Financial Performance - The net cash generated from operating activities for the six months ended June 30, 2023, was HKD 310,855,000, compared to HKD 184,025,000 for the same period in 2022, representing an increase of 68.8%[8]. - Revenue from medical laboratory testing and health check services for the six months ended June 30, 2023, was HKD 170,525,000, down 63.0% from HKD 460,906,000 in the same period of 2022[17]. - Revenue from the sale and distribution of health-related and pharmaceutical products decreased by 83.5% to HKD 356,000 from HKD 215,402,000 year-on-year[17]. - The group’s revenue for the six months ended June 30, 2023, was approximately HKD 182,357,000, a significant decrease of about 73.45% compared to approximately HKD 686,909,000 for the same period in 2022[107]. - The gross profit for the first half of 2023 was approximately HKD 61,326,000, a decrease of about HKD 293,578,000 compared to approximately HKD 354,904,000 in the first half of 2022, with a gross margin of 33.63%, down 18.04 percentage points from 51.67%[116]. - The company recorded a net loss attributable to shareholders of approximately HKD 30,484,000 for the first half of 2023, a significant decline from a net profit of HKD 68,220,000 in the same period of 2022[142]. Cash and Liquidity - The total cash and cash equivalents at the end of the period was HKD 245,396,000, up from HKD 204,884,000 in the previous year, reflecting a growth of 19.7%[8]. - The company reported a net cash outflow from investing activities of HKD 144,737,000, compared to HKD 122,600,000 in the previous year, indicating increased investment expenditures[8]. - As of June 30, 2023, the cash and bank balance was approximately HKD 245,396,000, an increase of about HKD 152,626,000 from HKD 92,770,000 on December 31, 2022[151]. - The company’s liquidity ratio improved to 2.14 times as of June 30, 2023, compared to 1.61 times at the end of 2022[130]. Equity and Liabilities - The total equity attributable to owners of the company decreased to HKD 544,374,000 from HKD 602,675,000, a decline of 9.7%[1]. - The total liabilities increased significantly, with current liabilities rising to HKD 172,585,000 from HKD 548,664,000, indicating a substantial change in the company's financial position[1]. - The total equity and liabilities amounted to HKD 904,083,000, down from HKD 1,470,491,000, reflecting a significant reduction in the company's overall financial structure[1]. - The company’s debt-to-asset ratio improved to approximately 27.34% as of June 30, 2023, compared to 43.79% at the end of 2022[130]. Investments and Capital Expenditures - The company has capital commitments of approximately HKD 235.99 million as of June 30, 2023, compared to HKD 237.54 million as of December 31, 2022[71]. - The company has entered into an agreement with Sumitomo for technical advisory services related to the installation and commissioning of boron neutron capture therapy equipment, with a service fee of approximately HKD 21.66 million[72]. - The company has entered into agreements to purchase boron neutron capture therapy equipment and drugs, aiming to be the first provider of this treatment in Greater China[126]. - The investment in boron neutron capture therapy projects has utilized approximately HKD 23,340,000, with a remaining balance of HKD 22,246,000 as of June 30, 2023[155]. Employee Costs and Compensation - Employee costs, including salaries and bonuses, decreased to HKD 19,562,000 for the three months ended June 30, 2023, down 33.1% from HKD 29,183,000 in the same period of 2022[24]. - The total employee cost for the first half of 2023 was approximately HKD 51,621,000, down from HKD 59,941,000 in the same period of 2022[163]. - The company recorded a total compensation for key management personnel of HKD 4,575,000 for the six months ended June 30, 2023, compared to HKD 4,869,000 for the same period in 2022[105]. Business Operations and Strategy - The company is committed to building and operating a cancer treatment center in Hainan, utilizing a boron neutron capture therapy system, with a medical institution practice license granted for five years until December 2027[112][113]. - The company has established laboratory testing service agreements with nine out of eighteen designated regional health center operators in Hong Kong to expand its health screening services[123]. - The company has launched several new tests, including HPV DNA tests and colorectal cancer DNA tests, to meet anticipated demand[124]. - The company is seeking collaborations with hospitals and clinical laboratories to expand its next-generation sequencing (NGS) testing services[125]. Share Capital and Stock Options - The total number of issued shares of the company was 963,231,150, with a par value of HKD 0.10 per share[169]. - The company has issued stock options for up to 5,000,000 shares, representing approximately 0.52% of the total issued shares as of January 6, 2023[144]. - The company has a stock option plan adopted to reward eligible participants for their contributions to the group's success[174]. - The stock options granted in August 2019 have an exercise price ranging from HKD 2.00 to HKD 2.20, with a total of 3,335,000 options available[200].

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） 截至二零二三年六月三十日止六個月 中期業績公告 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板 上市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在風 險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣 之證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量 的市場。 香港交易及結算所有限公司及聯交所對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生 或因倚賴該等內容而引致之任何損失承擔任何責任。 本公告的資料乃遵照《GEM證券上市規則》（「GEM上市規則」）而刊載，旨在提供 有關中國生物科技服務控股有限公司（「本公司」）的資料；本公司的董事（「董事」） 願就本公告的資料共同及個別地承擔全部責 ...

