Industry Overview - Regenerative medicine (RM) utilizes biological and engineering theories to promote self-repair and regeneration of the body, or to construct new tissues and organs for repairing, regenerating, and replacing damaged tissues and organs [1][4] - The global regenerative medicine market is expanding, with the market size projected to grow from $20.04 billion in 2021 to $35.82 billion in 2024 [1][12] Market Status - Regenerative medicine is considered the "third medical revolution" following drug and surgical treatments, becoming a core component of life science strategies globally [6][12] - The industry includes upstream raw materials and equipment supply, midstream product R&D and production, and downstream application through medical institutions and aesthetic organizations [4][12] Policy and Regulatory Environment - Various countries have implemented policies to promote the development of regenerative medicine, such as the U.S. "21st Century Cures Act" and the EU's regulations on biotechnology [7][9] - In China, policies have been established to support the clinical application of regenerative medicine technologies, including the management of stem cell therapies and the promotion of innovative medical technologies [9][23] Market Competition - The regenerative medicine sector has attracted numerous companies, with major players including Johnson & Johnson, Bard, Geistlich, and domestic firms like Zhenghai Biological, Guanhou Biological, and Maipu Medical [16][18] - The market is characterized by a diverse range of products and applications, with companies focusing on specific therapeutic areas such as cancer treatment, tissue repair, and organ transplantation [18][20] Development Trends - The industry is witnessing technological integration and innovation, with advancements in 3D bioprinting, gene editing, and artificial intelligence enhancing treatment efficacy [22][24] - The dual drive of policy support and capital investment is accelerating the commercialization of regenerative medicine, with increasing coverage of medical insurance for regenerative products [23][24]

Financial Performance - The Group recorded a revenue of approximately HK$90.62 million for the year ended 31 December 2024, representing an increase of approximately 30.41% from last year (2023: approximately HK$69.49 million) [35] - Gross profit increased by approximately 196.83% to approximately HK$57.65 million from last year (2023: approximately HK$19.42 million) due to improved cost efficiency [35] - The Group achieved a profit for the year of approximately HK$17.75 million, a turnaround from a loss of approximately HK$107.70 million in 2023 [36] - Total operating expenses for the year ended 31 December 2024 amounted to approximately HK$51.52 million, representing an increase of approximately 13.14% compared to last year (2023: approximately HK$45.54 million) [37] - As at 31 December 2024, the Group recorded net current liabilities of approximately HK$0.56 million, a shift from net current assets of approximately HK$20.79 million in 2023 [38] - Net assets increased to approximately HK$25.20 million as at 31 December 2024, up from approximately HK$11.79 million in 2023, primarily due to the profit for the year [38] - Cash and bank balances as at 31 December 2024 were approximately HK$22.70 million, significantly higher than HK$3.33 million in 2023 [39] Strategic Initiatives - The Group expanded its service portfolio to include comprehensive medical, aesthetic, and value-added healthcare solutions, enhancing its position in Hong Kong's premium healthcare sector [16] - A key initiative in 2024 involved medical-academic exchange programs, which generated sustainable revenue streams and deepened trust among high net-worth individuals [17] - The Board implemented three core strategies focused on attracting like-minded partners to foster a collaborative ecosystem in the medical industry [17] - The Group's strategy includes optimizing asset portfolios and enhancing operational efficiency to secure long-term growth [21] - Future prospects involve expanding business scope in the healthcare industry and reallocating resources to maintain leadership in healthcare products and services [31] Credit Risk and Expected Credit Loss - The reversal of expected credit loss on Other Receivables for the year ended 31 December 2024 amounts to approximately HK$12,290,000, compared to a provision of approximately HK$83,001,000 for the year ended 31 December 2023 [66] - The lifetime Probability of Default (PD) for Other Receivables under the 5-year repayment plan is 45.8%, with a Loss Given Default (LGD) of 61.2% [73] - For Other Receivables that are not overdue and not