[Company Information and Declarations](index=1&type=section&id=Company%20Information%20and%20Declarations) This section provides an overview of the company's listing characteristics, disclaimer, corporate profile, holding structure, and the basis of financial statement preparation and accounting policies [GEM Listing Characteristics and Disclaimer](index=1&type=section&id=GEM%20Listing%20Characteristics%20and%20Disclaimer) The company is listed on GEM of the HKEX, a market for SMEs with higher investment risks, requiring careful consideration from investors - GEM market positions itself as a listing platform for small and medium-sized companies, carrying relatively higher investment risks, with securities potentially subject to significant market fluctuations and no guarantee of high liquidity[67](index=67&type=chunk) - This announcement's information is published in compliance with the GEM Listing Rules, with the Board jointly and severally assuming full responsibility for its accuracy, completeness, and absence of misleading or fraudulent content[57](index=57&type=chunk) [Company Profile and Holding Structure](index=8&type=section&id=Company%20Profile%20and%20Holding%20Structure) China Biotech Services Holdings Limited, incorporated in Cayman Islands and re-domiciled in Bermuda, is listed on GEM, primarily engaged in medical biological testing, oncology immunotherapy, healthcare product sales, and insurance brokerage services, with Mr. Liu Xiaolin as the ultimate controlling party - The Company was incorporated in the Cayman Islands, subsequently re-domiciled in Bermuda, and its shares are listed on GEM of The Stock Exchange of Hong Kong[89](index=89&type=chunk) - Principal businesses include medical biological laboratory testing and health check services in Hong Kong, oncology immunotherapy and health management services in China, sales of healthcare-related and pharmaceutical products in China and Hong Kong, and insurance brokerage services[77](index=77&type=chunk) - The ultimate holding company is Genius Earn Limited, and the ultimate controlling person is Mr. Liu Xiaolin[77](index=77&type=chunk) [Basis of Preparation and Accounting Policies](index=8&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The consolidated financial statements are prepared in accordance with HKFRSs issued by the HKICPA and comply with GEM Listing Rules and Hong Kong Companies Ordinance disclosure requirements - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and comply with the disclosure requirements of the GEM Listing Rules and the Hong Kong Companies Ordinance[90](index=90&type=chunk) - The Group first adopted several new and amended Hong Kong Financial Reporting Standards during the year, which did not result in changes to accounting policies or retrospective adjustments[78](index=78&type=chunk)[91](index=91&type=chunk) - The Group has assessed new and revised HKFRSs issued but not yet effective, expecting their adoption is unlikely to have any significant impact on the consolidated financial statements[92](index=92&type=chunk)[100](index=100&type=chunk) [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) This section presents a summary of the Group's consolidated financial performance, including the statement of profit or loss, financial position, and changes in equity for the reporting period [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2022, the Group recorded significant financial growth, with substantial increases in revenue, gross profit, and profit for the year, primarily driven by surging demand for COVID-19 testing services Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Proceeds | 1,851,601 | 623,761 | 1,227,840 | 196.85% | | Revenue | 1,851,532 | 623,761 | 1,227,771 | 196.83% | | Cost of Sales | (750,575) | (265,741) | (484,834) | 182.45% | | Gross Profit | 1,100,957 | 358,020 | 742,937 | 207.51% | | Operating Profit | 851,707 | 189,678 | 662,029 | 349.03% | | Profit Before Tax | 862,826 | 180,668 | 682,158 | 377.59% | | Profit for the Year | 705,568 | 132,572 | 572,996 | 432.22% | | Profit Attributable to Owners of the Company | 258,087 | 19,385 | 238,702 | 1231.46% | | Total Comprehensive Income for the Year | 654,250 | 164,138 | 490,112 | 298.60% | - The significant increase in profit for the year was primarily attributable to the immense demand for rapid antigen test kits and testing services during the fifth wave of the COVID-19 pandemic, and increased demand for testing services from cross-boundary travelers after border restrictions were eased[228](index=228&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's total assets and liabilities both increased significantly, with a higher gearing ratio but a healthy current ratio, driven by pledged bank deposits, prepayments, trade payables, and current tax liabilities Consolidated Statement of Financial Position Key Data | Indicator | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,470,491 | 706,782 | 763,709 | 108.05% | | Total Liabilities | 643,971 | 240,887 | 403,084 | 167.34% | | Total Equity | 826,520 | 465,895 | 360,625 | 77.40% | | Gearing Ratio | 43.79% | 34.08% | +9.71% | - | | Current Ratio | 1.61 times | 1.22 times | +0.39 times | - | | Cash and Bank Balances | 92,770 | 150,554 | (57,784) | -38.38% | - Cash and bank balances decreased by approximately **HK$57,784,000**, primarily used for dividend payments to non-controlling shareholders of subsidiaries and prepayments for Boron Neutron Capture Therapy equipment[10](index=10&type=chunk) - Trade and other receivables significantly increased from **HK$105,939 thousand in 2021 to HK$765,547 thousand in 2022**, mainly reflecting the growth in business volume[62](index=62&type=chunk) [Consolidated Statement of Changes in Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended December 31, 2022, both equity attributable to owners of the Company and non-controlling interests increased, driven by total comprehensive income for the year and contributions from non-controlling interests, while share purchases under the share award scheme and dividend payments also impacted equity Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2022 (HK$ Thousand) | Total Comprehensive Income for the Year (HK$ Thousand) | Dividends Paid to Non-controlling Shareholders of Subsidiaries (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 395,398 | 211,489 | - | 602,675 | | Non-controlling Interests | 70,497 | 442,761 | (300,000) | 223,845 | | Total Equity | 465,895 | 654,250 | (300,000) | 826,520 | - Total comprehensive income for the year was **HK$654,250 thousand**, with **HK$211,489 thousand** attributable to owners of the Company and **HK$442,761 thousand** attributable to non-controlling interests[72](index=72&type=chunk)[88](index=88&type=chunk) - Under the Share Award Scheme, the trustee purchased a total of **2,325,000 shares** of the Company at a total consideration of approximately **HK$2,985,000**[24](index=24&type=chunk)[303](index=303&type=chunk) [Notes to the Financial Statements](index=11&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed breakdowns and explanations for various financial statement line items, including revenue, other income, segment information, receivables, payables, and significant transactions [Revenue Breakdown](index=11&type=section&id=Revenue%20Breakdown) The Group's total revenue for 2022 reached HK$1,851,532 thousand, a significant increase from HK$623,761 thousand in 2021, primarily driven by medical biological laboratory testing services and health check services, as well as sales and distribution of healthcare-related and pharmaceutical products, with Hong Kong contributing the vast majority of revenue Revenue by Product Category and Geographical Region | Product/Service Category | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Provision of medical biological laboratory testing services and health check services | 1,619,568 | 607,776 | | Sales and distribution of healthcare-related and pharmaceutical products | 217,179 | 107 | | Provision of insurance brokerage services | 6,933 | 7,922 | | Money lending business | 35 | 1,244 | | Provision of logistics services | 7,817 | 6,712 | | **Total** | **1,851,532** | **623,761** | | **Major Geographical Market (Hong Kong)** | **1,851,331** | **623,761** | - In terms of revenue recognition timing, the majority of revenue (**HK$1,843,715 thousand**) was transferred over time, while a portion (**HK$7,817 thousand**) was transferred at a point in time[94](index=94&type=chunk) [Other Income, Gains/(Losses)](index=12&type=section&id=Other%20Income%2C%20Gains%2F%28Losses%29) The Group's net other income and gains for 2022 amounted to HK$4,639 thousand, a significant increase from HK$225 thousand in 2021, primarily due to government grants and gains from disposal of property, plant and equipment Other Income, Gains/(Losses) Details | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Interest income | 153 | 12 | | Government grants | 3,361 | – | | Gain on disposal of property, plant and equipment | 1,082 | – | | Loss on write-off of property, plant and equipment | (4) | – | | Net exchange losses | (869) | (525) | | COVID-19 related rent concessions | 195 | 156 | | Gain on early termination of leases | – | 11 | | Others | 721 | 571 | | **Total** | **4,639** | **225** | - Government grants of **HK$3,361 thousand** were recognized in 2022, of which **HK$3,228 thousand** related to the Hong Kong Government's "Employment Support Scheme"[85](index=85&type=chunk) [Segment Information](index=12&type=section&id=Segment%20Information) The Group operates six main segments: medical biological laboratory testing and health check services, immunotherapy, pharmaceutical products, securities, insurance brokerage, and Boron Neutron Capture Therapy, along with other businesses (money lending and logistics services) - The Group has six operating segments: medical biological laboratory testing and health check services, immunotherapy, pharmaceutical products, securities, insurance brokerage, Boron Neutron Capture Therapy, and others (money lending business and logistics services)[96](index=96&type=chunk)[103](index=103&type=chunk) - Inter-segment sales and transfers are accounted for at current market prices, and segment profit or loss excludes other income, unallocated administrative expenses, finance costs, etc[97](index=97&type=chunk)[106](index=106&type=chunk) [2022 Segment Performance](index=14&type=section&id=2022%20Segment%20Performance) In 2022, the medical biological laboratory testing services segment significantly outperformed other segments in both revenue and profit, while the immunotherapy and BNCT segments remained in investment and development phases, recording losses 2022 Segment Revenue and Profit | Segment | Revenue from External Customers (HK$ Thousand) | Segment Profit/(Loss) (HK$ Thousand) | | :--- | :--- | :--- | | Medical biological laboratory testing services and health check services | 1,619,568 | 861,298 | | Immunotherapy | - | (40,008) | | Pharmaceutical products | 217,179 | 75,468 | | Securities | - | 1,958 | | Insurance brokerage | 6,933 | (3,258) | | Boron Neutron Capture Therapy | - | (2,779) | | Others | 7,852 | 2,181 | | **Total** | **1,851,532** | **894,860** | - The medical biological laboratory testing services segment contributed the vast majority of the year's revenue and segment profit, reflecting its dominant market position[109](index=109&type=chunk) [2021 Segment Performance](index=15&type=section&id=2021%20Segment%20Performance) In 2021, the medical biological laboratory testing services segment was also the primary source of revenue and profit, though on a much smaller scale than in 2022, with immunotherapy and pharmaceutical products segments also recording losses 2021 Segment Revenue and Profit | Segment | Revenue from External Customers (HK$ Thousand) | Segment Profit/(Loss) (HK$ Thousand) | | :--- | :--- | :--- | | Medical biological laboratory testing services and health check services | 607,776 | 266,305 | | Immunotherapy | - | (42,393) | | Pharmaceutical products | 107 | (1,088) | | Securities | - | (3,163) | | Insurance brokerage | 7,922 | (66) | | Boron Neutron Capture Therapy | - | - | | Others | 7,956 | 1,257 | | **Total** | **623,761** | **220,852** | [Other Segment Information (Capital Expenditure, Depreciation, etc.)](index=16&type=section&id=Other%20Segment%20Information%20%28Capital%20Expenditure%2C%20Depreciation%2C%20etc.