[Supplementary Announcement](index=1&type=section&id=Supplementary%20Announcement) This supplementary announcement updates the annual report for the year ended December 31, 2022, regarding net proceeds usage [Announcement Overview](index=1&type=section&id=Announcement%20Overview) This supplementary announcement from China Biotech Services Holdings Limited updates the 2022 annual report, primarily on net proceeds usage - The announcement is a supplementary announcement, providing further details for the annual report for the year ended December 31, 2022[2](index=2&type=chunk)[7](index=7&type=chunk) - The issuing company is China Biotech Services Holdings Limited (Stock Code: **8037**)[7](index=7&type=chunk) - This announcement supplements the company's annual report published on March 29, 2023, for the year ended December 31, 2022[7](index=7&type=chunk) [Update on Use of Net Proceeds](index=1&type=section&id=Update%20on%20Use%20of%20Net%20Proceeds) The company updated the proposed use of net proceeds for 2022, detailing unutilized balances and timelines for BNCT project, R&D, and working capital, with no material changes confirmed [Investment in Boron Neutron Capture Therapy Project](index=1&type=section&id=Investment%20in%20Boron%20Neutron%20Capture%20Therapy%20Project) This section details the allocation and expected utilization timeline for net proceeds designated for the BNCT project Use of Net Proceeds for Boron Neutron Capture Therapy Project (As of December 31, 2022) | Proposed Use | Net Proceeds (HKD '000) | Net Proceeds (USD) | Used as of Dec 31, 2022 (HKD '000) | Balance as of Dec 31, 2022 (HKD '000) | Proposed Use and Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Investment in Boron Neutron Capture Therapy Project | 23,340 | 3,000,000 | None | 23,340 | The remaining unutilized amount of **HKD 23,340,000** will be used for investment in the Boron Neutron Capture Therapy project, expected to be fully utilized by **September 30, 2023** at the latest | [R&D Costs and General Working Capital](index=2&type=section&id=R%26D%20Costs%20and%20General%20Working%20Capital) This section outlines the allocation and expected utilization timeline for net proceeds designated for R&D and general working capital Use of Net Proceeds for R&D Costs and General Working Capital (As of December 31, 2022) | Proposed Use | Net Proceeds (HKD '000) | Net Proceeds (USD) | Used as of Dec 31, 2022 (HKD '000) | Balance as of Dec 31, 2022 (HKD '000) | Proposed Use and Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D Costs and General Working Capital | 15,124 | 1,944,000 | None | 15,124 | The remaining unutilized amount of **HKD 15,124,000** will be used for R&D costs and general working capital, expected to be fully utilized by **September 30, 2023** at the latest | - The primary update concerns the proposed use of net proceeds as presented in the table on page 18 of the annual report[8](index=8&type=chunk) - The Board confirmed that the net proceeds have been or are intended to be used in accordance with previously disclosed intentions, and directors are unaware of any material changes to the proposed use[10](index=10&type=chunk) [Board Members](index=2&type=section&id=Board%20Members) The Board of Directors comprises seven members: three executive, one non-executive, and three independent non-executive directors - The Board of Directors consists of **seven members**[5](index=5&type=chunk) - Executive Directors include Mr Liu Xiaolin (Chairman), Mr He Xun, and Mr Huang Song[5](index=5&type=chunk) - Non-Executive Director includes Ms Xu Haiyin[5](index=5&type=chunk) - Independent Non-Executive Directors include Mr Yan Guoxiang, Dr He Junjie, and Mr Qian Hongji[5](index=5&type=chunk) [Other Important Information and Disclaimer](index=1&type=section&id=Other%20Important%20Information%20and%20Disclaimer) All other annual report information remains unchanged; the Board assumes full responsibility for this announcement's accuracy and completeness - All other information contained in the annual report remains unchanged, except as disclosed in this announcement[11](index=11&type=chunk) - This announcement is published in compliance with the GEM Listing Rules of The Stock Exchange of Hong Kong Limited, aiming to provide information about the company[12](index=12&type=chunk) - The Directors collectively and individually accept full responsibility for the information in this announcement, confirming its accuracy, completeness, and absence of misleading or fraudulent content or omissions[12](index=12&type=chunk) - This announcement will be published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the company's website (www.cbshhk.com) for at least seven consecutive days from the date of publication[12](index=12&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited assume no responsibility for the contents of this announcement and make no representation as to its accuracy or completeness[1](index=1&type=chunk)

Revenue Performance - The insurance brokerage segment's revenue decreased from approximately HKD 3,460,000 in Q1 2022 to about HKD 1,192,000 in Q1 2023, a decline of 65.55% due to intense market competition [1]. - The logistics services segment's revenue fell from approximately HKD 3,199,000 in Q1 2022 to about HKD 2,000 in Q1 2023, a significant drop of 99.94% attributed to reduced demand for testing supplies and sample logistics services [4]. - Total revenue for the first quarter of 2023 was HKD 130,561 thousand, a decrease of 65.9% compared to HKD 384,157 thousand in the same period of 2022 [37]. - For the three months ended March 31, 2023, revenue from medical laboratory testing and health check services was HKD 129,065 thousand, a decrease of 20.6% compared to HKD 162,662 thousand in the same period of 2022 [54]. - Revenue from the sale and distribution of health-related and pharmaceutical products was HKD 302 thousand, down significantly from HKD 214,752 thousand year-on-year [54]. - The sales and distribution segment for healthcare and pharmaceutical products saw a significant revenue drop from approximately HKD 214,752,000 in Q1 2022 to about HKD 302,000 in Q1 2023, a decrease of approximately 99.86% [101]. - The decline in revenue was attributed to reduced demand for rapid antigen test kits following the relaxation of COVID-19 quarantine regulations [101]. Profitability and Loss - The group recorded a gross profit of approximately HKD 49,161,000 in Q1 2023, down about HKD 140,571,000 from HKD 189,732,000 in Q1 2022, with a gross profit margin of 37.65%, a decrease of 11.75 percentage points year-on-year [6]. - The company reported a net loss