under the repayment plan, the lifetime PD is 1.2%, with an LGD of 61.7% [73] - The significant changes in the value of inputs for PD assessment from FY2023 to FY2024 are noted, indicating a shift in credit risk evaluation [79] - The Valuer utilized Moody's 2024 default rate research to determine PD and LGD, reflecting a comprehensive approach to credit risk assessment [75] - The ECL calculation follows the formula: ECL = Exposure at default x PD x LGD, as per HKFRS 9 [67] - The assessment of Other Receivables includes historical aging schedules and industry credit data to ensure reliable measurement of ECL [78] - Forward-looking adjustments in the ECL assessment were made using regression models based on macroeconomic indicators and historical market default data [75] - The significant reversal in expected credit loss indicates an improvement in the credit quality of Other Receivables [66] - The expected credit loss (ECL) rates for the fiscal year ending December 31, 2024, are projected to be significantly lower, with a lifetime probability of default (PD) of 1.2% for balances not overdue and not under a repayment plan, and 45.8% for balances under the repayment plan [81] Corporate Governance - The company is committed to maintaining high standards of corporate governance practices, which provide a solid foundation for management quality and accountability to shareholders [105] - The company has complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for the deviation regarding the roles of chairman and chief executive officer being held by the same individual [106] - The board believes that having the same person serve as both chairman and CEO can enhance the execution of business strategies and operational effectiveness [106] - The company will continue to review its governance structure and appoint suitable candidates for the roles of chairman or CEO as necessary to ensure compliance with the Corporate Governance Code [106] - The company has established a framework to attract and retain high-quality management and promote sound internal control [105] - The board is dedicated to meeting the expectations of various stakeholders through transparency and accountability [105] - The company has a history of strong governance practices, which are essential for achieving its strategic objectives [105] - The board will keep reviewing its governance practices to align with the latest developments in corporate governance standards [106] Board Composition and Diversity - As of December 31, 2024, the Board consists of four Directors, including one executive Director and three independent non-executive Directors [116] - The Company has appointed five Directors during the Reporting Period, with one female Director among them [125] - Male employees account for 29.41% and female employees account for 70.59% of the Group's total workforce, indicating a gender ratio within a reasonable range [126] - The Board has established measurable objectives to implement the Board Diversity Policy, focusing on various diversity perspectives including gender, age, and professional experience [124] - The current composition of the Board includes core competencies in accounting, finance, business management, legal profession, and merger and acquisition, deemed appropriate for the Company's operations [129] Audit and Risk Management - The Audit Committee consists of independent non-executive directors, with at least one member possessing appropriate professional qualifications or financial management expertise [174] - The Audit Committee met twice during the Reporting Period to review and supervise the financial reporting process and internal control of the Group [184] - The Audit Committee reviewed the Group's consolidated financial statements for the six months ended June 30, 2024, and for the year ended December 31, 2024 [183] - All members of the Audit Committee are independent non-executive directors, ensuring unbiased oversight [178] - The Audit Committee has the authority to obtain independent professional advice and has full access to management for effective duty discharge [180] - The Audit Committee's responsibilities include reviewing compliance with accounting principles and GEM Listing Rules related to financial reporting [182]