%29) In 2022, the Group's total capital expenditure was HK$56,404 thousand, mainly concentrated in medical biological laboratory testing services and BNCT segments, with intangible asset amortization primarily from immunotherapy and depreciation distributed across segments 2022 Other Segment Information | Item | Medical Biological Laboratory Testing Services (HK$ Thousand) | Immunotherapy (HK$ Thousand) | Pharmaceutical Products (HK$ Thousand) | Boron Neutron Capture Therapy (HK$ Thousand) | Others (HK$ Thousand) | Total (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Capital expenditure | 48,793 | 1,436 | 6 | 6,068 | 101 | 56,404 | | Amortisation of intangible assets | - | 8,689 | - | - | - | 8,689 | | Depreciation of property, plant and equipment | 45,552 | 1,181 | 2 | - | 257 | 47,034 | | Depreciation of right-of-use assets | 7,060 | 35 | 201 | 155 | 2,991 | 10,678 | | Impairment loss on goodwill | - | - | - | - | - | 1,716 | | Impairment loss allowance for financial assets | 3,895 | - | - | - | (2,181) | 1,714 | 2021 Other Segment Information | Item | Medical Biological Laboratory Testing Services (HK$ Thousand) | Immunotherapy (HK$ Thousand) | Pharmaceutical Products (HK$ Thousand) | Others (HK$ Thousand) | Total (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Capital expenditure | 12,072 | 120 | - | 24 | 12,216 | | Amortisation of intangible assets | - | 8,994 | - | - | 8,994 | | Depreciation of property, plant and equipment | 44,720 | 1,178 | - | 447 | 46,422 | | Depreciation of right-of-use assets | 7,710 | 343 | 48 | 4,303 | 12,696 | | Impairment loss allowance for financial assets | 426 | - | 90 | (265) | 251 | | Write-down of inventories | 2,630 | - | 569 | - | 3,199 | [Geographical Information and Major Customers](index=17&type=section&id=Geographical%20Information%20and%20Major%20Customers) The Group's revenue is primarily derived from Hong Kong, which contributed HK$1,851,331 thousand in 2022, with non-current assets mainly located in Hong Kong and mainland China, and several major customers contributing over 10% of total revenue, indicating high business concentration Revenue and Non-current Assets by Operating Location | Region | 2022 Revenue (HK$ Thousand) | 2021 Revenue (HK$ Thousand) | 2022 Non-current Assets (HK$ Thousand) | 2021 Non-current Assets (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 1,851,331 | 623,761 | 126,168 | 125,241 | | China (excluding Hong Kong) | 201 | – | 231,848 | 181,746 | | **Total** | **1,851,532** | **623,761** | **358,016** | **306,987** | Revenue from Major Customers (Over 10% of Total Revenue) | Customer | Segment | 2022 Revenue (HK$ Thousand) | 2021 Revenue (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Customer A | Provision of medical biological laboratory testing services and health check services | 900,235 | 127,817 | | Customer B | Provision of medical biological laboratory testing services and health check services | 524,324 | 310,226 | | Customer A | Sales and distribution of healthcare-related and pharmaceutical products | 206,858 | – | | Customer B | Sales and distribution of healthcare-related and pharmaceutical products | 3,816 | – | | Customer B | Provision of logistics services | 7,782 | – | [Finance Costs](index=18&type=section&id=Finance%20Costs) The Group's finance costs for 2022 were HK$3,495 thousand, a significant decrease from HK$6,543 thousand in 2021, primarily due to reduced finance costs from convertible bonds following a partial redemption in 2021 Finance Costs Details | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 751 | 697 | | Interest on other borrowings | – | 504 | | Effective interest on convertible bonds | 2,744 | 5,342 | | **Total** | **3,495** | **6,543** | - The decrease in finance costs was mainly due to the reduction in finance costs arising from convertible bonds, which decreased following the partial redemption of the principal amount of convertible bonds on May 11, 2021[227](index=227&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) The Group's income tax expense for 2022 was HK$157,258 thousand, a substantial increase from HK$48,096 thousand in 2021, with Hong Kong profits tax levied under a two-tiered system and a Chinese subsidiary enjoying a 15% corporate income tax rate as a high-tech enterprise Income Tax Expense Details | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Current tax: Hong Kong profits tax | 158,353 | 49,465 | | Current tax: Under/(over) provision in prior years | 208 | (20) | | Deferred tax | (1,303) | (1,349) | | **Total** | **157,258** | **48,096** | - Hong Kong profits tax is levied under a two-tiered system, with the first **HK$2,000,000** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[146](index=146&type=chunk) - One of the Group's PRC subsidiaries is recognized as a high and new technology enterprise, enjoying a corporate income tax rate of **15%**[147](index=147&type=chunk) [Profit for the Year and Dividends](index=19&type=section&id=Profit%20for%20the%20Year%20and%20Dividends) The Group's profit for 2022 was HK$705,568 thousand, and the Board recommended a final dividend of HK$0.01 per share, totaling approximately HK$9,632 thousand, subject to shareholders' approval Profit for the Year Key Items | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Amortisation of intangible assets | 8,689 | 8,994 | | Depreciation of property, plant and equipment | 47,034 | 46,422 | | Depreciation of right-of-use assets | 10,678 | 12,696 | | Staff costs (including Directors' emoluments) | 166,735 | 99,354 | | Research and development costs | 27,760 | 28,677 | | Auditor's remuneration | 3,350 | 1,100 | | Cost of inventories sold | 351,487 | 56,712 | | Impairment loss allowance for financial assets, net | 1,714 | 251 | - The Board recommended a final dividend of **HK$0.01 per share** for the year ended December 31, 2022, totaling approximately **HK$9,632,000**, subject to shareholders' approval[119](index=119&type=chunk) [Earnings Per Share](index=20&type=section&id=Earnings%20Per%20Share) The Group's basic and diluted earnings per share for 2022 significantly increased to 26.8 HK cents from 2.0 HK cents in 2021, with no assumption of exercise for share options or convertible bonds in diluted EPS calculation due to higher exercise prices or anti-dilutive effects Earnings Per Share Calculation Basis | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Basic and diluted earnings per share (cents) | 26.8 | 2.0 | | Profit for the year used in basic/diluted EPS calculation (HK$ Thousand) | 258,087 | 19,385 | | Weighted average number of ordinary shares used in basic/diluted EPS calculation (Thousand shares) | 963,231 | 964,714 | - The exercise of outstanding share options was not assumed in the calculation of diluted earnings per share because their exercise price was higher than the average market price of the shares[151](index=151&type=chunk) - The conversion of convertible bonds was not assumed in the calculation of diluted earnings per share because their exercise would have an anti-dilutive effect, leading to an increase in earnings per share[151](index=151&type=chunk) [Trade and Other Receivables](index=21&type=section&id=Trade%20and%20Other%20Receivables) The Group's total trade and other receivables significantly increased to HK$817,312 thousand in 2022 from HK$105,939 thousand in 2021, with trade receivables generally having a 90-day credit period and approximately HK$202,643 thousand overdue but not impaired at year-end 2022 Total Trade and Other Receivables | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 751,899 | 92,130 | | Rental and other deposits | 7,142 | 5,851 | | Other receivables (net of allowance) | 1,753 | 2,976 | | Prepayments | 56,515 | 1,570 | | Proceeds from disposal of an associate | – | 1,268 | | Cash held in stock brokerage securities trading accounts | 3 | 2,144 | | **Total** | **817,312** | **105,939** | Ageing Analysis of Trade Receivables (Net of Allowance) | Ageing | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 90 days | 549,256 | 80,062 | | 91 to 180 days | 200,680 | 10,490 | | 181 to 365 days | 1,771 | 1,325 | | Over 365 days | 192 | 253 | | **Total** | **751,899** | **92,130** | - As of December 31, 2022, approximately **HK$202,643,000** of trade receivables were overdue but not impaired, relating to independent customers with no recent history of default[136](index=136&type=chunk)[153](index=153&type=chunk) [Convertible Bonds](index=23&type=section&id=Convertible%20Bonds) The Group undertook significant modifications and new issuances of convertible bonds in 2022, including extending the maturity of the 2020 convertible bonds, which was treated as a significant modification, and subsequently issuing new 2022 convertible bonds partially paid by cancelling 2020 bonds and partially by cash, impacting financial position through fair value changes and interest expenses - The maturity date of the 2020 convertible bonds was extended by two years from May 10, 2022, to May 10, 2024; this modification was treated as a significant modification, leading to derecognition of the original bonds and recognition of the amended bonds, with a recognized loss of **HK$2,027,000**[2](index=2&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - On December 20, 2022, the Company issued **US$10,000,000** (approximately **HK$77,800,000**) in 2022 convertible bonds, with an initial conversion price of **HK$1.45 per share**, an annual interest rate of **8.25%**, and a maturity date two years from the issue date[157](index=157&type=chunk)[268](index=268&type=chunk) - Of the total subscription for the 2022 convertible bonds, **US$5,000,000** was paid by cancelling 2020 convertible bonds, and the remaining **US$4,965,000** was paid in cash; the net proceeds will be used for investment in the Boron Neutron Capture Therapy project (**US$3,000,000**) and R&D costs and general working capital (**US$1,944,000**)[158](index=158&type=chunk)[268](index=268&type=chunk) Changes in Convertible Bond Liability Component | Item | Amount (HK$ Thousand) | | :--- | :--- | | Liability component at January 1, 2021 | 76,292 | | Partial redemption of 2020 convertible bonds | (39,689) | | Liability component at December 31, 2021 | 38,651 | | Extension of 2020 convertible bonds | 3,317 | | Redemption of 2020 convertible bonds | (41,619) | | Issuance of 2022 convertible bonds | 105,492 | | Loss deferred on issue | (26,992) | | Liability component at December 31, 2022 | 55,796 | Changes in Convertible Bond Derivative Component | Item | Assets (HK$ Thousand) | Liabilities (HK$ Thousand) | Total (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Derivative component at January 1, 2021 | (14,234) | 8,597 | (5,637) | | Partial redemption | 6,442 | (4,253) | 2,189 | | Fair value loss/(gain) for the year | 4,230 | (2,309) | 1,921 | | Derivative component at December 31, 2021 | (3,562) | 2,035 | (1,527) | | Extension and redemption of 2020 convertible bonds | (7,618) | 8,008 | 390 | | Fair value loss/(gain) for the year | 11,180 | (10,043) | 1,137 | | Derivative component on issue of 2022 convertible bonds | – | 22,252 | 22,252 | | Derivative component at December 31, 2022 | – | 22,252 | 22,252 | [Contingent Consideration](index=26&type=section&id=Contingent%20Consideration) The Group's contingent consideration is primarily linked to the performance targets of the acquisitions of Shanghai Longyao and Fushi, with a fair value gain of HK$23,658 thousand recognized in 2022, as both companies failed to meet their performance targets, resulting in the contingent consideration being adjusted to zero - The change in fair value of contingent consideration liabilities resulted in a gain of **HK$23,658,000** recognized in the consolidated statement of profit or loss and other comprehensive income for 2022[181](index=181&type=chunk) - Shanghai Longyao's contingent consideration was tied to revenue and net profit targets, and due to non-achievement, the right to related additional award shares has lapsed[161](index=161&type=chunk)[201](index=201&type=chunk) - Fushi's contingent consideration was linked to cumulative net profit targets, and since the actual cumulative profit was negative, the second tranche of consideration was adjusted to zero[185](index=185&type=chunk)[232](index=232&type=chunk) [Trade and Other Payables](index=27&type=section&id=Trade%20and%20Other%20Payables) The Group's total trade and other payables significantly increased to HK$290,045 thousand in 2022 from HK$54,927 thousand in 2021, with the majority of trade payables having an ageing within 90 days Trade and Other Payables Details | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 206,441 | 16,149 | | Accrued expenses | 77,161 | 28,189 | | Receipts in advance | 377 | 281 | | Other payables | 6,066 | 10,308 | | **Total** | **290,045** | **54,927** | Ageing Analysis of Trade Payables | Ageing | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 90 days | 143,915 | 16,147 | | 91 to 180 days | 27,234 | – | | 181 to 365 days | 35,292 | – | | **Total** | **206,441** | **16,149** | [Disposal of Subsidiaries](index=28&type=section&id=Disposal%20of%20Subsidiaries) In 2022, the Group disposed of its entire equity interests in Mingzhu Group and Chaozheng Group, generating gains of HK$590 thousand and HK$1,106 thousand respectively, with the aim of reallocating resources to higher growth potential businesses and saving administrative costs - On April 4, 2022, the Company disposed of its entire equity interest in Mingzhu Group for a cash consideration of **HK$6,400,000**, generating a gain of **HK$590,000**[168](index=168&type=chunk)[189](index=189&type=chunk)[216](index=216&type=chunk)[271](index=271&type=chunk) - On May 31, 2022, the Company disposed of its entire equity interest in Chaozheng Group for a cash consideration of **HK$50,000**, generating a gain of **HK$1,106,000**[170](index=170&type=chunk)[190](index=190&type=chunk)[213](index=213&type=chunk)[218](index=218&type=chunk) - The