attributable to shareholders of approximately HKD 15,375,000 in Q1 2023, compared to a net profit of HKD 34,938,000 in Q1 2022, mainly due to decreased demand for COVID-19 testing services [10]. - The company reported an operating loss of HKD 1,091 thousand for the first quarter of 2023, compared to an operating profit of HKD 133,261 thousand in the same period last year [37]. - The net loss for the period was HKD 7,781 thousand, a stark contrast to a profit of HKD 106,585 thousand in the first quarter of 2022 [37]. - The company reported a loss attributable to owners of the company of HKD 15,375,000 for the first quarter of 2023, compared to a profit of HKD 34,938,000 in the first quarter of 2022 [75]. - The total comprehensive loss for the period was HKD 28,892 thousand, compared to a total comprehensive income of HKD 6,048 thousand in the same period of 2022 [54]. Expenses and Costs - Administrative expenses were approximately HKD 44,717,000 in Q1 2023, a decrease of about HKD 9,623,000 or 17.71% compared to HKD 54,340,000 in Q1 2022, primarily due to reduced research and development costs [8]. - Financing costs increased to approximately HKD 1,353,000 in Q1 2023 from HKD 1,217,000 in Q1 2022, primarily due to costs associated with convertible bonds issued [9]. - Sales and distribution expenses were approximately HKD 3,720,000 in Q1 2023, a slight decrease of about HKD 185,000 or 4.74% from HKD 3,905,000 in Q1 2022, maintaining a stable level [7]. Strategic Initiatives and Future Outlook - The company entered into a total supply agreement with BGI Genomics for a maximum annual transaction limit of HKD 120,000,000, effective from January 18, 2023 [11]. - The company has committed a total of HKD 1.9 billion for the development of community health centers, expecting regular government funding to support future operations [16]. - The company anticipates continued growth in demand for health check and related medical services in Hong Kong due to increased public health awareness and an aging population [16]. - The company is actively seeking partnerships with various medical platforms and insurance companies to expand its healthcare services in the Greater Bay Area [18]. - New tests, including HPV DNA tests and colorectal cancer DNA tests, have been launched to meet anticipated demand [18]. - The company is preparing for FDA testing product validation in collaboration with hospitals and surgeons, aiming to enhance personalized precision health services [18]. - The company aims to leverage advancements in biomedical research and technology to develop innovative solutions for precision diagnosis and treatment [26]. - The company is focusing on expanding its cancer diagnostic and treatment platform, although specific future projections were not detailed in the report [41]. - The company continues to explore new product development and market expansion strategies to enhance its service offerings in the biotechnology sector [41]. - The company aims to expand its healthcare product offerings through strategic partnerships and new product introductions [101]. Corporate Governance and Compliance - The company complied with the GEM Listing Rules and corporate governance code during the first quarter of 2023 [139]. - The board has established an audit committee to comply with GEM Listing Rules 5.28 and 5.29, consisting of three independent non-executive directors [140]. - The board emphasizes the importance of corporate governance and is committed to maintaining high standards and compliance with legal and regulatory requirements [150]. - The company confirmed that all directors complied with the trading standards and the code of conduct for securities trading during the first quarter of 2023 [149]. - The company has maintained the public float as specified by the GEM Listing Rules as of the report date [152]. - The board consists of four executive directors and three independent non-executive directors, ensuring a balanced governance structure [142]. Shareholder Information - As of March 31, 2023, the total issued shares of the company amounted to 963,231,150 ordinary shares [110]. - Major shareholder Genius Earn holds approximately 54.97% of the company's shares, totaling 529,500,546 shares [109]. - The company has a total of 96,323,115 shares available for issuance under the share incentive plan, representing 10% of the total issued shares as of the plan's adoption date [132]. - The share incentive plan has a remaining term of 10 years, expiring on August 17, 2031 [136]. - The company granted stock options to three directors on August 20, 2019, September 2, 2020, and January 6, 2023 [136]. - The total number of stock options exercisable during the first quarter of 2023 was 11,760,000 [130]. - The company did not purchase, sell, or redeem any listed securities during the first quarter of 2023 [137]. - The company has not established any arrangements for directors to benefit from acquiring shares or debt securities of the company or any other entity during the first quarter of 2023 [136].

Report Overview and Disclaimer [Characteristics of the GEM Market and Disclaimer](index=1&type=section&id=GEM%E5%B8%82%E5%9C%BA%E7%89%B9%E8%89%B2%E4%B8%8E%E5%85%8D%E8%B4%A3%E5%A3%B0%E6%98%8E) The report highlights the high volatility and uncertain liquidity of GEM market securities, advising investor caution - GEM-listed companies are generally small to medium-sized, and their securities may experience **significant market volatility** with no guarantee of high liquidity[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement and disclaim any liability for any loss arising therefrom[12](index=12&type=chunk) [Directors' Responsibility Statement](index=1&type=section&id=%E8%91%A3%E4%BA%8B%E8%B4%A3%E4%BB%BB%E5%A3%B0%E6%98%8E) The company's directors collectively and individually accept full responsibility for this announcement's accuracy and completeness - The company's directors confirm that the information contained in this announcement is accurate and complete in all material respects, not misleading or deceptive, and contains no omissions[3](index=3&type=chunk) Unaudited Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the three months ended March 31, 2023, the Group shifted from a profit to a loss, driven by a sharp decline in revenue and a lower gross profit margin **Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the three months ended March 31):** | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total proceeds | 130,561 | 384,157 | (253,596) | -66.01% | | Revenue | 130,561 | 384,088 | (253,527) | -66.01% | | Cost of sales | (81,400) | (194,356) | 