Financial Performance - The company's revenue for the year ended December 31, 2024, was HKD 390.617 million, an increase of 12.3% compared to HKD 69.487 million in 2023[4] - Gross profit for the same period was HKD 57.654 million, significantly up from HKD 19.423 million, reflecting a gross margin improvement[4] - Operating profit for the year was HKD 18.884 million, a turnaround from an operating loss of HKD 106.720 million in the previous year[4] - The company reported a net profit attributable to shareholders of HKD 17.752 million, compared to a net loss of HKD 107.699 million in 2023[4] - The basic earnings per share improved to HKD 5.83 from a loss per share of HKD 37.60 in the previous year[4] - The group reported a segment profit of HKD 37,683,000 for the aesthetic medical and beauty services division in 2024, compared to a segment loss of HKD 90,366,000 in 2023[21] - The segment loss for medical services was HKD 3,471,000 in 2024, compared to a loss of HKD 2,633,000 in 2023, indicating a worsening performance[21] - The group achieved a net profit of approximately HKD 17,750,000, reversing a loss of about HKD 107,700,000 in the previous year[38] Assets and Liabilities - Total assets decreased to HKD 135.709 million from HKD 185.897 million in the previous year, indicating a reduction in asset base[6] - Total liabilities also decreased to HKD 110.512 million from HKD 174.104 million, showing improved financial leverage[6] - The group's total assets decreased from HKD 185,897,000 in 2023 to HKD 135,709,000 in 2024, a decline of approximately 27%[22] - The group’s total liabilities decreased from HKD 174,104,000 in 2023 to HKD 110,512,000 in 2024, a reduction of approximately 36.5%[22] - Current liabilities due within one year amount to approximately HKD 58,869,000, while cash and bank balances included in current assets are approximately HKD 22,702,000[9] - The group’s asset-liability ratio based on shareholder loans and total equity was 1.95 as of December 31, 2024, down from 2.99 in the previous year[42] Cash Flow and Funding - Cash and bank balances increased significantly from HKD 3,334,000 in 2023 to HKD 22,702,000 in 2024, reflecting a growth of about 581%[22] - The company is actively seeking additional funding through equity financing to support operational capital and repay existing debts[10] - The major shareholder, Mr. Wang Chuang, has confirmed financial support to the group until June 30, 2026, to meet due liabilities and continue operations without significant business reduction[10] - The group reported a foreign exchange loss of HKD 4.348 million, compared to a loss of HKD 0.424 million in the previous year, impacting overall comprehensive income[5] Operational Plans and Strategies - The company plans to focus on expanding its market presence and enhancing product development in the upcoming fiscal year[5] - The group plans to continue expanding its business in the healthcare sector and will reallocate resources as necessary to maintain its leading position in health products and services[37] Compliance and Governance - The independent auditor expressed a qualified opinion regarding the financial statements due to significant uncertainties affecting the group's ability to continue as a going concern[62] - The group has complied with all provisions of the corporate governance code, except for the separation of roles between the Chairman and the CEO, which are held by the same individual[53] - The audit committee, composed of all independent non-executive directors, reviewed the group's performance for the year ending December 31, 2024[54] - Directors confirm that the information in the announcement is accurate and complete, with no misleading or fraudulent elements[66] Accounting Policies and Standards - The group has adopted new and revised standards effective from January 1, 2024, but these have not significantly impacted the group's performance and financial position[12] - The group has not made significant changes to its major accounting policies or made retrospective adjustments due to the adoption of new standards[12] - The group expects no significant financial impact from the adoption of the new standards and is currently reviewing its accounting policy disclosures to ensure compliance[16] - The group plans to adopt the new Hong Kong Financial Reporting Standard No. 18 starting from January 1, 2027, which will require retrospective application for comparative information[16] Employee and Compensation - As of December 31, 2024, the total employee compensation (including director remuneration and retirement benefit plan contributions) was approximately HKD 16,580,000, an increase from HKD 15,990,000 in 2023[51] - The group had 34 employees in Hong Kong and mainland China as of December 31, 2024, down from 46 employees in 2023[51] Dividends and Shareholder Returns - The group did not propose any dividend payments for both years, maintaining a policy of no dividends[26] - The company did not recommend the distribution of any dividends for the year ending December 31, 2024[55] Miscellaneous - The group has not disclosed any specific plans for major investments or capital assets as of December 31, 2024[50] - There were no significant events after the reporting period[56] - The company did not engage in any purchases, sales, or redemptions of its listed securities during the year[52] - The announcement complies with GEM listing rules and aims to provide relevant information about the company[66] - The company will publish the notice of the annual general meeting on its website and the Stock Exchange website[63]