disposal of Mingzhu Group aimed to reallocate resources to businesses with higher growth potential, while the disposal of Chaozheng Group aimed to save administrative costs[213](index=213&type=chunk)[271](index=271&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's business operations, financial performance, significant developments, and strategic outlook for the reporting period [Business Overview](index=30&type=section&id=Business%20Overview) The Group's principal businesses in 2022 included medical biological laboratory testing and health check services in Hong Kong, oncology immunotherapy and health management services in China, sales and distribution of healthcare-related and pharmaceutical products in China and Hong Kong, and insurance brokerage services - The Group's principal businesses cover medical biological laboratory testing, health check, oncology immunotherapy, health management, sales of healthcare and pharmaceutical products, and insurance brokerage services[172](index=172&type=chunk) [Operating Segment Performance](index=31&type=section&id=Operating%20Segment%20Performance) In 2022, the Group's operating segments showed varied performance, with medical biological laboratory testing services and healthcare product sales experiencing significant revenue growth due to surging COVID-19 testing demand, while insurance brokerage services declined due to travel restrictions, and logistics services grew from increased testing supply demand [Medical Biological Laboratory Testing Services and Health Check Services](index=31&type=section&id=Medical%20Biological%20Laboratory%20Testing%20Services%20and%20Health%20Check%20Services) This segment's turnover reached HK$1,619,568 thousand in 2022, a 1.66-fold year-on-year increase, primarily driven by immense demand for nucleic acid testing services during the fifth wave of the COVID-19 pandemic and its role as a designated service provider at border checkpoints and community testing centers Medical Biological Laboratory Testing Services and Health Check Services Turnover | Year | Turnover (HK$ Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | | 2022 | 1,619,568 | 1.66 times | | 2021 | 607,776 | - | - The significant increase in turnover was mainly due to the surging demand for nucleic acid testing services during the fifth wave of the COVID-19 pandemic and its role as a designated service provider at Shenzhen Bay Port, Hong Kong-Zhuhai-Macao Bridge Hong Kong Port, and community testing centers[40](index=40&type=chunk)[221](index=221&type=chunk) [Sales and Distribution of Healthcare-related and Pharmaceutical Products](index=32&type=section&id=Sales%20and%20Distribution%20of%20Healthcare-related%20and%20Pharmaceutical%20Products) This segment's turnover dramatically increased from HK$107 thousand in 2021 to HK$217,179 thousand in 2022, a 2,028.71-fold growth, primarily driven by the immense market demand for rapid antigen test kits during the fifth wave of the COVID-19 pandemic Sales and Distribution of Healthcare-related and Pharmaceutical Products Turnover | Year | Turnover (HK$ Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | | 2022 | 217,179 | 2,028.71 times | | 2021 | 107 | - | - The significant increase in turnover was mainly due to the severe fifth wave of the COVID-19 pandemic in 2022, leading to immense market demand for rapid antigen test kits[29](index=29&type=chunk) [Insurance Brokerage Services](index=32&type=section&id=Insurance%20Brokerage%20Services) This segment's turnover decreased by 12.48% to HK$6,933 thousand in 2022, primarily due to strict travel restrictions imposed on mainland Chinese customers visiting Hong Kong during the fifth wave of the COVID-19 pandemic Insurance Brokerage Services Turnover | Year | Turnover (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | | 2022 | 6,933 | -12.48% | | 2021 | 7,922 | - | - The decrease in turnover was mainly affected by strict travel restrictions imposed on mainland Chinese customers visiting Hong Kong during the fifth wave of the COVID-19 pandemic[223](index=223&type=chunk) [Securities Trading](index=32&type=section&id=Securities%20Trading) In 2022, the securities trading segment recorded a net gain of approximately HK$2,707 thousand from financial assets at fair value through profit or loss, an increase from HK$489 thousand in 2021, primarily due to the disposal of certain marketable shares and fair value changes in the investment portfolio Securities Trading Segment Net Gain | Year | Net Gain (HK$ Thousand) | | :--- | :--- | | 2022 | 2,707 | | 2021 | 489 | - The increase in gain was mainly due to the disposal of certain marketable shares and fair value changes in the investment portfolio[224](index=224&type=chunk) [Logistics Services](index=32&type=section&id=Logistics%20Services) The logistics services segment's turnover increased by 16.46% to HK$7,817 thousand in 2022, primarily due to increased demand for logistics services for testing supplies and samples Logistics Services Turnover | Year | Turnover (HK$ Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | | 2022 | 7,817 | 16.46% | | 2021 | 6,712 | - | - The increase in turnover was mainly due to increased demand for logistics services for testing supplies and samples[225](index=225&type=chunk) [Financial Performance Analysis](index=33&type=section&id=Financial%20Performance%20Analysis) In 2022, the Group's gross profit and gross margin improved, selling and distribution expenses increased due to aggressive marketing, administrative expenses surged from business expansion and corporate activities, finance costs decreased due to convertible bond redemption, and ultimately, profit attributable to owners of the Company significantly increased [Gross Profit and Gross Margin](index=33&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit for 2022 was approximately HK$1,100,957 thousand, an increase of HK$742,937 thousand from 2021, with the gross margin slightly rising by 2.06 percentage points to 59.46%, maintaining a stable level Gross Profit and Gross Margin | Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Gross Profit (HK$ Thousand) | 1,100,957 | 358,020 | +742,937 | | Gross Margin | 59.46% | 57.40% | +2.06% | [Selling and Distribution Expenses](index=33&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for 2022 were approximately HK$13,726 thousand, a 17.08% year-on-year increase, primarily due to more aggressive strategic marketing and promotional activities for healthcare-related products Selling and Distribution Expenses | Year | Amount (HK$ Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | | 2022 | 13,726 | 17.08% | | 2021 | 11,724 | - | - The increase in expenses was mainly due to more aggressive strategic marketing and promotional activities undertaken in 2022 for the promotion and sale of healthcare-related products[30](index=30&type=chunk) [Administrative Expenses](index=33&type=section&id=Administrative%20Expenses) Administrative expenses for 2022 were approximately HK$241,156 thousand, a 53.52% year-on-year increase, primarily due to increased staff costs from the expansion of the medical biological laboratory testing services and health check services segment, as well as higher corporate activities and listing expenses Administrative Expenses | Year | Amount (HK$ Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | | 2022 | 241,156 | 53.52% | | 2021 | 157,081 | - | - The increase in administrative expenses was mainly due to an increase in staff costs of approximately **HK$67,381 thousand** resulting from the expansion of the medical biological laboratory testing services and health check services segment, as well as an increase in legal and professional fees of approximately **HK$2,700 thousand** and listing expenses of approximately **HK$8,734 thousand**[227](index=227&type=chunk) [Finance Costs](index=33&type=section&id=Finance%20Costs) Finance costs for 2022 were approximately HK$3,495 thousand, a decrease from HK$6,543 thousand in 2021, primarily due to reduced finance costs from convertible bonds following a partial redemption Finance Costs | Year | Amount (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | | 2022 | 3,495 | -46.58% | | 2021 | 6,543 | - | - The decrease in finance costs was mainly due to the reduction in finance costs arising from convertible bonds, which decreased following the partial redemption of the principal amount of convertible bonds on May 11, 2021[227](index=227&type=chunk) [Profit for the Year](index=33&type=section&id=Profit%20for%20the%20Year) Net profit attributable to owners of the Company for 2022 was approximately HK$258,087 thousand, a significant increase from HK$19,385 thousand in 2021, primarily driven by surging demand for COVID-19 testing services and eased border restrictions Net Profit Attributable to Owners of the Company | Year | Amount (HK$ Thousand) | Year-on-Year Growth | | :--- | :--- | :--- | | 2022 | 258,087 | 1231.46% | | 2021 | 19,385 | - | - The increase in net profit was mainly due to the immense demand for rapid antigen test kits and testing services during the fifth wave of the COVID-19 pandemic in Hong Kong, and increased demand for testing services from cross-boundary travelers after border restrictions were eased[228](index=228&type=chunk) [Significant Business Developments and Strategies](index=34&type=section&id=Significant%20Business%20Developments%20and%20Strategies) In 2022, the Group implemented several significant business developments and strategic adjustments, including the failure to meet acquisition performance targets for Shanghai Longyao and Fushi, signing an equity investment term sheet with an industrial investor, revising annual caps for continuing connected transactions, actively advancing the Boron Neutron Capture Therapy cancer treatment project, signing a strategic cooperation letter of intent with a leading pharmaceutical group, establishing a joint venture, extending convertible bond maturity and issuing new bonds, and assessing a possible transfer of listing [Failure to Achieve Acquisition Targets/Profit Guarantees (Shanghai Longyao and Fushi)](index=34&type=section&id=Failure%20to%20Achieve%20Acquisition%20Targets%2FProfit%20Guarantees%20%28Shanghai%20Longyao%20and%20Fushi%29) Shanghai Longyao failed to meet its audited annual revenue and net profit targets, resulting in the lapse of rights to additional award shares, while Fushi's actual cumulative profit was negative, leading to the second tranche of contingent consideration being zero, confirming both acquisitions' performance targets were not met - Shanghai Longyao failed to achieve its revenue (**RMB150,000,000**) and net profit (**RMB30,000,000**) targets by December 31, 2022, resulting in the lapse of rights to aggregate additional award shares[201](index=201&type=chunk) - Fushi's actual cumulative profit was negative, thus the second tranche of contingent consideration (**HK$6,120,000**) was adjusted to zero[232](index=232&type=chunk) - The Board confirmed that the target/profit guarantee obligations for both the acquisitions of Shanghai Longyao and Fushi were not met[233](index=233&type=chunk) [Incidental Disclosure Matters (GEM Listing Rules)](index=35&type=section&id=Incidental%20Disclosure%20Matters%20%28GEM%20Listing%20Rules%29) The Company has no options or other rights as described in Rule 19.36B(2)(c) of the GEM Listing Rules regarding the failure to achieve acquisition targets/profit guarantee obligations - The Company has no options or other rights as described in Rule 19.36B(2)(c) of the GEM Listing Rules regarding the failure to achieve the target/profit guarantee obligations for the acquisitions[43](index=43&type=chunk) [Associated Company Enters into Equity Investment Term Sheet with Industrial Investor](index=35&type=section&id=Associated%20Company%20Enters%20into%20Equity%20Investment%20Term%20Sheet%20with%20Industrial%20Investor) Shanghai Longyao signed a non-legally binding term sheet with Qianhai Derun Capital Management (Shenzhen) Co., Ltd., where the investor intends to invest RMB20,000,000 in Shanghai Longyao, but no legally binding agreement has been entered into as of the announcement date - Shanghai Longyao signed a non-legally binding term sheet with an investor, who intends to invest **RMB20,000,000** in Shanghai Longyao[205](index=205&type=chunk) - As of the announcement date, no legally binding formal agreement has been entered into between the parties[205](index=205&type=chunk) [Revision of Annual Caps for Continuing Connected Transactions](index=35&type=section&id=Revision%20of%20Annual%20Caps%20for%20Continuing%20Connected%20Transactions) Hua Sheng Diagnostic Centre and BGI Gene Health Technology (Hong Kong) Co., Limited revised their master supply agreement, increasing the 2022 annual cap for continuing connected transactions from HK$80,000,000 to HK$400,000,000, explicitly covering COVID-19 rapid antigen test kit supply, and subsequently, the 2022 referral services agreement cap was further increased to HK$550,000,000 - Hua Sheng Diagnostic Centre and BGI Gene revised their master supply agreement, increasing the 2022 annual cap for continuing connected transactions from **HK$80,000,000 to HK$400,000,000**, covering the supply of COVID-19 rapid antigen test kits[32](index=32&type=chunk) - The annual cap for continuing connected transactions under the 2022 referral services agreement was further increased to **HK$550,000,000**[210](index=210&type=chunk) [Progress of Boron Neutron Capture Therapy (BNCT) Cancer Treatment Project](index=36&type=section&id=Progress%20of%20Boron%20Neutron%20Capture%20Therapy%20%28BNCT%29%20Cancer%20Treatment%20Project) The Company's indirect wholly-owned subsidiaries, Pengbo (Hong Kong) Neutron Cancer Treatment Centre Limited and Pengbo (Hainan) Boron Neutron Medical Technology Co., Ltd., signed an investment agreement with the Hainan Boao Lecheng International Medical Tourism Pilot Zone Administration to invest in and construct a Boron Neutron Capture Therapy cancer treatment center - The Company's subsidiaries signed an investment agreement with the Hainan Boao Lecheng International Medical Tourism Pilot Zone Administration to invest in and construct a Boron Neutron Capture Therapy cancer treatment center[207](index=207&type=chunk)[235](index=235&type=chunk) [Strategic Cooperation Letter of Intent with Leading Pharmaceutical Group](index=36&type=section&id=Strategic%20Cooperation%20Letter%20of%20Intent%20with%20Leading%20Pharmaceutical%20Group) The Company signed a non-legally binding letter of intent with CSPC Pharmaceutical Group Limited to explore strategic equity investment cooperation in the Company's ongoing projects, including CSPC's proposed direct equity investment of 10% to 20% in the Company, but the letter of intent expired on March 22, 2023, with no legally binding agreement entered into as of the announcement date - The Company signed a non-legally binding letter of intent with CSPC Pharmaceutical Group Limited to seek strategic equity investment cooperation, with CSPC proposing a direct equity investment of **10% to 20%** in the Company[1](index=1&type=chunk)[208](index=208&type=chunk) - The letter of intent expired on March 22, 2023, and no legally binding agreement has been entered into as of the announcement date[208](index=208&type=chunk) [Subsidiary Establishes Joint Venture with Healthcare Group](index=36&type=section&id=Subsidiary%20Establishes%20Joint%20Venture%20with%20Healthcare%20Group) Hua Sheng Diagnostic Centre, a subsidiary of the Company, entered into a joint venture agreement with Sure Metro Limited, a wholly-owned subsidiary of Town Health International Medical Group Limited, to establish Hong Kong Medical Biological Testing Centre Limited, with Hua Sheng Diagnostic Centre holding a 51% equity interest, to operate a medical biological laboratory in Hong Kong - The Company's subsidiary, Hua Sheng Diagnostic Centre, established a joint venture, Hong Kong Medical Biological Testing Centre Limited, with Sure Metro Limited, a wholly-owned subsidiary of Town Health International Medical Group Limited[50](index=50&type=chunk)[236](index=236&type=chunk) - Hua Sheng Diagnostic Centre holds a **51% equity interest** in the joint venture, which operates a medical biological laboratory in Hong Kong[236](index=236&type=chunk) [Extension of Convertible Bond Maturity and Issuance of New Bonds](index=36&type=section&id=Extension%20of%20Convertible%20Bond%20Maturity%20and%20Issuance%20of%20New%20Bonds) The Company entered into an amendment agreement with Guoyuan Securities Investment (Hong Kong) Limited to extend the maturity date of the 2020 convertible bonds by two years to May 10, 2024, and subsequently issued new 2022 convertible bonds, partially paid by cancelling 2020 bonds and partially by cash, with proceeds allocated to the Boron Neutron Capture Therapy project, R&D, and working capital - On May 10, 2022, the Company entered into an amendment agreement with Guoyuan Securities Investment (Hong Kong) Limited to extend the maturity date of the 2020 convertible bonds by two years to May 10, 2024[2](index=2&type=chunk)[267](index=267&type=chunk) - On December 20, 2022, the Company issued **US$10,000,000** in 2022 convertible bonds, with **US$5,000,000** paid by cancelling 2020 bonds and the remainder paid in cash[268](index=268&type=chunk) - The net proceeds will be used for investment in the Boron Neutron Capture Therapy project (**US$3,000,000**) and R&D costs and general working capital (**US$1,944,000**)[268](index=268&type=chunk) [BNCT Equipment Procurement and Land Use Rights](index=38&type=section&id=BNCT%20Equipment%20Procurement%20and%20Land%20Use%20Rights) Pengbo Hainan successfully acquired a 50-year land use right for a state-owned construction land in Boao Pilot Zone to construct and operate a Boron Neutron Capture Therapy center, and the Company signed sales, memorandum of understanding, and service agreements with Sumitomo for the procurement of BNCT equipment, components, and technical advisory services - Pengbo Hainan successfully acquired a 50-year land use right for a state-owned construction land of **6,171.03 square meters** in Boao Pilot Zone for the construction and operation of a Boron Neutron Capture Therapy center[33](index=33&type=chunk)[239](index=239&type=chunk) - The Company signed agreements with Sumitomo, whereby Pengbo Hainan will purchase Boron Neutron Capture Therapy equipment and components from Sumitomo and receive technical advisory services for equipment installation and commissioning[4](index=4&type=chunk)[211](index=211&type=chunk) - On January 17, 2023, Pengbo Hainan agreed to purchase Boron Neutron Capture Therapy components, with an initial sales contract price of **JPY436,000,000**, and procure related maintenance services for a consideration of **JPY360,600,000**[240](index=240&type=chunk) [Disposal of Subsidiaries (Mingzhu Group and Chaozheng Group)](index=39&type=section&id=Disposal%20of%20Subsidiaries%20%28Mingzhu%20Group%20and%20Chaozheng%20Group%29) The Group disposed of its entire equity interests in Mingzhu Group and Chaozheng Group in 2022, aiming to reallocate resources to higher growth potential businesses and save administrative costs, respectively - The disposal of Mingzhu Group was completed on April 4, 2022, aiming to free up resources and reallocate them to businesses with higher growth potential[51](index=51&type=chunk)[241](index=241&type=chunk)[271](index=271&type=chunk) - The disposal of Chaozheng Group was completed on May 31, 2022, aiming to save administrative costs[5](index=5&type=chunk)[213](index=213&type=chunk) [Share Award Scheme and Grant of Share Options](index=39&type=section&id=Share%20Award%20Scheme%20and%20Grant%20of%20Share%20Options) In 2022, the Company's trustee purchased a total of 2,325,000 shares on the Stock Exchange under the Share Award Scheme for approximately HK$2,985,000, with no award shares granted to selected participants as of the announcement date, and in January 2023, the Company granted share options to eligible participants to subscribe for up to 5,000,000 shares - In 2022, the trustee purchased a total of **2,325,000 shares** of the Company on the Stock Exchange under the Share Award Scheme, at a consideration of approximately **HK$2,985,000**[6](index=6&type=chunk)[214](index=214&type=chunk) - As of the announcement date, no award shares have been granted to any selected participants under the Share Award Scheme[214](index=214&type=chunk) - On January 6, 2023, the Company granted share options to eligible participants under the Share Option Scheme to subscribe for up to **5,000,000 shares**, with a vesting period of three years[45](index=45&type=chunk)[273](index=273&type=chunk) [Assessment of Possible Transfer of Listing](index=39&type=section&id=Assessment%20of%20Possible%20Transfer%20of%20Listing) The Company announced on September 1, 2022, that it had appointed professionals to assess the feasibility of transferring its securities from GEM to the Main Board of the Stock Exchange - The Company has appointed professionals to assess the possibility of transferring its securities from GEM to the Main Board of the Stock Exchange[272](index=272&type=chunk) [Future Outlook](index=40&type=section&id=Future%20Outlook) The Group plans to continue developing medical biological laboratory testing and health check services, expand into the Greater Bay Area, launch new testing items, accelerate clinical trials for anti-tumor cell therapy products (CAR-T), and advance the construction of the Boron Neutron Capture Therapy center, aiming to provide personalized precision health and precision medicine services - The Group will continue to strengthen collaboration with district health center operators to expand high-throughput health screening services to Hong Kong communities and launch new tests such as **HPV DNA testing, colorectal cancer DNA testing, and cPassTM testing**[244](index=244&type=chunk)[274](index=274&type=chunk) - The Phase I clinical trial for its CAR-T drug, LY007 cell injection, is proceeding as planned, with a target of enrolling sufficient patients by the end of **2023**[245](index=245&type=chunk) - Progress is being made on the Boron Neutron Capture Therapy center in Boao Pilot Zone, with main construction and interior decoration expected to be completed in the first and second halves of **2023**, respectively, targeting equipment installation and trial operation by the end of **2024 or early 2025**[9](index=9&type=chunk)[276](index=276&type=chunk) - The Group aims to become the first service provider to offer Boron Neutron Capture Therapy cancer treatment in Greater China, introducing and enhancing this advanced oncology radiotherapy for advanced cancer patients in mainland China, Hong Kong, and Macau[9](index=9&type=chunk) - The Group has become a distributor of **Japanese-made NMN powder** and **Japanese health product "Chisei"** to strengthen sales and expand the product portfolio of its healthcare-related and pharmaceutical products segment[275](index=275&type=chunk) [Financial Resources and Capital Structure](index=42&type=section&id=Financial%20Resources%20and%20Capital%20Structure) This section details the Group's liquidity, financial resources, and capital structure, including cash balances, gearing, current ratios, issued share capital, convertible bonds, regulatory capital requirements, significant investments, and various financial commitments and risks [Liquidity, Financial Resources and Capital Structure Overview](index=42&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure%20Overview) The Group primarily funds its operations and capital expenditures through internal resources and other borrowings. As of year-end 2022, cash and bank balances were approximately HK$92,770 thousand, a year-on-year decrease of HK$57,784 thousand, mainly used for dividend payments and BNCT equipment prepayments. The gearing ratio increased to 43.79%, and the current ratio rose to 1.61 times - The Group funds its operations and capital expenditures through internally generated resources and other borrowings[277](index=277&type=chunk) Liquidity and Financial Resources Overview | Indicator | December 31, 2022 (HK$ Thousand) | December 31, 2021 (HK$ Thousand) | Change (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 92,770 | 150,554 | (57,784) | | Total Assets | 1,470,491 | 706,782 | 763,709 | | Total Liabilities | 643,971 | 240,887 | 403,084 | | Gearing Ratio | 43.79% | 34.08% | +9.71% | | Current Ratio | 1.61 times | 1.22 times | +0.39 times | - The decrease in cash and bank balances was mainly due to payments for dividends to non-controlling shareholders of subsidiaries and prepayments for the purchase of Boron Neutron Capture Therapy equipment in 2022[10](index=10&type=chunk) - Unsecured other borrowings amounted to approximately **HK$5,641 thousand**, bearing interest at a fixed rate of **10% per annum**, repayable within one year[46](index=46&type=chunk) [Issued Share Capital and Convertible Bonds](index=43&type=section&id=Issued%20Share%20Capital%20and%20Convertible%20Bonds) As of year-end 2022, the Company's total issued share capital was HK$96,323,115, comprising 963,231,150 ordinary shares. The Group held outstanding convertible bonds with a principal amount of US$10,000,000, a carrying amount of approximately HK$55,796 thousand, bearing 8.25% annual interest, and maturing on December 30, 2024. The net proceeds from the newly issued convertible bonds will be used for the Boron Neutron Capture Therapy project, R&D, and working capital Issued Share Capital | Indicator | December 31, 2022 | December 31, 2021 | | :--- | :--- | | Total Issued Share Capital (HK$ Thousand) | 96,323 | 96,323 | | Number of Ordinary Shares | 963,231,150 | 963,231,150 | Outstanding Convertible Bonds | Indicator | December 31, 2022 | December 31, 2021 | | :--- | :--- | | Principal Amount | US$10,000,000 | US$5,000,000 | | Carrying Amount (HK$ Thousand) | 55,796 | 38,651 | | Annual Interest Rate | 8.25% | 8.5% | | Maturity Date | December 30, 2024 | May 11, 2022 | Use of Net Proceeds from 2022 Convertible Bonds | Intended Use | Net Proceeds (HK$ Thousand) | Utilized as of December 31, 2022 (HK$ Thousand) | Balance as of December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Investment in Boron Neutron Capture Therapy project | 23,340 | Nil | 