112,956 | -58.12% | | Gross profit | 49,161 | 189,732 | (140,571) | -74.09% | | Operating (loss)/profit | (1,091) | 133,261 | (134,352) | -100.82% | | (Loss)/profit before tax | (3,960) | 132,044 | (136,004) | -103.00% | | (Loss)/profit for the period | (7,781) | 106,585 | (114,366) | -107.31% | | (Loss)/profit for the period attributable to owners of the Company | (15,375) | 34,938 | (50,313) | -144.00% | [Condensed Consolidated Statement of Changes in Equity](index=4&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) As of March 31, 2023, total comprehensive loss attributable to owners was HK$16,500 thousand, a reversal from last year's total comprehensive income of HK$6,046 thousand **Summary of Condensed Consolidated Statement of Changes in Equity (For the three months ended March 31):** | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Total equity at January 1 (audited) | 826,520 | 465,895 | | Total comprehensive (loss)/income for the period | (8,817) | 75,030 | | Total comprehensive (loss)/income attributable to owners of the Company | (16,500) | 6,046 | | Total comprehensive (loss)/income attributable to non-controlling interests | 7,683 | 68,984 | | Total equity at March 31 (unaudited) | 824,061 | 540,925 | Notes to the Financial Statements [General Information](index=6&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) The company, an investment holding company incorporated in the Cayman Islands and continued in Bermuda, operates in medical testing, immunotherapy, healthcare products, and insurance brokerage - The Company is an investment holding company, and its subsidiaries are principally engaged in medical laboratory and health check services in Hong Kong, oncologic immunocellular therapy and health management in China, sales of healthcare and pharmaceutical products in China and Hong Kong, and insurance brokerage services[45](index=45&type=chunk) - The Company's issued shares have been listed on the GEM of the Stock Exchange since June 17, 2004[20](index=20&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=6&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80%E5%8F%8A%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The unaudited first-quarter results were prepared under the historical cost basis and in accordance with Hong Kong Financial Reporting Standards, with no material impact from new standards - The results were prepared under the historical cost basis and in accordance with Hong Kong Financial Reporting Standards, and the adoption of new and revised HKFRSs did not have a material financial impact on the operating results and financial position[21](index=21&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [Revenue](index=7&type=section&id=%E8%90%A5%E4%B8%9A%E9%A2%9D) First-quarter 2023 revenue declined sharply due to reduced income from medical testing, healthcare products, insurance brokerage, and logistics services **Revenue Breakdown (For the three months ended March 31):** | Service Category | 2023 (HK$'000) | 2022 (HK$'000) | Change (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Medical laboratory and health check services | 129,065 | 162,662 | (33,597) | -20.65% | | Sales of healthcare and pharmaceutical products | 302 | 214,752 | (214,450) | -99.86% | | Insurance brokerage services | 1,192 | 3,460 | (2,268) | -65.55% | | Logistics services | 2 | 3,199 | (3,197) | -99.94% | | Money lending business | – | 15 | (15) | -100.00% | | **Total Revenue** | **130,561** | **384,088** | **(253,527)** | **-66.01%** | [Other Income and Gains/(Losses)](index=8&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%2F(%E4%BA%8F%E6%8D%9F)) Other income and gains recorded a net loss of HK$1,815 thousand in Q1 2023, a significant increase from the prior year's loss, mainly due to exchange losses **Other Income and Gains/(Losses) (For the three months ended March 31):** | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Interest income | 700 | 12 | | Government subsidies | 23 | – | | Sundry income | 130 | 142 | | Exchange loss, net | (1,209) | (255) | | Loss on write-off of property, plant and equipment | (1,459) | (99) | | **Total** | **(1,815)** | **(200)** | [Finance Costs](index=8&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance costs for the first quarter of 2023 increased to HK$1,353 thousand, primarily due to higher effective interest on convertible bonds **Finance Costs (For the three months ended March 31):** | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Other borrowings | – | 138 | | Effective interest on convertible bonds | 1,100 | 950 | | Lease liabilities | 253 | 129 | | **Total** | **1,353** | **1,217** | [Income Tax Expense](index=9&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) First-quarter 2023 income tax expense decreased significantly to HK$3,821 thousand from HK$25,459 thousand last year, mainly due to lower Hong Kong Profits Tax **Income Tax Expense (For the three months ended March 31):** | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 4,141 | 25,803 | | Deferred tax (for the period) | (320) | (344) | | **Total** | **3,821** | **25,459** | - China Enterprise Income Tax is calculated at a rate of **25%**, with high-tech enterprises enjoying a preferential rate of **15%**[29](index=29&type=chunk)[53](index=53&type=chunk) [Dividend](index=9&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any dividend for the three months ended March 31, 2023, consistent with the prior year period - The Board does not recommend the payment of any dividend for the three months ended March 31, 2023[31](index=31&type=chunk)[54](index=54&type=chunk) [(Loss)/Earnings Per Share](index=10&type=section&id=%E6%AF%8F%E8%82%A1(%E4%BA%8F%E6%8D%9F)%2F%E7%9B%88%E5%88%A9) Basic and diluted loss per share for Q1 2023 was HK$0.016, compared to earnings per share of HK$0.036 in the prior year period, driven by the net loss attributable to owners **(Loss)/Earnings Per Share (For the three months ended March 31):** | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :--- | :--- | :--- | | (Loss)/profit for the period attributable to owners of the Company | (15,375) | 34,938 | | Weighted average number of ordinary shares ('000) | 963,231 | 963,231 | | **Basic and diluted (loss)/earnings per share (HK$)** | **(0.016)** | **0.036** | - Diluted loss per share for Q1 2023 was the same as basic loss per share due to the anti-dilutive effect of outstanding share options[79](index=79&type=chunk) Financial Review [Overall Revenue Analysis](index=11&type=section&id=%E6%95%B4%E4%BD%93%E8%90%A5%E4%B8%9A%E9%A2%9D%E5%88%86%E6%9E%90) Q1 2023 revenue fell 66.01% to HK$130,561 thousand, primarily