CRMI 中國再生醫學 CHINA REGENERATIVE MEDICINE INTERNATIONAL LIMITED 中國再生醫學國際有限公司 Stock Code 股份代號：8158 2024 INTERIM REPORT 中期報告 CHARACTERISTICS OF GEM ("GEM") OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE 香港聯合交易所有限公司（「聯交 所」）GEM（「GEM」）之特點 | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

[Corporate Information](index=4&type=section&id=Corporate%20Information) The company's board comprises executive, non-executive, and independent non-executive directors, with Mr. Wang Chuang serving as Chairman and CEO [Directors and Company Secretary](index=4&type=section&id=Directors%20and%20Company%20Secretary) The board consists of executive, non-executive, and independent non-executive directors, with Mr. Wang Chuang as Chairman and CEO; Mr. Tsang Ho Yin resigned as non-executive director, and Mr. Wong Po Tin was appointed company secretary - Mr. Wang Chuang serves as Chairman and Chief Executive Officer, also acting as Compliance Officer and Authorised Representative[5](index=5&type=chunk)[6](index=6&type=chunk) - Mr. Tsang Ho Yin resigned as a non-executive director on August 20, 2024[5](index=5&type=chunk) - Mr. Wong Po Tin was appointed Company Secretary and Authorised Representative on July 2, 2024, with Mr. Yau Woon Fat resigning on the same day[5](index=5&type=chunk)[6](index=6&type=chunk) [Committees](index=4&type=section&id=Committees) The company has Nomination, Remuneration, and Audit Committees to ensure effective corporate governance, chaired by Dr. Liu Ming and Mr. Leung Man Fai respectively - The Nomination Committee is chaired by Dr. Liu Ming, with members Mr. Leung Man Fai and Ms. Fok Chun Yuk[5](index=5&type=chunk) - The Remuneration Committee is chaired by Dr. Liu Ming, with members Ms. Fok Chun Yuk and Mr. Leung Man Fai; Mr. Tsang Ho Yin resigned on August 20, 2024[5](index=5&type=chunk) - The Audit Committee is chaired by Mr. Leung Man Fai, with members Dr. Liu Ming and Ms. Fok Chun Yuk[5](index=5&type=chunk) [Key Offices and Advisors](index=5&type=section&id=Key%20Offices%20and%20Advisors) The company is registered in the Cayman Islands with its principal Hong Kong office in Tsim Sha Tsui, engaging HSBC as a primary bank and Zhongzheng Tianheng CPA as auditor - The company's registered office is in the Cayman Islands, and its principal place of business in Hong Kong is located in Miramar Tower, Tsim Sha Tsui, Kowloon[6](index=6&type=chunk) - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, Dah Sing Bank, Limited, Hua Xia Bank, and Jiangnan Rural Commercial Bank[6](index=6&type=chunk) - The auditor is Zhongzheng Tianheng CPA Limited, and legal advisors include Conyers Dill & Pearman (Cayman Islands law) and Yau Woon Fat & Co. (Hong Kong law)[6](index=6&type=chunk)[7](index=7&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements provide a summary of the company's financial performance and position for the period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, revenue decreased by 19.44% to HKD 59,785 thousand, but gross profit increased by 29.53% to HKD 39,490 thousand, with profit for the period rising 31.86% to HKD 16,828 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2024 (HKD thousand) | 2023 (HKD thousand) (Restated) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 59,785 | 74,216 | -19.44% | | Cost of sales | (20,295) | (43,729) | -53.60% | | Gross profit | 39,490 | 30,487 | +29.53% | | Other income, gains and losses | 83 | 20 | +315.00% | | Selling and distribution expenses | (3,116) | (3,352) | -7.04% | | Administrative and other expenses | (18,991) | (15,725) | +20.77% | | Finance costs | (638) | (540) | +18.15% | | Profit before tax | 16,828 | 10,890 | +54.53% | | Income tax credit | – | 1,872 | -100.00% | | Profit for the period | 16,828 | 12,762 | +31.86% | | Other comprehensive expenses | (3,486) | (5,037) | -30.80% | | Total comprehensive income for the period | 13,342 | 7,725 | +72.72% | | Basic earnings per share (HK cents) | 5.53 | 4.47 | +23.71% | | Diluted earnings per share (HK cents) | 5.53 | 4.47 | +23.71% | - The decrease in revenue was primarily due to the absence of the retaliatory consumption by mainland Chinese customers in 2024, which occurred in 2023 after the lifting of anti-epidemic