23,340 | | R&D costs and general working capital | 15,124 | Nil | 15,124 | [Fushi Capital and Net Asset Requirements](index=43&type=section&id=Fushi%20Capital%20and%20Net%20Asset%20Requirements) Fushi, as an insurance brokerage company, must comply with the minimum net asset value of HK$500,000 and minimum paid-up share capital requirements under the Insurance Ordinance. As of year-end 2022, Fushi had complied with these capital and net asset regulations - Fushi is required to maintain a minimum net asset value of **HK$500,000** and minimum paid-up share capital at all times[249](index=249&type=chunk) - As of December 31, 2022, Fushi had complied with the capital and net asset requirements[249](index=249&type=chunk) [Significant Investments Held and Performance (Pillar, Kunbo)](index=44&type=section&id=Significant%20Investments%20Held%20and%20Performance%20%28Pillar%2C%20Kunbo%29) The Group holds equity interests in Pillar Biosciences, Inc. and Broncus Medical Inc. as long-term strategic investments. In 2022, the Pillar investment yielded a fair value gain of approximately HK$1,330 thousand, while the Broncus Medical investment recorded a fair value loss of approximately HK$39,358 thousand. These investments aim to create synergies and enter the precision diagnostics and treatment industries Significant Investments Overview | Investee | Shareholding as of December 31, 2022 | Fair Value as of December 31, 2022 (HK$ Thousand) | Fair Value Gain/(Loss) for 2022 (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Pillar Biosciences, Inc. | 3.11% | 69,270 | 1,330 | | Broncus Medical Inc. | 1.13% | 13,672 | (39,358) | - The Group's investment in Pillar aims to create synergies with the Group's medical biological laboratory testing services and health check services[14](index=14&type=chunk) - The investment in Broncus Medical allows the Group to strategically allocate resources in precision diagnostics, enter the precision treatment industry, and explore cooperation opportunities[252](index=252&type=chunk) - The Group did not hold any other significant investments with a market value exceeding **5%** of the Group's total audited assets as of December 31, 2022[283](index=283&type=chunk) [Operating Lease Commitments](index=45&type=section&id=Operating%20Lease%20Commitments) As of December 31, 2022, the Group's operating lease commitments for short-term office leases amounted to approximately HK$1,192 thousand, an increase from HK$400 thousand in 2021 Operating Lease Commitments | Year | Amount (HK$ Thousand) | | :--- | :--- | | December 31, 2022 | 1,192 | | December 31, 2021 | 400 | [Capital Commitments](index=45&type=section&id=Capital%20Commitments) As of the reporting period end, the Group's total contracted but unprovided capital commitments amounted to HK$237,541 thousand, primarily for Boron Neutron Capture Therapy equipment procurement and treatment center construction Contracted but Unprovided Capital Commitments | Item | Amount (HK$ Thousand) | | :--- | :--- | | Boron Neutron Capture Therapy equipment | 148,875 | | Boron Neutron Capture Therapy center construction | 88,666 | | **Total** | **237,541** | - An initial payment of **JPY900,000,000** (approximately **HK$51,765,000**), representing **30%** of the contract price, has been paid to Sumitomo for Boron Neutron Capture Therapy equipment[254](index=254&type=chunk) - Agreements have been entered into with contractors and suppliers for the construction of the Boron Neutron Capture Therapy center, totaling approximately **HK$94,006,000**, of which **HK$5,340,000** has been paid[255](index=255&type=chunk) - Agreements have been signed with Sumitomo, where Sumitomo agreed to provide technical advisory services to Pengbo Hainan for the installation and commissioning of Boron Neutron Capture Therapy equipment, with a service fee of **JPY400,000,000** (approximately **HK$23,820,000**)[286](index=286&type=chunk) [Pledged Assets](index=46&type=section&id=Pledged%20Assets) As of December 31, 2022, the Group held approximately HK$128,556 thousand in pledged bank deposits, including RMB-denominated deposits of HK$4,400 thousand as collateral for the Boao Pilot Zone BNCT center construction or operation, and JPY-denominated deposits of HK$124,156 thousand as collateral for an irrevocable letter of credit issued to Sumitomo, the BNCT system supplier Pledged Bank Deposits | Item | Amount (HK$ Thousand) | | :--- | :--- | | Total Pledged Bank Deposits | 128,556 | | RMB-denominated restricted bank deposits (Boao Pilot Zone) | 4,400 | | JPY-denominated restricted bank deposits (Sumitomo L/C) | 124,156 | - Pledged bank deposits are primarily used as collateral for the construction or operation of the Boron Neutron Capture Therapy center in Boao Pilot Zone and for an irrevocable letter of credit issued to Sumitomo, the Boron Neutron Capture Therapy system supplier[287](index=287&type=chunk) [Treasury Policy, Foreign Exchange and Interest Rate Risks](index=46&type=section&id=Treasury%20Policy%2C%20Foreign%20Exchange%20and%20Interest%20Rate%20Risks) The Group's business activities are primarily denominated in HKD and RMB, currently facing no significant exchange rate risk and not using financial instruments for hedging. The Board will continue to manage cash balances prudently and maintain strong liquidity to seize growth opportunities, considering hedging instruments when interest rates or exchange rates are uncertain or volatile - The Group's business activities are primarily denominated in Hong Kong Dollars and Renminbi, and it does not face any significant exchange rate risk nor does it use financial instruments for hedging purposes[17](index=17&type=chunk) - The Directors will continue to follow a prudent policy in managing cash balances and maintaining strong liquidity to ensure the Group is prepared to seize business growth opportunities[258](index=258&type=chunk) - The Group will use hedging instruments, including interest rate swaps and foreign currency forward contracts, to manage risks when interest rates or exchange rates are uncertain or volatile[17](index=17&type=chunk) [Contingent Liabilities](index=46&type=section&id=Contingent%20Liabilities) As of December 31, 2022, and 2021, the Group had no significant contingent liabilities - As of December 31, 2022, and 2021, the Group had no significant contingent liabilities[257](index=257&type=chunk) [Other Information](index=47&type=section&id=Other%20Information) This section covers the Group's human resources, post-reporting period events, corporate governance practices, audit committee activities, auditor's scope of work, share transactions, public float sufficiency, and board composition [Employees and Remuneration Policy](index=47&type=section&id=Employees%20and%20Remuneration%20Policy) As of year-end 2022, the Group employed 253 full-time employees, with total staff costs of approximately HK$166,735 thousand. Remuneration is determined by performance, experience, and market rates, with benefits including MPF, occupational retirement schemes, insurance, medical, training, share option schemes, and share award schemes Employees and Remuneration Overview | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Number of Full-time Employees | 253 | 211 | | Total Staff Costs (HK$ Thousand) | 166,735 | 99,354 | | Contributions to Retirement Benefit Schemes (HK$ Thousand) | 3,271 | 2,089 | - Remuneration is determined based on employee performance, experience, and prevailing market rates, with benefits including discretionary bonuses, Mandatory Provident Fund, occupational retirement schemes, insurance, medical, training, share option schemes, and share award schemes[290](index=290&type=chunk) [Events After Reporting Period](index=47&type=section&id=Events%20After%20Reporting%20Period) There have been no significant events occurring from the end of the reporting period up to the date of this announcement - There have been no significant events from the end of the reporting period up to the date of this announcement[261](index=261&type=chunk)[291](index=291&type=chunk) [Corporate Governance Practices](index=47&type=section&id=Corporate%20Governance%20Practices) The Company is committed to maintaining high standards of corporate governance and has adopted the principles and code provisions of the Corporate Governance Code in Appendix 15 to the GEM Listing Rules. The Board has adopted a code of conduct for directors' securities transactions no less exacting than required by the GEM Listing Rules and confirmed compliance by all directors during 2022 - The Board is committed to maintaining high standards of corporate governance and has adopted the principles and code provisions of the Corporate Governance Code in Appendix 15 to the GEM Listing Rules[20](index=20&type=chunk)[292](index=292&type=chunk) - The Company has adopted a code of conduct for directors' securities transactions no less exacting than required by the GEM Listing Rules and confirmed that all Directors have complied with the said code during the year 2022[262](index=262&type=chunk)[300](index=300&type=chunk) [Audit Committee](index=48&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing financial controls, risk management, and internal control systems, and for reviewing the company's financial results and annual reports. In 2022, the Audit Committee held five meetings, fulfilled its primary duties, and met with external auditors twice without disagreement - The Audit Committee comprises three independent non-executive Directors: Mr. Yan Guoxiang (Chairman), Dr. Ho Chun Kit, and Mr. Qian Hongji[293](index=293&type=chunk) - Its principal duties include reviewing financial controls, risk management, and internal control systems, and reviewing the Company's quarterly, interim, and annual results and reports[22](index=22&type=chunk)[38](index=38&type=chunk)[301](index=301&type=chunk) - In 2022, the Audit Committee held **five meetings** and met with the external auditors **twice**, with no disagreements regarding the re-appointment of the external auditors[23](index=23&

Financial Performance - Total revenue for the three months ended September 30, 2022, was HKD 588,842 thousand, a significant increase from HKD 131,242 thousand in the same period last year, representing a growth of 348%[8] - Gross profit for the three months ended September 30, 2022, was HKD 385,091 thousand, compared to HKD 77,051 thousand in the previous year, indicating a growth of 400%[8] - Operating profit for the three months ended September 30, 2022, reached HKD 314,260 thousand, up from HKD 32,179 thousand in the same period last year, reflecting an increase of 877%[8] - Profit before tax for the three months ended September 30, 2022, was HKD 316,554 thousand, compared to HKD 30,969 thousand in the previous year, marking a growth of 920%[10] - Net profit for the three months ended September 30, 2022, was HKD 257,246 thousand, a substantial increase from HKD 22,901 thousand in the same period last year, representing a growth of 1,025%[10] - Total revenue for the nine months ended September 30, 2022, was HKD 1,275,820 thousand, compared to HKD 505,401 thousand in the previous year, indicating a growth of 152%[8] - Gross profit for the nine months ended September 30, 2022, was HKD 736,313 thousand, up from HKD 293,609 thousand in the previous year, reflecting an increase of 151%[8] - Operating profit for the nine months ended September 30, 2022, reached HKD 571,206 thousand, compared to HKD 179,463 thousand in the previous year, indicating a growth of 318%[8] - Basic and diluted earnings per share for the three months ended September 30, 2022, were HKD 0.095, compared to HKD 0.003 in the same period last year, representing a significant increase[10] - The company reported a total comprehensive income of HKD 239,090 thousand for the three months ended September 30, 2022, compared to HKD 71,666 thousand in the previous year, marking an increase of 233%[10] Revenue Sources - For the three months ended September 30, 2022, the revenue from medical laboratory testing and health check services was HKD 584,077,000, a significant increase from HKD 128,827,000 in the same period of 2021, representing a growth of 353%[24] - The revenue from the manufacturing and sales of health-related and pharmaceutical products for the nine months ended September 30, 2022, was HKD 216,557,000, up from HKD 107,000 in the same period of 2021[24] - The revenue from insurance brokerage services for the nine months ended September 30, 2022, was HKD 6,360,000, slightly down from HKD 6,422,000 in the same period of 2021[24] - The revenue from medical laboratory testing and health check services increased from approximately HKD 491.61 million in Q3 2021 to approximately HKD 1,044.98 million in Q3 2022, representing a growth of 113%[15] - The revenue from the manufacturing and sales of health-related and pharmaceutical products surged from approximately HKD 107,000 in Q3 2021 to HKD 216.56 million in Q3 2022, marking an increase of 2,022.90%[54] Market Outlook and Strategy - The company has provided guidance for the next quarter, projecting a revenue increase of approximately 10% year-over-year[13] - New product launches are