due to reduced demand for nucleic acid testing and antigen test kits following relaxed quarantine measures - In the first quarter of 2023, revenue was **HK$130,561 thousand**, a significant decrease of **66.01%** from HK$384,088 thousand in the same period of 2022[59](index=59&type=chunk) - The decline was mainly attributable to the negative impact of rapid changes in the COVID-19 pandemic and the relaxation of quarantine measures by the Hong Kong government on demand for nucleic acid testing services and rapid antigen test kits[59](index=59&type=chunk) [Segment Revenue Analysis](index=11&type=section&id=%E5%88%86%E9%83%A8%E8%90%A5%E4%B8%9A%E9%A2%9D%E5%88%86%E6%9E%90) All major business segments experienced significant revenue declines, with healthcare products and logistics services showing the largest drops due to policy changes and market competition - All segments saw a sharp decline in revenue, with sales of healthcare and pharmaceutical products down **99.86%**, logistics services down **99.94%**, insurance brokerage services down **65.55%**, and medical laboratory and health check services down **20.65%**[60](index=60&type=chunk)[62](index=62&type=chunk)[39](index=39&type=chunk)[64](index=64&type=chunk) [Medical Laboratory and Health Check Services](index=11&type=section&id=%E5%8C%BB%E6%A3%80%E5%8F%8A%E5%81%A5%E5%BA%B7%E6%A3%80%E6%9F%A5%E6%9C%8D%E5%8A%A1) This segment's revenue decreased by 20.65% to HK$129,065 thousand, mainly due to reduced demand for nucleic acid testing services at border control points - Revenue from medical laboratory and health check services decreased by **20.65%** from HK$162,662 thousand to **HK$129,065 thousand**, primarily due to a decline in demand for COVID-19 nucleic acid testing services at border control points[60](index=60&type=chunk) [Oncologic Immunocellular Therapy Services](index=12&type=section&id=%E8%82%BF%E7%98%A4%E5%85%8D%E7%96%AB%E7%BB%86%E8%83%9E%E6%B2%BB%E7%96%97%E6%9C%8D%E5%8A%A1) This segment generated no revenue in Q1 2023, but the Phase I clinical trial for its LY007 CAR-T cell injection is proceeding as planned - The oncologic immunocellular therapy services segment did not generate any revenue during the first quarter of 2023[38](index=38&type=chunk) - The Phase I clinical trial for LY007 cell injection, China's first CD20-targeted CAR-T therapy product, commenced in January 2022, with the first cohort of four patients having completed cell infusion[38](index=38&type=chunk) [Sales of Healthcare and Pharmaceutical Products](index=12&type=section&id=%E4%BF%9D%E5%81%A5%E5%8F%8A%E5%8C%BB%E8%8D%AF%E4%BA%A7%E5%93%81%E9%94%80%E5%94%AE) This segment's revenue plummeted 99.86% to HK$302 thousand due to a drop in demand for rapid antigen test kits after quarantine rules were relaxed - Revenue from sales of healthcare and pharmaceutical products decreased sharply by **99.86%** from HK$214,752 thousand to **HK$302 thousand**, mainly due to a decline in demand for rapid antigen test kits[62](index=62&type=chunk) - To strengthen this segment, the Group entered into a five-year license and distribution agreement with a Japanese supplier for NMN powder products for exclusive distribution in Hong Kong and Macau[62](index=62&type=chunk) [Insurance Brokerage Services](index=12&type=section&id=%E4%BF%9D%E9%99%A9%E7%BB%8F%E7%BA%AA%E6%9C%8D%E5%8A%A1) This segment's revenue decreased by 65.55% to HK$1,192 thousand, impacted by intense market competition and the time needed for economic recovery - Revenue from insurance brokerage services decreased by **65.55%** from HK$3,460 thousand to **HK$1,192 thousand**, due to intense market competition and the time required for economic recovery[39](index=39&type=chunk) [Logistics Services and Money Lending Business](index=13&type=section&id=%E7%89%A9%E6%B5%81%E6%9C%8D%E5%8A%A1%E5%8F%8A%E6%94%BE%E5%80%BA%E4%B8%9A%E5%8A%A1) Logistics services revenue fell 99.94% to HK$2 thousand due to market competition and reduced demand, while the money lending business recorded no interest income - Revenue from logistics services decreased by **99.94%** from HK$3,199 thousand to **HK$2 thousand**, mainly due to intense market competition and reduced demand[64](index=64&type=chunk) - The money lending business recorded no interest income during the first quarter of 2023, and no new loans were granted[64](index=64&type=chunk) [Gross Profit and Gross Profit Margin](index=13&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Q1 2023 gross profit decreased by HK$140,571 thousand to HK$49,161 thousand, with the gross margin falling 11.75 percentage points to 37.65% - Gross profit for the first quarter of 2023 was **HK$49,161 thousand**, a decrease of HK$140,571 thousand from HK$189,732 thousand in the same period last year[65](index=65&type=chunk) - The gross profit margin decreased by **11.75 percentage points** from 49.40% to **37.65%**, mainly due to lower revenue from medical testing services and reduced sales of rapid antigen test kits[65](index=65&type=chunk) [Selling and Distribution Expenses](index=13&type=section&id=%E9%94%80%E5%94%AE%E5%8F%8A%E5%88%86%E9%94%80%E5%BC%80%E6%94%AF) Selling and distribution expenses decreased slightly by 4.74% to HK$3,720 thousand, remaining at a stable level - Selling and distribution expenses decreased slightly by **4.74%** to **HK$3,720 thousand**, maintaining a stable level[65](index=65&type=chunk) [Administrative Expenses](index=14&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased by 17.71% to HK$44,717 thousand, primarily due to lower R&D costs in the immunotherapy segment and reduced staff costs in medical testing - Administrative expenses decreased by **17.71%** to **HK$44,717 thousand**, mainly due to a **HK$7,188 thousand** reduction in R&D costs for oncologic immunocellular therapy services and a **HK$6,902 thousand** decrease in staff and recruitment costs for medical testing services[90](index=90&type=chunk) [Finance Costs](index=14&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance costs increased to HK$1,353 thousand, mainly resulting from the convertible bonds issued in December 2022 - Finance costs increased to **HK$1,353 thousand**, primarily attributable to the convertible bonds issued in December 2022[90](index=90&type=chunk) [Loss for the Period](index=14&type=section&id=%E6%9C%AC%E6%9C%9F%E9%97%B4%E4%BA%8F%E6%8D%9F) The net loss attributable to owners was HK$15,375 thousand, a reversal from last year's net profit, driven by decreased demand for COVID-19 related services and products - The net loss attributable to owners of the Company was **HK$15,375 thousand**, a reversal from a net profit of HK$34,938 