measures[83](index=83&type=chunk) - The increase in gross profit was mainly attributable to a significant decrease in cost of sales[9](index=9&type=chunk) [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, net current assets and total equity increased, driven by the profit for the period, with total current assets at HKD 132,869 thousand and net current assets at HKD 34,656 thousand Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2024 (HKD thousand) | December 31, 2023 (HKD thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 2,995 | 2,873 | +4.25% | | Right-of-use assets | 9,210 | 14,445 | -36.11% | | **Current assets** | | | | | Inventories | 296 | 445 | -33.50% | | Trade receivables | 1,551 | 1,196 | +29.68% | | Deposits, prepayments and other receivables | 129,175 | 163,604 | -21.05% | | Cash and bank balances | 1,847 | 3,334 | -44.59% | | **Current liabilities** | | | | | Trade payables | 5,512 | 2,473 | +122.97% | | Accruals and other payables | 19,510 | 14,910 | +30.85% | | Contract liabilities | 18,908 | 81,090 | -76.68% | | Lease liabilities | 9,667 | 10,395 | -7.00% | | Shareholder loans | 19,633 | 13,629 | +44.06% | | Current tax liabilities | 24,983 | 25,293 | -1.23% | | **Net current assets** | 34,656 | 20,789 | +66.70% | | **Total equity** | 25,135 | 11,793 | +113.13% | - The increase in net current assets and total equity was primarily attributable to the operating profit of approximately **HKD 16.83 million** for the six months ended June 30, 2024[84](index=84&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity increased from HKD 11,733 thousand to HKD 25,135 thousand for the six months ended June 30, 2024, primarily due to profit for the period, partially offset by exchange losses Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | January 1, 2024 (HKD thousand) | Profit for the period (HKD thousand) | Other comprehensive expenses (HKD thousand) | June 30, 2024 (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 60,850 | – | – | 60,850 | | Share premium | 3,215,749 | – | – | 3,215,749 | | Exchange reserve | (11,188) | – | (3,486) | (14,675) | | Special reserve | (200) | – | – | (200) | | Other reserves | (413,100) | – | – | (413,100) | | Share option reserve | 40,609 | – | – | 40,609 | | Accumulated losses | (2,880,926) | 16,828 | – | (2,864,098) | | **Total equity** | **11,793** | **16,828** | **(3,486)** | **25,135** | - **Profit for the period of HKD 16,828 thousand** was the main contributor to the growth in total equity[23](index=23&type=chunk) - Exchange losses had a negative impact on total equity, amounting to **HKD 3,486 thousand** during the period[23](index=23&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, the company reported net cash outflow from operating activities of HKD 151 thousand and investing activities of HKD 529 thousand, offset by net cash inflow from financing activities of HKD 364 thousand Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (151) | 79 | | Net cash used in investing activities | (529) | (110) | | Net cash generated from / (used in) financing activities | 364 | (1,942) | | Net decrease in cash and cash equivalents | (316) | (1,973) | | Effect of foreign exchange rate changes, net | (1,171) | 933 | | Cash and cash equivalents at beginning of period | 3,334 | 1,849 | | Cash and cash equivalents at end of period | 1,847 | 809 | - Operating activities shifted from net inflow to net outflow, reflecting pressure on operating cash flow[27](index=27&type=chunk) - Cash flow from financing activities changed from net outflow to net inflow, likely related to an increase in shareholder loans[27](index=27&type=chunk)[84](index=84&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, segment information, and financial instrument details [1. General Information](index=14&type=section&id=1.%20General%20Information) The company, incorporated in the Cayman Islands, primarily engages in investment holding, with subsidiaries providing aesthetic medical, beauty, and medical services, and its financial statements are presented in HKD - The company's principal business is investment holding, with subsidiaries providing aesthetic medical and beauty services and medical services[28](index=28&type=chunk) - The financial statements are presented in Hong Kong Dollars, consistent with the Group's functional currency[28](index=28&type=chunk) [2. Basis of Preparation](index=14&type=section&id=2.