expected to contribute an additional 15% to revenue in the upcoming quarter[13] - The company is focusing on market expansion, particularly in the Asia-Pacific region, aiming for a 20% increase in market share[13] - Overall, the company remains optimistic about future growth, driven by strategic initiatives and market demand[13] Investments and Acquisitions - Research and development investments have increased by 25%, targeting innovative technologies to enhance product offerings[13] - The company is exploring potential acquisitions to strengthen its market position and diversify its product portfolio[13] - The company has initiated a clinical trial for its CAR-T therapy product LY007, which is the first of its kind approved in China for treating certain types of lymphoma[52] - The company signed an investment agreement for the construction of a boron neutron capture therapy cancer treatment center in Hainan Boao Lecheng International Medical Tourism Pilot Zone[69] - The company established a joint venture with Sure Metro Limited, acquiring 51% and 49% stakes in the joint venture company, which operates a medical laboratory in Hong Kong[71] Financial Health and Expenses - Interest expenses for the three months ended September 30, 2022, totaled HKD 949,000, a decrease from HKD 1,210,000 in the same period of 2021[27] - The administrative expenses for Q3 2022 were approximately HKD 157.56 million, an increase of 49.38% from approximately HKD 105.47 million in Q3 2021, primarily due to increased employee costs and R&D expenses[62] - The interest expenses for Q3 2022 decreased to approximately HKD 3.26 million from HKD 5.29 million in Q3 2021, attributed to a reduction in financing costs related to convertible bonds[63] Corporate Governance - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[121] - The company confirmed compliance with the trading standards and the code of conduct for directors during the third quarter of 2022[116] - The company has maintained high standards of corporate governance and compliance with legal and regulatory requirements[117] - There were no conflicts of interest reported among directors or major shareholders during the third quarter of 2022[120] Shareholder Information - As of September 30, 2022, the company's director Liu Xiaolin holds approximately 54.97% of the company's shares, totaling 529,500,546 shares[90] - Genius Earn holds 529,500,546 shares, representing 54.97% of the company's total shares[95] - The company has a total of 22,428,571 shares held by Guoyuan Securities Investment (Hong Kong) Limited, representing 2.33% of the total shares[95] - The company has a total of 475,082,649 shares held by Guoyuan International Holdings Limited, representing 49.32% of the total shares[95] - The company has granted stock options totaling 6,960,000 shares, with an exercise price of HKD 1.68 and HKD 2.00 for different options[102]

Financial Performance - Total revenue for the six months ended June 30, 2022, was HKD 686,978, an increase of 83.8% compared to HKD 374,159 for the same period in 2021[5] - Gross profit for the six months ended June 30, 2022, was HKD 354,904, representing a 63.9% increase from HKD 216,558 in the prior year[5] - Operating profit for the six months ended June 30, 2022, was HKD 256,946, up 74.5% from HKD 147,284 in the same period of 2021[5] - Net profit for the six months ended June 30, 2022, was HKD 206,360, compared to HKD 108,990 for the same period in 2021, reflecting an increase of 89.4%[6] - Basic and diluted earnings per share for the six months ended June 30, 2022, were HKD 0.071, up from HKD 0.025 in the previous year[7] - The company reported a total comprehensive income of HKD 163,262 for the six months ended June 30, 2022, compared to HKD 110,911 in the same period of 2021[7] - The group reported a pre-tax profit of HKD 253,756,000, with income tax expenses amounting to HKD 47,396,000[32] - The company reported a profit of HKD 206,360,000 for the period, reflecting strong operational performance[35] Assets and Liabilities - Total assets as of June 30, 2022, amounted to HKD 892,928, an increase from HKD 706,782 as of December 31, 2021[9] - Total liabilities rose to HKD 352,492,000, up from HKD 240,887,000, indicating an increase of approximately 46%[12] - The company reported a total current liabilities of HKD 292,674,000, compared to HKD 227,395,000 in the previous year, marking an increase of about 29%[12] - As of June 30, 2022, total equity increased to HKD 540,436,000 from HKD 465,895,000 in the previous year, representing an increase of approximately 16%[11] - The total assets of the company reached HKD 892,928,000, up from HKD 706,782,000, indicating a growth of approximately 26%[12] Cash Flow - The company's net cash generated from operating activities for the six months ended June 30, 2022, was HKD 184,025,000, a significant recovery from a net cash outflow of HKD 32,647,000 in the same period last year[19] - Cash and cash equivalents as of June 30, 2022, were HKD 204,884, compared to HKD 150,554 at the end of 2021, indicating a growth of 36.1%[9] - Cash and cash equivalents at the end of the period increased to HKD 204,884,000 from HKD 133,167,000, reflecting a growth of approximately 54%[19] - The company experienced a net cash outflow from investing activities of HKD 122,600,000, an improvement compared to HKD 168,785,000 in the previous year[19] - The company’s financing activities resulted in a cash outflow of HKD 7,164,000, a decrease from HKD 50,206,000 in the same period last year, indicating improved cash management[19] Revenue Segments - Revenue from medical laboratory testing and health check services was HKD 460,906,000 for the six months ended June 30, 2022, compared to HKD 362,783,000 in the previous year, marking a 27.1% increase[30] - The segment revenue from pharmaceutical products reached HKD 215,402,000, up from HKD 107,000 in the same period last year, indicating a substantial growth[30] - The total income from insurance brokerage services was HKD 4,699,000 for the six months ended June 30, 2022, slightly up from HKD 4,767,000 in the previous year[30] Business Strategy and Expansion - The company plans to continue expanding its biotechnology platform and precision treatment services to enhance market presence and drive future growth[4] - The company is focused on expanding its medical laboratory testing services and health check services in Hong Kong and developing new healthcare-related products in China[22] - The company plans to expand its market presence and invest in new technologies to enhance its service offerings in the healthcare sector[36] - The company is focusing on strategic acquisitions to bolster its market position and enhance its product portfolio[36] Stock Options and Share Capital - The company has a share option scheme in place to reward eligible participants, with a maximum issuance limit of 10% of the company's issued shares at any time[76] - The company reported a total of 58,400,000 stock options granted during the period[82] - The company has granted stock options totaling 10,700,000 shares, which is approximately 1.11% of the total issued shares[154] - The total expense recognized for stock options granted by the company for the six months ended June 30, 2022, was approximately HKD 1,279,000, compared to HKD 3,669,000 for the same period in 2021[85] Corporate Governance - The company has established an audit committee to oversee financial reporting and internal controls, consisting of three independent non-executive directors[177] - The board of directors emphasizes the importance of corporate governance and has implemented measures to ensure compliance with legal and regulatory requirements[174] - The company has maintained compliance with the GEM listing rules regarding public float requirements as of the report date[178] Employee and Management Costs - The total employee cost for the interim period was approximately HKD 59,941,000, an increase from HKD 33,509,000 in the same period last year[150] - The company’s management compensation for the six months ended June 30, 2022, totaled HKD 4,869,000, a decrease from HKD 6,562,000 in the same period of 2021[97] Investments and Acquisitions - A non-binding term sheet was signed on January 26, 2022, for an investment of RMB 20,000,000 by an investor into a subsidiary, Shanghai Longyao[117] - An investment agreement was signed on February 28, 2022, for the establishment of a boron neutron capture therapy cancer treatment center in Hainan Boao Lecheng[119] - The company completed the sale of its subsidiary, Mingzhu Group, on April 4, 2022, to reallocate resources to higher growth potential businesses[127] Market Outlook - The company anticipates stable demand for diagnostic and health check services in the second half of 2022, with a potential rebound in demand for self-paid nucleic acid testing as entry restrictions are eased[129] - Asia Molecular Diagnostics is expected to commence operations in the second half of 2022, providing FDA-approved next-generation sequencing-based cancer diagnostic tests[130]

Financial Performance - Total revenue for the first quarter of 2022 reached HKD 384,157,000, a significant increase of 149.0% compared to HKD 154,169,000 in the same period last year[9] - Gross profit for the first quarter was HKD 189,732,000, representing a gross margin of 49.3% compared to 48.8% in the previous year[9] - Operating profit increased to HKD 133,261,000, up 242.5% from HKD 38,865,000 year-over-year[9] - Profit before tax for the quarter was HKD 132,044,000, a rise of 261.5% compared to HKD 36,585,000 in the prior year[9] - Net profit for the period was HKD 106,585,000, compared to HKD 27,239,000 in the same quarter last year, marking a growth of 290.5%[9] - Basic and diluted earnings per share increased to HKD 0.036, up from HKD 0.002 in the previous year[11] - The company reported a total comprehensive income of HKD 75,030,000 for the quarter, compared to HKD 26,746,000 in the same period last year[11] Revenue Breakdown - For the three months ended March 31, 2022, the revenue from medical laboratory testing and health check services was HKD 162,662 thousand, an increase from HKD 146,440 thousand in the same period of 2021, representing a growth of 11.5%[27] - The revenue from the manufacturing and sales of health-related and pharmaceutical products reached HKD 214,752 thousand, significantly up from HKD 107 thousand in the previous year, indicating a substantial increase[27] - Total income from securities trading amounted to HKD 384,088 thousand, compared to HKD 154,169 thousand in the same period last year, reflecting a growth of 149.5%[27] Expenses and Costs - Administrative expenses rose to HKD 54,340,000, compared to HKD 33,419,000 in the previous year, reflecting increased operational costs[9] - The company’s interest expenses for the first quarter of 2022 totaled HKD 1,217,000, down from HKD 2,280,000 in the first quarter of 2021[7] - The effective tax expense for the first quarter of 2022 was HKD 25,459,000, compared to HKD 9,346,000 in the same period of 2021[32] Market and Operational Developments - The company continues to focus on expanding its medical laboratory and health services in Hong Kong and China[18] - The demand for diagnostic and health check services surged due to the COVID-19 fifth wave, prompting the company to reactivate its fire eye laboratory for community testing[73] - The company anticipates a rebound in demand for self-paid nucleic acid testing and other medical diagnostic services as entry restrictions ease[73] - The company’s subsidiary, Shanghai Longyao, received approval for its CAR-T therapy product, LY007, to commence Phase I clinical trials, marking a significant advancement in its product pipeline[48] Share Capital and Ownership - As of March 31, 2022, the total issued share capital of the company was 963,231,150 shares, with a par value of HKD 0.10 per share[89] - Genius Earn holds a controlling interest with 529,500,546 shares, representing 54.97% of the total shares[19] - The total issued shares of the company as of March 31, 2022, is 963,231,150 shares[94] - Guoyuan Securities Investment (Hong Kong) holds 22,428,571 shares, accounting for 2.33% of the total shares[19] Corporate Governance - The audit committee, consisting of three independent non-executive directors, has reviewed the financial reporting procedures and internal controls for the first quarter of 2022[121] - The company emphasizes the importance of corporate governance and has implemented measures to ensure compliance with legal and regulatory requirements[118] - The company confirmed that all directors adhered to the trading standards and conduct codes during the first quarter of 2022[117] Strategic Initiatives - The company signed a non-binding term sheet for an investment of RMB 20,000,000 with an investor on January 26, 2022, although no formal agreement has been established yet[66] - A supplemental supply agreement was signed on February 15, 2022, increasing the annual cap for related transactions from HKD 80,000,000 to HKD 400,000,000, covering the supply of COVID-19 rapid antigen test kits[67] - The company established a joint venture with Sure Metro Limited, acquiring 51% and 49% stakes respectively, to operate a medical laboratory in Hong Kong[70]