thousand in the same period last year[91](index=91&type=chunk) - The loss was mainly due to the decline in demand for nucleic acid testing services and rapid antigen test kits following the relaxation of COVID-19 quarantine regulations[91](index=91&type=chunk) Business Review and Future Prospects [Business Review](index=14&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) This quarter's business review covers the renewal of a supply agreement with BGI, a purchase contract for BNCT equipment, and the grant of share options [Continuing Connected Transactions](index=14&type=section&id=%E6%8C%81%E7%BB%AD%E5%85%B3%E8%BF%9E%E4%BA%A4%E6%98%93) Sunrise Diagnostic Centre renewed its master supply agreement with BGI for equipment and reagents, with a 2023 annual cap of HK$120,000,000 - Sunrise Diagnostic Centre renewed its master supply agreement with BGI to purchase equipment, consumables, and reagents, with an annual cap of **HK$120,000,000** for 2023[67](index=67&type=chunk) [Purchase of Boron Neutron Capture Therapy Equipment](index=15&type=section&id=%E7%A1%BC%E4%B8%AD%E5%AD%90%E4%BF%98%E8%8E%B7%E6%B2%BB%E7%96%97%E8%AE%BE%E5%A4%87%E9%87%87%E8%B4%AD) The company contracted with Sumitomo to purchase Boron Neutron Capture Therapy components (approx HK$26,502 thousand) and related maintenance services (approx HK$21,919 thousand) - The company entered into a contract with Sumitomo to purchase Boron Neutron Capture Therapy components for an initial sales price of approximately **HK$26,502 thousand**[94](index=94&type=chunk) - Concurrently, it procured maintenance services for the BNCT equipment for a consideration of approximately **HK$21,919 thousand**[94](index=94&type=chunk) [Grant of Share Options](index=15&type=section&id=%E8%B4%AD%E8%82%A1%E6%9D%83%E6%8E%88%E4%BA%88) The company granted share options for 5,000,000 shares, representing approximately 0.52% of issued shares, to eligible participants with a three-year vesting period - The company granted share options for a total of **5,000,000 shares** to eligible participants, representing approximately **0.52%** of the total issued shares, with a three-year vesting period[94](index=94&type=chunk) [Future Prospects](index=15&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) The company plans to capitalize on post-pandemic demand for private healthcare, expand in the Greater Bay Area, and accelerate CAR-T trials and BNCT center construction [Expansion of Healthcare Services](index=15&type=section&id=%E5%8C%BB%E7%96%97%E4%BF%9D%E5%81%A5%E6%9C%8D%E5%8A%A1%E6%8B%93%E5%B1%95) Demand for health checks in Hong Kong is expected to grow, and the company is expanding into the Greater Bay Area and launching new tests like HPV DNA and colorectal cancer DNA - Demand for health checks and related medical services in Hong Kong is expected to continue growing, and the company is actively seeking collaborations to expand its business in the Greater Bay Area[71](index=71&type=chunk)[72](index=72&type=chunk) - New tests such as HPV DNA, colorectal cancer DNA, and cPassTM have been launched, and service agreements have been signed with operators of eight District Health Centres[72](index=72&type=chunk)[95](index=95&type=chunk) - The high-standard molecular biology laboratory now offers NGS-based cancer companion diagnostic tests and is preparing for FDA test product validation[97](index=97&type=chunk) [Progress in Oncologic Immunocellular Therapy](index=16&type=section&id=%E8%82%BF%E7%98%A4%E5%85%8D%E7%96%AB%E7%BB%86%E8%83%9E%E6%B2%BB%E7%96%97%E8%BF%9B%E5%B1%95) The Phase I clinical trial for the CAR-T drug LY007 is on schedule, with the first cohort of four patients having completed cell infusion - The Phase I clinical trial for its CAR-T drug, LY007 cell injection, is proceeding as planned, with the first cohort of four patients having completed cell infusion[73](index=73&type=chunk) - The company is confident that a sufficient number of patients will be enrolled in the trial by the end of 2023[73](index=73&type=chunk) [Construction of Boron Neutron Capture Therapy Center](index=16&type=section&id=%E7%A1%BC%E4%B8%AD%E5%AD%90%E4%BF%98%E8%8E%B7%E6%B2%BB%E7%96%97%E4%B8%AD%E5%BF%83%E5%BB%BA%E8%AE%BE) The BNCT center in the Boao Lecheng Pilot Zone has obtained its medical institution practice license, targeting completion and trial operation by late 2024 or early 2025 - Construction of the Boron Neutron Capture Therapy Center in the Boao Lecheng Pilot Zone is progressing, having obtained its medical institution practice license[74](index=74&type=chunk) - The target for completing construction, decoration, and equipment installation for trial operation is late 2024 or early 2025[74](index=74&type=chunk) - The company aims to become the first provider of BNCT cancer treatment services in the Greater China region[98](index=98&type=chunk) [Overall Strategy](index=17&type=section&id=%E6%95%B4%E4%BD%93%E6%88%98%E7%95%A5) The company will continue to enhance its diagnostic services, accelerate clinical trials and BNCT center construction, and develop innovative solutions using biomedical technology - The company will continue to offer tailored services to enrich its diagnostic and health check business[75](index=75&type=chunk) - It will strive to accelerate the construction of the trial and BNCT centers and develop innovative solutions by leveraging the latest advancements in biomedical research and technology[75](index=75&type=chunk) [Material Acquisitions and Disposals](index=17&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE) During the first quarter of 2023, the Group did not conduct any other material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the first quarter of 2023, the Group did not conduct any other material acquisitions or disposals of subsidiaries, associates, or joint ventures[76](index=76&type=chunk)[100](index=100&type=chunk) Shareholder and Corporate Governance Information [Directors' and Chief Executive's Interests](index=17&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%91%98%E6%9D%83%E7%9B%8A) As of March 31, 2023, Mr Liu Xiaolin held a 54.97% interest through a controlled corporation, and several directors held a total of 11,760,000 share options **Directors' and Chief Executive's Long Positions in Shares (As at March 31, 2023):** | Director's Name | Capacity and Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr Liu Xiaolin | Interest in a controlled corporation | 529,500,546 | 54.97% | **Directors' Long Positions in Share Options Granted by the Company (As at March 31, 2023):** | Director's Name | Date of Grant | Exercise Price per Share (HK$) | Total Long Position in