162,568,000 as of June 30, 2023, compared to RMB 199,437,000 at the end of 2022[37] - Trade payables decreased to RMB 49,150,000 as of June 30, 2023, from RMB 127,309,000 at the end of 2022[39] Expenses and Costs - Employee costs, including salaries and benefits, increased to RMB 264,758,000 for the six months ended June 30, 2023, from RMB 220,318,000 in 2022, representing a rise of about 20.1%[23] - General and administrative expenses for the six months ended June 30, 2023, were RMB 159.7 million, a 0.6% increase from RMB 158.8 million for the same period in 2022[60] - Research and development expenses for the six months ended June 30, 2023, were RMB 56.9 million, a 123.4% increase from RMB 25.5 million for the same period in 2022, primarily due to continued investment in R&D[61] - Sales and marketing expenses increased by 45.0% to RMB 11.9 million, up from RMB 8.2 million in the same period last year[59] - The company's service costs for the same period were RMB 564.3 million, reflecting a 41.4% increase from RMB 398.9 million in 2022[55] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new product development to drive future growth[19] - The company aims to maintain high standards in existing experimental models and provide non-human primate disease models for pharmacological research[48] - The company aims to expand its global footprint and enhance service capabilities, leveraging the acquisition of Biomere to strengthen its presence in the North American pharmaceutical market[70] - The company plans to expand its clinical trial services through internal growth and collaborations with other clinical trial participants, focusing on early clinical trials[71] - The company is seeking selective acquisitions to enhance its service offerings, particularly in non-clinical research and clinical contract research organizations[74] Governance and Compliance - The company has adopted corporate governance codes in compliance with the Hong Kong Stock Exchange's listing rules and has adhered to these standards as of June 30, 2023[75] - The company has implemented a set of rules for directors' securities trading, confirming compliance with the standards as of June 30, 2023[76] Future Outlook - The management anticipates that most of the transaction prices allocated to unfulfilled contracts will be recognized within three years from the reporting period end[12] - The company aims to attract and recruit skilled professionals with international experience and scientific expertise to support global expansion, particularly in the US market[72] - The company plans to enhance non-clinical service capabilities and expand facilities, including a new 20,000 square meter facility in Suzhou, with 12,000 square meters currently under construction[69] - The company intends to hire approximately 220 experienced clinical trial operation professionals by the end of 2024 to focus on early clinical trial projects[80] - Investment in business development to continuously grow the clinical trial business is planned, with an allocation of RMB 21.2 million by the end of 2024[80]

Stock Options and Restricted Share Units - As of December 31, 2022, the total number of stock options available for issuance under the 2019 stock option and restricted share incentive plan is 40,926, accounting for 0.008% of the issued shares[1] - The total number of restricted share units available for issuance under the 2020 stock option plan is 1,420,020, representing 0.27% of the issued shares[2] - The total number of restricted share units available for issuance under the 2021 A-share restricted stock incentive plan is 512,820, with no units available for issuance as of December 31, 2022[3] - The company has a total of 3,293 restricted share units available for issuance, accounting for 0.0006% of the issued shares[2] - The exercise price for the restricted share units has been adjusted due to the issuance of bonus shares in August 2022, with a fair value of RMB 12.91 per unit[3] - No restricted share units were exercised during the reporting period[3] - The company issued 4 bonus shares for every 10 shares held in August 2022, impacting the number of available restricted share units[3] Board of Directors - The board of directors includes the chairman and executive director Feng Yuxia, along with other executive and independent directors[4] Annual Report Information - The company reported no changes to other information contained in the 2022 annual report[4]

Financial Performance - The net profit attributable to shareholders increased by 49.79% year-on-year, driven by both the net profit excluding non-recurring gains and losses and the growth of non-recurring gains and losses[6]. - The net profit from laboratory services reached RMB 70.12 million, representing a year-on-year growth of 33.79% compared to RMB 52.41 million in the same period last year[13]. - The net profit excluding non-recurring gains and losses grew by 39.56% year-on-year[13]. - The net profit attributable to shareholders for Q1 2023 was CNY 187,759,654.85, reflecting a growth of 49.79% compared to the same period last year[33]. - Net profit for Q1 2023 was CNY 187,710,078.62, compared to CNY 124,879,519.42 in Q1 2022, indicating a 50.3% year-over-year growth[49]. - The total comprehensive income for Q1 2023 was CNY 183,307,433.87, compared to CNY 123,848,015.54 in Q1 2022, marking an increase of about 47.9%[50]. - Basic earnings per share for Q1 2023 were CNY 0.35, an increase of 45.83% year-on-year[33]. - Basic and diluted earnings per share for Q1 2023 were both CNY 0.35, compared to CNY 0.24 in Q1 2022, reflecting a year-over-year increase of about 45.8%[50]. Revenue and Costs - The company's operating revenue for Q1 2023 was CNY 369,386,010.95, representing a year-on-year increase of 36.32%[33]. - Total revenue for Q1 2023 reached CNY 369,386,010.95, a 36.3% increase from CNY 270,975,486.87 in Q1 2022[47]. - Total operating costs for Q1 2023 were CNY 262,811,341.25, up from CNY 178,514,884.87 in Q1 2022, reflecting a significant increase in operational expenses[49]. - Research and development expenses for Q1 2023 amounted to CNY 27,611,585.58, significantly higher than CNY 12,289,064.34 in Q1 2022, highlighting the company's commitment to innovation[49]. Assets and Liabilities - The total assets at the end of Q1 2023 amounted to CNY 10,548,083,755.28, a 1.77% increase from the end of the previous year[34]. - The total assets increased to CNY 10,548,083,755.28 from CNY 10,364,215,494.62, showing a growth of 1.8%[46]. - The total liabilities rose to CNY 2,185,937,338.52, compared to CNY 2,173,349,441.47, reflecting a 0.6% increase[47]. - The company's equity attributable to shareholders increased to CNY 8,355,031,298.11 from CNY 8,183,701,358.27, representing a growth of 2.1%[47]. Cash Flow - The net cash flow from operating activities for Q1 2023 was -CNY 13,668,184.06, a decrease of 118.25% compared to the previous year[33]. - Cash flow from operating activities for Q1 2023 was CNY 613,167,483.43, slightly up from CNY 607,592,750.32 in Q1 2022, indicating a growth of approximately 0.9%[50]. - The ending balance of cash and cash equivalents as of the end of Q1 2023 was CNY 2,961,151,889.94, down from CNY 4,320,056,146.25 at the end of Q1 2022[52]. - The cash inflow from financing activities in Q1 2023 included CNY 30,758,211.00 from investment received, while cash outflow for debt repayment was CNY 861,696.20[52]. - The impact of exchange rate changes on cash and cash equivalents for Q1 2023 was -CNY 6,273,367.27, compared to -CNY 3,212,750.12 in Q1 2022[52]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 53,574[19]. - The largest shareholder, Feng Yuxia, holds 22.29% of the shares, totaling 119,400,452 shares[19]. Non-Recurring Gains and Losses - Non-recurring gains and losses amounted to RMB 3.01 million, with specific contributions including government subsidies of RMB 4.05 million[17]. - Non-recurring gains and losses included a loss from the disposal of non-current assets amounting to -CNY 51,902.64[36]. Future Outlook - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[48]. - The company has seen a significant month-on-month improvement in new orders signed as of the report date[21]. - New orders signed during the period were approximately RMB 570 million, a year-on-year decrease of about 43%, with a backlog of orders totaling approximately RMB 4.6 billion[21].