Financial Performance - The company recorded revenue of approximately HKD 623,761,000 for the year ended December 31, 2021, a slight decrease of 4.88% compared to the previous year[7] - Gross profit for the year was approximately HKD 358,020,000, representing a year-on-year increase of 5.59%, with a gross margin of 57.40% compared to 51.71% in the previous year[7] - The company recorded a net profit of approximately HKD 132,572,000 for the year 2021, a decrease from HKD 167,623,000 in 2020, primarily due to increased competition in COVID-19 testing services and rising employee costs[41] - Revenue from COVID-19 nucleic acid testing services continued to account for over 85% of the segment's revenue in the fiscal year 2021, driven by ongoing demand due to the pandemic[24] - Revenue from the manufacturing and sales of healthcare and pharmaceutical products decreased from approximately HKD 869,000 in 2020 to about HKD 107,000 in 2021, primarily due to the economic impact of COVID-19[29] - Revenue from insurance brokerage services increased by 15.23%, from approximately HKD 6,875,000 in 2020 to about HKD 7,922,000 in 2021[31] - The logistics services segment recorded revenue of approximately HKD 6,712,000 in 2021, a significant increase from zero in 2020[32] - Administrative expenses rose by 18.56% to approximately HKD 157,081,000 in 2021, driven by increased employee costs and depreciation[39] COVID-19 Testing and Services - The company completed over 3,600,000 COVID-19 nucleic acid tests in 2021, an increase of over 50% compared to 2,300,000 tests completed in 2020[10] - The company is preparing for the post-pandemic era by adjusting its business direction in response to the evolving local nucleic acid testing market[7] - The emergence of the Omicron variant has led to sustained demand for nucleic acid testing services, with the company preparing for potential increases in demand as new variants arise[50] - The company entered into a total service agreement with BGI Genomics for COVID-19 testing services, enhancing its operational capabilities in this area[45] - The company has launched several new testing services in 2021, including cervical cell screening and COVID-19 neutralizing antibody testing, to meet increased health awareness[51] Research and Development - The company is advancing a new project aimed at commercializing the world's first approved precision radiotherapy technology for treating solid tumors[8] - The company has made significant progress in research and development of immune cell therapy as part of its precision treatment initiatives[8] - The company has initiated the first approved clinical trial for its investigational new drug LY007, a CAR-T therapy for relapsed CD20-positive B-cell non-Hodgkin lymphoma, marking a significant milestone in its R&D efforts[15] - The company is sponsoring two investigator-initiated trials for CAR-T products targeting CLDN18.2 and CD19, with ongoing patient recruitment expected to yield significant results[18] - The company is developing a next-generation nasal COVID-19 vaccine and conducting laboratory research on innovative COVID-19 testing technology platforms[51] - The company is advancing two additional CAR-T products in preclinical trials, targeting CLDN18.2 for pancreatic or gastric cancer and CD19 for B-cell non-Hodgkin lymphoma or leukemia[51] Corporate Governance - The company has adhered to the GEM Listing Rules Appendix 15 Corporate Governance Code for the fiscal year 2021[89] - The company has implemented corporate governance measures focusing on integrity towards shareholders, quality of information disclosure, transparency, and accountability[89] - The board is responsible for formulating the overall strategic development of the group and overseeing management, administration, and operations[97] - The company has established written terms of reference for its audit committee, remuneration committee, and nomination committee[98] - The company has confirmed that all directors complied with the trading standards and relevant conduct codes during the fiscal year 2021[90] Environmental, Social, and Governance (ESG) Initiatives - The company is committed to reducing negative environmental impacts and contributing to community welfare[166] - The ESG report covers major business segments including tumor immunotherapy and health management services in China[159] - The group consumed 374,815 kWh of electricity in 2021, a decrease of 57.3% from 874,427 kWh in 2020, resulting in a consumption density of 0.60 kWh per thousand HKD revenue[183] - Water consumption was 6,867 cubic meters in 2021, slightly down from 6,989 cubic meters in 2020, maintaining a consumption density of 0.01 cubic meters per thousand HKD revenue[183] - The group generated nitrogen oxides (NOx) emissions of 7.5 kg, sulfur oxides (SOx) emissions of 0.20 kg, and particulate matter (PM) emissions of 0.55 kg during the reporting period[184] Employee and Workforce Management - The group employed a total of 211 full-time employees as of December 31, 2021, compared to 129 in 2020[73] - Total employee costs for the year 2021 amounted to approximately HKD 99,354,000, an increase from HKD 67,551,000 in 2020[73] - Contributions to the mandatory provident fund plan for the year 2021 totaled approximately HKD 2,089,000, up from HKD 1,543,000 in 2020[74] Financial Position and Assets - As of December 31, 2021, the company's cash and bank balances were approximately HKD 150,554,000, a decrease of about HKD 233,985,000 from HKD 384,539,000 in 2020[56] - The total assets of the company as of December 31, 2021, were approximately HKD 706,782,000, while total liabilities were about HKD 240,887,000, resulting in a debt-to-asset ratio of approximately 34.08%[58] - The company holds an investment in Pillar Biosciences valued at HKD 67,940,000, representing 9.61% of total assets as of December 31, 2021[63] - The investment in Kintor Pharmaceutical is valued at HKD 54,081,000, accounting for 7.65% of total assets as of December 31, 2021[63] Shareholder and Financial Management - The company repurchased a total of 2,695,000 shares in 2021 at prices ranging from HKD 1.27 to HKD 1.78 per share, demonstrating a commitment to shareholder value[46] - The company has adopted a dividend policy to allow shareholders to share in profits while retaining liquidity for future growth opportunities[155] - The board will consider factors such as operational and financial performance, capital needs, and liquidity before declaring dividends[156]

Financial Performance - For the three months ended September 30, 2021, the revenue was HKD 131,242,000, a decrease of 74.6% compared to HKD 515,725,000 in the same period of 2020[7]. - The gross profit for the same period was HKD 77,051,000, down 70.7% from HKD 263,125,000 year-on-year[7]. - Operating profit for the three months was HKD 32,179,000, a decline of 85.5% compared to HKD 222,058,000 in the previous year[7]. - The net profit for the three months was HKD 22,901,000, a decrease of 87.3% from HKD 179,322,000 in the same quarter of 2020[7]. - The total comprehensive income for the three months was HKD 71,666,000, down 60.1% from HKD 179,444,000 year-on-year[14]. - For the nine months ended September 30, 2021, the revenue was HKD 505,401,000, a decrease of 7.6% compared to HKD 547,030,000 in the same period of 2020[7]. - The operating profit for the nine months was HKD 179,463,000, an increase of 0.8% from HKD 177,966,000 year-on-year[7]. - The net profit for the nine months was HKD 131,891,000, a decrease of 1.2% compared to HKD 133,543,000 in the previous year[7]. - The basic and diluted earnings per share for the three months was HKD 0.003, down from HKD 0.064 in the same period of 2020[14]. - The company's profit attributable to owners for the nine months ended September 30, 2021, was HKD 27,254,000, compared to HKD 21,532,000 for the same period last year, reflecting a 26.5% increase[42]. - Basic and diluted earnings per share for the nine months ended September 30, 2021, were HKD 0.028, up from HKD 0.022 in the same period last year, indicating a 27.3% increase[42]. Revenue Streams - For the nine months ended September 30, 2021, the revenue from medical laboratory testing services and health check services was HKD 491.61 million, compared to HKD 539.26 million for the same period in 2020, reflecting a decrease of approximately 8.8%[26]. - The revenue from insurance brokerage services for the nine months ended September 30, 2021, was HKD 6.42 million, an increase of approximately 6.2% from HKD 6.05 million in the same period of 2020[26]. - The revenue from logistics services for the nine months ended September 30, 2021, was HKD 6.32 million, with no revenue reported in the same period of 2020, indicating a new revenue stream[26]. - The total revenue for the nine months ended September 30, 2021, was HKD 547.03 million, compared to HKD 505.40 million for the same period in 2020, representing an increase of approximately 8.3%[26]. - The company reported a significant decrease in revenue from the manufacturing and sales of health-related and pharmaceutical products, with no revenue recorded for the three months ended September 30, 2021, compared to HKD 161,000 in the same period of 2020[26]. Operational Developments - The company continues to focus on expanding its services in tumor immunotherapy and health management services in China, which are key areas of growth[21]. - The company operates primarily in tumor immunotherapy, health management services, and medical laboratory testing in China and Hong Kong[49]. - The group has established a basic laboratory in Hong Kong to provide COVID-19 nucleic acid testing services, and a mobile laboratory at Hong Kong International Airport for rapid testing[50]. - Shanghai Longyao has initiated clinical research for a new CAR-T therapy, LY007, which received approval for clinical trials in January 2021[52]. - The company is exploring diversification in its testing business and plans to expedite the Phase I clinical trials for CAR-T products that have received clinical approval[72]. Shareholder Information - As of September 30, 2021, the total number of issued shares of the company was 963,231,150, with a par value of HKD 0.10 per share[79]. - Mr. Liu Xiaolin holds 529,500,546 shares, representing approximately 54.97% of the company's total shares[78]. - Genius Earn, a controlled corporation, also holds 529,500,546 shares, equivalent to 54.97%[83]. - Guoyuan Securities Investment (Hong Kong) Limited holds 22,428,571 shares, accounting for 2.33% of the total shares[83]. - Guoyuan International Holdings Limited has a controlled interest in 475,082,640 shares, representing 49.32%[83]. - The total number of options granted under the share option scheme is 13,760,000, which is approximately 1.44% of the total shares[81]. - The company has implemented a share option scheme to reward eligible participants for their contributions to the group's success[87]. - The company has a significant concentration of ownership, with major shareholders holding over 54% of the total shares[84]. Corporate Governance - The company maintained compliance with the GEM Listing Rules regarding corporate governance during Q3 2021[109]. - The audit committee, consisting of three independent non-executive directors, reviewed the financial reporting procedures and internal controls for Q3 2021[111]. - The company confirmed that all directors adhered to the trading standards and code of conduct during Q3 2021[107]. - The company expressed gratitude to stakeholders for their support in the Q3 2021 report[114]. Financial Costs and Income - Interest income for the three months ended September 30, 2021, was HKD 1,000, down from HKD 4,000 in the same period last year, representing a 75% decrease[29]. - Miscellaneous income increased significantly to HKD 171,000 for the three months ended September 30, 2021, compared to HKD 55,000 in the same period last year, marking a 210.9% increase[29]. - Total financing costs for the three months ended September 30, 2021, were HKD 1,210,000, a decrease of 47.5% from HKD 2,307,000 in the same period last year[30]. - Financing costs increased to approximately HKD 5,286,000 in Q3 2021, compared to HKD 4,180,000 in Q3 2020[63]. Market Outlook - The economic outlook for the coming year is expected to improve slightly despite ongoing geopolitical and macroeconomic challenges[70]. - The global CAR-T market is projected to grow at a compound annual growth rate of 59%, reaching USD 8.71606 billion by 2025[71].

中期報告 CHINA BIOTECH SERVICES HOLDINGS LIMITED 中國生物科技服務控股有限公司 CHINA BIOTECH SERVICES HOLDINGS LIMITED 中國生物科技服務控股有限公司 (Incorporated in the Cayman Islands and continued in Bermuda with limited liability) Stock Code: 8037 INTERIM REPORT 2021 Precision Diagnosis 精準檢測 Future Biotechnology Platform 未來生物科技平臺Precision Treatment 精準治療 CHINA BIOTECH SERVICES HOLDINGS LIMITED 中國生物科技服務控股有限公司 (於開曼群島註冊成立並在百慕達繼續營業之有限公司) 股份代號: 8037 2021 中身 Future Biotechnology Platform 未來生物科技平臺Precision Treatment 精準治療 Precision Diagnosis 精準檢測 ...