Underlying Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Mr Liu Xiaolin | August 20, 2019 | 1.68 | 320,000 | 0.03% | | Mr He Xun | September 2, 2020 | 2.00 | 6,440,000 | 0.67% | | Ms Xu Haiyin | January 5, 2023 | 1.45 | 5,000,000 | 0.52% | | **Total** | | | **11,760,000** | **1.22%** | [Substantial Shareholders' Interests](index=19&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E4%B8%9C%E6%9D%83%E7%9B%8A) As of March 31, 2023, Genius Earn and its subsidiary held 54.97% of the company, while Guoyuan Securities and its affiliates held a combined 25.13% **Discloseable Interests of Substantial Shareholders in Shares and Underlying Shares (As at March 31, 2023):** | Shareholder Name | Capacity and Nature of Interest | Number of Ordinary Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Genius Earn | Interest in a controlled corporation | 529,500,546 | 54.97% | | Genius Lead | Beneficial owner | 529,500,546 | 54.97% | | Guoyuan Securities Investment (Hong Kong) Limited | Beneficial owner | 54,137,931 | 5.62% | | Guoyuan International Holdings Limited | Interest in a controlled corporation | 242,041,736 | 25.13% | | Guoyuan Securities Company Limited | Interest in a controlled corporation | 242,041,736 | 25.13% | | Richlane Ventures Limited | Beneficial owner | 58,000,000 | 6.02% | | Mr Ko Chun Shun | Interest in a controlled corporation | 95,545,000 | 9.92% | [Share Option Scheme](index=20&type=section&id=%E8%B4%AD%E8%82%A1%E6%9D%83%E8%AE%A1%E5%88%92) The company's share option scheme, adopted in 2014, had 19,515,000 options outstanding as of March 31, 2023, with 5,000,000 granted during the quarter - The Share Option Scheme was adopted on May 29, 2014, to reward eligible participants for their contributions to the Group's success[114](index=114&type=chunk)[132](index=132&type=chunk) - On January 6, 2023, **5,000,000 share options** were granted to Ms Xu Haiyin at an exercise price of **HK$1.45**, with no performance targets or clawback mechanisms[94](index=94&type=chunk)[137](index=137&type=chunk) **Details of Share Option Movements (For the three months ended March 31, 2023):** | Category of Grantee | Balance at January 1, 2023 | Granted during the period | Balance at March 31, 2023 | | :--- | :--- | :--- | :--- | | Directors | 6,760,000 | 5,000,000 | 11,760,000 | | Participants of connected entities | 3,240,000 | – | 3,240,000 | | Consultants | 3,335,000 | – | 3,335,000 | | Employees | 1,180,000 | – | 1,180,000 | | **Total** | **14,515,000** | **5,000,000** | **19,515,000** | [Share Award Scheme](index=23&type=section&id=%E8%82%A1%E4%BB%BD%E5%A5%96%E5%8A%B1%E8%AE%A1%E5%88%92) The company's share award scheme, adopted in 2021, allows for the granting of up to 10% of issued shares, with a 1% cap per participant - The Share Award Scheme was adopted on August 18, 2021, to recognize the contributions of eligible participants to the Group's success[119](index=119&type=chunk)[139](index=139&type=chunk) - As of the date of this announcement, the total number of shares available for award is **96,323,115**, representing **10%** of the issued shares[120](index=120&type=chunk)[139](index=139&type=chunk) - The maximum entitlement for any one participant under the scheme shall not exceed **1%** of the total number of issued shares of the Company[121](index=121&type=chunk)[140](index=140&type=chunk) - The Share Award Scheme is valid for a period of 10 years and will expire on August 17, 2031[143](index=143&type=chunk) [Directors' Rights to Acquire Shares and Debentures](index=24&type=section&id=%E8%91%A3%E4%BA%8B%E6%94%B6%E8%B4%AD%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%80%BA%E6%9D%83%E8%AF%81%E7%9A%84%E6%9D%83%E5%88%A9) No arrangements were made to enable directors to acquire benefits by means of the acquisition of shares in or debentures of the company, other than the granted share options - Apart from the share options granted to three directors, no arrangements were entered into by the Company to enable directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate[143](index=143&type=chunk) [Pre-emptive Rights](index=24&type=section&id=%E4%BC%98%E5%85%88%E8%B4%AD%E4%B9%B0%E6%9D%83) The company's Bye-laws contain no provisions for pre-emptive rights, and there are no such restrictions under Bermuda law - There are no provisions for pre-emptive rights in the Company's Bye-laws or restrictions on such rights under Bermuda law[144](index=144&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=24&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) During the first quarter of 2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the first quarter of 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[145](index=145&type=chunk) [Compliance with the Code of Conduct for Directors' Securities Transactions](index=24&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E8%A1%8C%E4%B8%BA%E5%AE%88%E5%88%99) The company confirmed that all directors have complied with the required standard of dealings and the code of conduct for directors' securities transactions during Q1 2023 - All directors have complied with the required standard of dealings and the code of conduct for directors' securities transactions throughout the first quarter of 2023[145](index=145&type=chunk) [Corporate Governance Code](index=25&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A7%84%E5%AE%88%E5%88%99) During the first quarter of 2023, the company has complied with the code provisions of the Corporate Governance Code as set out in the GEM Listing Rules - During the first quarter of 2023, the Company has complied with the code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules[146](index=146&type=chunk) [Competing Interests and Conflicts of Interest](index=25&type=section&id=%E7%AB%9E%E4%BA%89%E6%9D%83%E7%9B%8A%E5%8F%8A%E5%88%A9%E7%9B%8A%E5%86%B2%E7%AA%81) During Q1 2023, no director or controlling shareholder had any interest in a business that competes with the Group, nor were there any conflicts of interest - During the first quarter of 2023, no director, controlling shareholder, or their respective close associates had any interest in any business that competes or may compete with the Group's business, nor were there any conflicts of interest[146](index=146&type=chunk) [Audit Committee](index=25&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited first-quarter results and discussed internal control matters - The Audit Committee, consisting of three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated first-quarter results[147](index=147&type=chunk)[150](index=150&type=chunk) [Sufficiency of Public Float](index=25&type=section&id=%E5%85%AC%E4%BC%97%E6%8C%81%E8%82%A1%E9%87%8F%E4%B9%8B%E5%85%85%E8%B6%B3%E6%80%A7) As of the date of this announcement, the company has maintained the public float as specified under the GEM Listing Rules - As of the date of this announcement, the Company has maintained the public float as specified under the GEM Listing Rules[151](index=151&type=chunk) Conclusion [Conclusion](index=26&type=section&id=%E7%BB%93%E8%AF%AD) The Board of Directors thanks all shareholders for their support and has provided a list of its members and announcement publication channels - The Board of Directors thanks all shareholders for their support of the Company[152](index=152&type=chunk) - The Board of Directors comprises four executive directors and three independent non-executive directors[103](index=103&type=chunk) - This announcement will be published on the websites of The Stock Exchange of Hong Kong Limited and the Company[103](index=103&type=chunk)

Financial Performance - The total revenue for the year ended December 31, 2022, was approximately HKD 1,851,532,000, representing a significant increase of over 197% compared to the previous year[8]. - Gross profit for the same period was approximately HKD 1,100,957,000, reflecting a year-on-year growth of 208%, with a gross margin of 59.46% (up from 57.40% in the previous year)[8]. - The company reported record revenue and profit during the fiscal year due to high demand for nucleic acid testing services amid the COVID-19 pandemic[48]. - The net profit attributable to the company's owners increased significantly to approximately HKD 258,087,000 in 2022 from HKD 19,385,000 in 2021, driven by high demand for COVID-19 testing services[175]. - Revenue from the medical laboratory testing and health check services increased from approximately HKD 607,776,000 in 2021 to approximately HKD 1,619,568,000 in 2022, representing a 166% increase[163]. COVID-19 Testing Services - The company completed over 10,000,000 COVID-19 nucleic acid tests during the year, an increase of over 183% compared to 3,600,000 tests completed in the previous year[13]. - The demand for medical laboratory testing services and health check services, including COVID-19 nucleic acid testing, remained high due to ongoing COVID-19 outbreaks[155]. - The company became one of the designated service providers for COVID-19 rapid nucleic acid testing at Shenzhen Bay Port and Hong Kong-Zhuhai-Macao Bridge Hong Kong Port for travelers leaving Hong Kong[155]. - The company provided over 15,000,000 COVID-19 nucleic acid tests during the pandemic, supporting the Hong Kong government's community testing initiatives[160]. Business Expansion and New Services - The company launched new medical laboratory testing and health check services, including pre-vaccination health checks and cancer screening tests, to enhance competitiveness in the post-pandemic era[14]. - The company has established six service agreements with regional health center operators to provide laboratory testing services for various diseases, including diabetes and colorectal cancer[15]. - A high-standard molecular biology laboratory has been established in collaboration with Pillar Biosciences, Inc. to enhance precision diagnostic testing services[15]. - The company aims to achieve further breakthroughs in business performance through the commercialization of a range of medical laboratory testing and healthcare services in the coming years[2]. - The company is focusing on restoring non-COVID-19 medical diagnostic and treatment services as the pandemic subsides[48]. Environmental Commitment - The company is committed to reducing its environmental footprint through sustainable practices in R&D, medical testing, and precision cancer diagnostics[73]. - The total greenhouse gas emissions related to the company's operations during the reporting period were estimated at 11,040 tons of CO2 equivalent, primarily due to increased business activities and higher electricity consumption[87]. - The company aims to reduce greenhouse gas emissions as part of its long-term environmental goals[126]. - The company has established an ESG committee to monitor progress and develop strategies to achieve ESG goals, recognizing the importance of ESG considerations for long-term success[73]. - The company has set policies to ensure compliance with all applicable environmental laws and regulations, fostering an environmentally conscious culture among employees[74]. Research and Development - Significant progress has been made in the research and development of immune cell therapy, with clinical trials for investigational new drugs currently underway[48]. - The company received approval for its investigational new drug (IND) application for LY007, a CAR-T therapy product, marking a significant milestone in its oncology treatment offerings[166]. - The company is seeking collaborations with contract research organizations and local hospitals for next-generation sequencing (NGS) cancer diagnostic tests[161]. Capital and Financing - The company issued convertible bonds totaling USD 10,000,000, equivalent to approximately HKD 77,800,000, with a conversion price of HKD 1.45 per share[125]. - The net proceeds from the convertible bonds are allocated as follows: HKD 23,340,000 for investment in boron neutron capture therapy projects and HKD 15,124,000 for R&D costs and general operating funds[125]. - The company entered a five-year exclusive distribution agreement for NMN products, allowing distribution rights in regions including Hong Kong, Macau, and several Southeast Asian countries[39]. Waste Management and Compliance - The group has established strict policies for the management of medical waste to ensure proper disposal[90]. - The company has implemented strict health and safety measures during the COVID-19 pandemic to ensure employee safety and minimize virus transmission[180]. - The company aims to maintain a zero-violation record in hazardous waste management, reflecting its commitment to compliance and safety standards[183]. - The company has not recorded any violations of environmental laws during the reporting period[128]. Employee and Operational Metrics - The total number of full-time employees was 260, with an overall turnover rate of 32% during the reporting period[140]. - The turnover rate for part-time employees was 18%, with 17 part-time employees reported[141]. - The employee turnover rate for males was 30% and for females was 31%[141]. - The turnover rate for employees under 30 years old was 35%, while it was 27% for those aged 30 to 50, and 31% for those over 50[141].

[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]