Financial Performance - The company reported a revenue of HKD 154,169,000 for the first quarter of 2021, a significant increase from HKD 12,704,000 in the same period of 2020, representing a growth of approximately 1,113%[9] - Gross profit for the first quarter of 2021 was HKD 75,220,000, compared to HKD 2,997,000 in the first quarter of 2020, indicating a substantial increase[9] - Operating profit for the first quarter of 2021 was HKD 38,865,000, a turnaround from an operating loss of HKD 24,570,000 in the same quarter of the previous year[9] - The company achieved a profit before tax of HKD 36,585,000, compared to a loss before tax of HKD 25,026,000 in the first quarter of 2020[9] - Net profit for the first quarter of 2021 was HKD 27,239,000, a significant improvement from a net loss of HKD 24,708,000 in the same period last year[9] - The total comprehensive income for the first quarter of 2021 was HKD 26,746,000, compared to a total comprehensive loss of HKD 24,980,000 in the first quarter of 2020[11] - Basic and diluted earnings per share for the first quarter of 2021 were HKD 0.002, recovering from a loss per share of HKD 0.023 in the same quarter of 2020[11] Revenue Segmentation - Revenue from medical laboratory testing and health check services was HKD 146,440 thousand, up from HKD 8,885 thousand year-over-year[25] - The insurance brokerage services segment recorded a revenue increase of 22.51%, rising from approximately HKD 3,084,000 in the first quarter of 2020 to approximately HKD 3,777,000 in the first quarter of 2021[44] - The manufacturing and sales of health-related and pharmaceutical products segment saw a decrease in revenue from approximately HKD 407,000 in the first quarter of 2020 to approximately HKD 107,000 in the first quarter of 2021, attributed to the challenging economic environment and COVID-19 outbreak[42] Expenses and Costs - Administrative expenses increased to HKD 33,419,000 from HKD 24,793,000 year-on-year, reflecting ongoing investments in operations[9] - Interest expenses for Q1 2021 amounted to approximately HKD 2,280,000, a significant increase from HKD 456,000 in Q1 2020, attributed to higher short-term borrowings[53] - Sales and distribution expenses were approximately HKD 3,138,000 in Q1 2021, up about HKD 221,000 or 7.58% from HKD 2,917,000 in Q1 2020, maintaining a stable level[49] Strategic Focus and Development - The company is focused on expanding its biotechnology services and enhancing its precision diagnosis and treatment capabilities in the market[8] - The company continues to focus on expanding its services in tumor immunotherapy and health management in China[19] - The company is actively involved in the research and development of healthcare-related products and services[19] - The company aims to enhance its market presence through strategic partnerships and potential acquisitions in the healthcare sector[19] - The company plans to diversify its testing business and expedite clinical trials for CAR-T products, aiming to establish itself as an advanced biomedical innovation platform[59] Shareholder Information - The company has not recommended any dividend distribution for the three months ended March 31, 2021, consistent with the previous year[30] - The weighted average number of ordinary shares used for calculating basic and diluted earnings per share was 966,052,000 for the three months ended March 31, 2021, compared to 969,806,000 for the same period in 2020[32] - Genius Earn holds a controlling interest in 529,500,546 shares, representing 54.85% of the total shares[81] - The company repurchased 485,000 shares at a price between HKD 1.27 and HKD 1.35 per share during Q1 2021[55] - The share repurchase price ranged from HKD 1.27 to HKD 1.35, with a total expenditure of HKD 1,147,850[97] Corporate Governance - The company has adopted a set of trading standards for directors in compliance with GEM listing rules[99] - The board is committed to maintaining high standards of corporate governance and compliance with legal and regulatory requirements[100] - The company has confirmed compliance with the GEM listing rules during the first quarter of 2021[101] - There were no conflicts of interest reported among directors or controlling shareholders during the first quarter of 2021[102] - The audit committee has been established to comply with GEM listing rules and consists of three independent non-executive directors[103]

Business Performance - The company recorded a revenue of approximately HKD 655,792,000 for the year ended December 31, 2020, a significant increase of about 10.07 times compared to HKD 59,214,000 for the year ended December 31, 2019[17]. - The revenue from the medical laboratory testing and health check services segment increased significantly from approximately HKD 53,551,000 in 2019 to approximately HKD 646,748,000 in 2020, representing a growth of 1,108%[22]. - The gross profit for 2020 was approximately HKD 339,082,000, up from approximately HKD 22,373,000 in 2019, an increase of approximately HKD 316,709,000[26]. - The gross profit margin improved to approximately 51.71% in 2020, up from approximately 37.78% in 2019, an increase of about 13.93 percentage points[26]. - The total revenue from the insurance brokerage services segment was approximately HKD 6,875,000 in 2020, compared to HKD 2,402,000 in 2019, marking a significant increase[23]. - The company recorded a net profit of approximately HKD 167,623,000 in 2020, reversing a net loss of approximately HKD 107,483,000 in 2019[32]. COVID-19 Response - The company completed over 1,700,000 COVID-19 tests, with a peak daily testing capacity of 230,000 samples[1]. - The establishment of the mobile laboratory at Hong Kong International Airport provided rapid RT-PCR testing services, reducing passenger wait times from 8-12 hours to 2-3 hours[1]. - The company established a laboratory and an additional temporary laboratory with 16 air membranes in Hong Kong to provide COVID-19 testing services[22]. - The company entered into a service agreement for COVID-19 testing services, with a transaction value of HKD 145,393,461.77[42]. Biotechnology Developments - Shanghai Longyao Biotechnology Co., a non-wholly owned subsidiary, achieved a milestone with its LY007 cell injection, becoming the first CAR-T product targeting CD20 to receive clinical application approval in China[8]. - The company aims to continue developing its biotechnology platform and provide high-quality immune cell therapy technologies[12]. - The company aims to diversify its testing business and expedite clinical trials for CAR-T products, with a focus on the Greater Bay Area healthcare market[45]. Financial Management - Administrative expenses rose to approximately HKD 132,489,000 in 2020, an increase of about 40.78% from approximately HKD 94,111,000 in 2019[30]. - Interest income from the lending business was approximately HKD 1,300,000 in 2020, down from HKD 1,688,000 in 2019[24]. - The financing costs increased to approximately HKD 6,498,000 in 2020, compared to HKD 1,692,000 in 2019, primarily due to the issuance of convertible bonds[31]. - The company strengthened its capital base through the issuance of convertible bonds, which will not immediately dilute existing shareholders' equity[36]. Corporate Governance - The company adhered to the GEM Listing Rules Appendix 15 Corporate Governance Code during the fiscal year ending December 31, 2020[87]. - The board consists of six executive directors and three independent non-executive directors, reflecting a mix of skills and experience[89]. - The company has implemented corporate governance measures focusing on integrity, quality of information disclosure, transparency, and accountability[86]. - The company has established an audit committee, nomination committee, and remuneration committee as part of its corporate governance practices[104]. - The audit committee consists of three independent non-executive directors and has reviewed the financial performance for the year 2020[104]. Environmental Responsibility - The group is committed to protecting the environment and fulfilling social responsibilities while adhering to strict corporate governance standards[149]. - The environmental policy includes monitoring compliance with applicable environmental laws and promoting an eco-friendly culture among employees[164]. - The company has not recorded any violations of environmental laws during the reporting period[175]. - The company aims to maintain a zero-violation record in hazardous waste management, reflecting its commitment to environmental responsibility[182]. Employee Management - The total employee cost for the year was approximately HKD 67,551,000, an increase from HKD 48,739,000 in the previous year[67]. - The company employed a total of 129 full-time employees as of December 31, 2020, down from 143 in 2019[67].

Financial Performance - Total revenue for the three months ended September 30, 2020, was HKD 515,725,000, a significant increase from HKD 14,151,000 in the same period of 2019[5] - Gross profit for the three months ended September 30, 2020, was HKD 263,125,000, compared to HKD 5,307,000 in the prior year, reflecting a substantial growth[5] - Operating profit for the three months ended September 30, 2020, was HKD 222,058,000, a turnaround from an operating loss of HKD 23,335,000 in the same quarter of 2019[5] - Profit before tax for the three months ended September 30, 2020, was HKD 218,812,000, compared to a loss of HKD 24,297,000 in the previous year[5] - Net profit for the three months ended September 30, 2020, was HKD 179,322,000, compared to a loss of HKD 23,976,000 in the same period of 2019[5] - Total revenue for the nine months ended September 30, 2020, was HKD 547,030,000, up from HKD 42,721,000 in the same period of 2019[5] - Basic and diluted earnings per share for the three months ended September 30, 2020, was HKD 0.064, compared to a loss of HKD 0.023 in the prior year[10] - The company reported a total comprehensive income of HKD 179,444,000 for the three months ended September 30, 2020, compared to a loss of HKD 24,485,000 in the same period of 2019[10] - The company has shown a strong recovery in financial performance, indicating potential for future growth and market expansion[5] - The increase in revenue and profit margins suggests successful implementation of new strategies and operational efficiencies[5] Equity and Assets - As of September 30, 2020, the total equity attributable to the owners of the company was HKD 96,685 million, a decrease from HKD 96,981 million as of January 1, 2020[12] - The company reported a net loss of HKD 56,148 million for the period, compared to a loss of HKD 60,294 million in the previous period[15] - The total comprehensive loss for the period amounted to HKD 57,252 million, which includes other comprehensive losses of HKD 1,104 million[15] - The company’s total assets as of September 30, 2020, were HKD 457,018 million, reflecting a decrease from HKD 493,363 million as of January 1, 2020[12] - The company reported a cumulative loss of HKD 509,528 million as of September 30, 2020[12] - The company’s revenue for the nine months ended September 30, 2020, was HKD 289,192 million, compared to HKD 313,363 million for the same period in the previous year[12] - The company’s cash and cash equivalents as of September 30, 2020, were HKD 24,171 million[12] Market Strategy and Expansion - The company plans to expand its market presence in China and Hong Kong through new healthcare services and product offerings[18] - The company is focusing on research and development of immunotherapy and health management services in China[18] - The company established a laboratory and an additional temporary laboratory with 16 air membranes in Hong Kong to provide COVID-19 testing services, responding to the increased demand due to the pandemic[52] - The company has initiated clinical research for a new generation CD20-targeted CAR-T therapy, with the product LY007 cell injection undergoing clinical trial registration[53] - The group aims to maintain its market share in medical testing and healthcare in Hong Kong while focusing on the development and registration of immune cell products[71] - The management is confident in the biotechnology industry's prospects and is committed to obtaining clinical approval for cell therapy products as soon as possible[71] Revenue Sources - Revenue from medical laboratory testing and health check services was HKD 513,688,000 for the three months ended September 30, 2020, compared to HKD 13,162,000 in 2019, indicating a substantial growth[24] - Revenue from the sale of healthcare-related and pharmaceutical products was HKD 161,000 for the three months ended September 30, 2020, down from HKD 398,000 in 2019[24] - The company did not recognize any revenue from tumor immunotherapy services for the three months ended September 30, 2020, compared to HKD 77,000 in 2019[24] - The revenue from the medical laboratory testing and health check services segment increased significantly from approximately HKD 40,059,000 in Q3 2019 to approximately HKD 539,259,000 in Q3 2020, representing a growth of 1,246.16%[56] - The total revenue from the insurance brokerage services segment was approximately HKD 6,046,000 in Q3 2020, compared to zero in Q3 2019[57] Expenses and Costs - Interest expenses for the three months ended September 30, 2020, amounted to HKD 2,307,000, compared to HKD 488,000 in 2019, showing a significant increase in financing costs[27] - Administrative expenses increased by approximately HKD 26,728,000 or 41.47%, totaling about HKD 91,184,000 in Q3 2020 compared to approximately HKD 64,456,000 in Q3 2019[62] - The total employee cost for the third quarter of 2020 was approximately HKD 50,529,000, compared to HKD 34,895,000 in the same period of 2019, reflecting an increase of about 45.0%[75] - The company borrowed additional short-term loans, leading to an increase in interest expenses to approximately HKD 4,180,000 in Q3 2020 from HKD 772,000 in Q3 2019[63] Shareholder Information - As of September 30, 2020, the total number of shares issued by the company was 966,851,150, with a par value of HKD 0.10 per share[88] - Genius Earn holds 529,500,546 shares, representing approximately 54.77% of the total shares[94] - Yao Xin Venture Limited holds 128,300,000 shares, representing approximately 13.27% of the total shares[94] - The total number of shares held by major shareholders amounts to 29,680,000, which is approximately 3.06%[91] - The company has a stock option plan established to reward eligible participants for their contributions to the group's success[99] - The total stock options granted during Q3 2020 amounted to 20,020,000 shares, with a total value of HKD 29,680,000[100] - The total number of stock options exercised during the quarter was 2,955,000 shares[112] - The company repurchased a total of 2,955,000 shares of its ordinary stock during the third quarter of 2020, reflecting confidence in its long-term business prospects[113] Governance and Compliance - The board confirmed that all directors complied with the trading standards and the code of conduct during the third quarter of 2020[115] - The company maintained compliance with the corporate governance code as per GEM listing rules during the third quarter[116] - There were no conflicts of interest reported among directors or controlling shareholders during the third quarter[117] - The audit committee, consisting of three independent non-executive directors, reviewed the financial reporting procedures and internal controls during the third quarter[118] - The company ensured sufficient public float as required by GEM listing rules as of the report date[120] - The board expressed gratitude to all shareholders for their support during the third quarter[121]