%20Basis%20of%20Preparation) Interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, reviewed by the Audit Committee, and include a restatement of 2023 comparatives for revenue recognition - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules, and have been reviewed by the Audit Committee[28](index=28&type=chunk)[29](index=29&type=chunk) - The comparative financial statements for 2023 were restated due to an adjustment in the recognition method for agency business revenue, changing from a gross basis to a net basis, resulting in a **HKD 25,875 thousand** reduction in both 2023 revenue and cost of sales[29](index=29&type=chunk)[31](index=31&type=chunk) - The restatement had no impact on 2023 basic and diluted earnings per share or accumulated losses[33](index=33&type=chunk) - The agency business ceased operations in May 2023 and made no contribution to the Group in the first half of 2024[32](index=32&type=chunk) [3. Revenue and Other Income, Gain and Loss](index=17&type=section&id=3.%20Revenue%20and%20Other%20Income%2C%20Gain%20and%20Loss) For the six months ended June 30, 2024, the group's revenue primarily derived from services, with significant shifts between point-in-time and over-time recognition, and other income included bank interest and government grants Revenue Composition (For the six months ended June 30) | Revenue Recognition Method | 2024 (HKD thousand) | 2023 (HKD thousand) (Restated) | | :--- | :--- | :--- | | At a point in time | 25,742 | 3,291 | | Over time | 34,043 | 70,925 | | **Total Revenue** | **59,785** | **74,216** | Other Income, Gains and Losses (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Bank interest income | 3 | 9 | | Government grants | 36 | – | | Gain on disposal of property, plant and equipment | – | 1 | | Others | 44 | 10 | | **Total** | **83** | **20** | - Point-in-time revenue recognition significantly increased in 2024, while over-time revenue recognition substantially decreased[38](index=38&type=chunk) [4. Segment Information](index=18&type=section&id=4.%20Segment%20Information) The group operates in aesthetic medical and beauty services and medical services, with the former contributing most revenue and profit, and revenue primarily generated from Hong Kong - The Group's operating segments include aesthetic medical and beauty services and medical services[40](index=40&type=chunk)[42](index=42&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2024 Revenue (HKD thousand) | 2024 Segment Profit/(Loss) (HKD thousand) | 2023 Revenue (HKD thousand) (Restated) | 2023 Segment Profit (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | Aesthetic medical and beauty services | 56,799 | 28,844 | 70,655 | 29,028 | | Medical services | 2,986 | (1,872) | 3,561 | 1,316 | | **Total** | **59,785** | **26,972** | **74,216** | **30,344** | - In 2024, revenue from aesthetic medical and beauty services decreased year-on-year, but segment profit remained stable; medical services saw a decline in both revenue and profit, turning into a loss[45](index=45&type=chunk)[46](index=46&type=chunk) Revenue by Geographical Location (For the six months ended June 30) | Geographical Location | 2024 (HKD thousand) | 2023 (HKD thousand) (Restated) | | :--- | :--- | :--- | | Hong Kong | 59,368 | 74,216 | | China | 417 | – | | **Total** | **59,785** | **74,216** | - In 2024, the China region began contributing revenue, while revenue from the Hong Kong region decreased[52](index=52&type=chunk) [5. Finance Costs](index=21&type=section&id=5.%20Finance%20Costs) For the six months ended June 30, 2024, total finance costs were HKD 638 thousand, mainly comprising interest on lease liabilities and a new item of interest on shareholder loans Finance Costs (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 314 | 540 | | Interest on shareholder loans | 324 | – | | **Total** | **638** | **540** | - New interest on shareholder loans amounted to **HKD 324 thousand** in 2024, arising from an unsecured shareholder loan of **HKD 21,579 thousand** with an annual interest rate of 3%[54](index=54&type=chunk)[55](index=55&type=chunk) [6. Profit Before Tax](index=22&type=section&id=6.%20Profit%20Before%20Tax) For the six months ended June 30, 2024, profit before tax was determined after deducting depreciation, advertising, cost of inventories sold, and significantly increased employee benefit expenses Profit Before Tax Deductions (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) (Restated) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 410 | 278 | | Depreciation of right-of-use assets | 5,235 | 5,432 | | Advertising and marketing expenses | 548 | 745 | | Cost of inventories sold | 4,757 | 3,838 | | Employee benefit expenses | 8,353 | 6,060 | - Employee benefit expenses increased by **37.84%** year-on-year, primarily due to the Group commencing operations in China in June 2023, leading to higher staff costs[56](index=56&type=chunk)[83](index=83&type=chunk) [7. Income Tax Credit](index=22&type=section&id=7.%20Income%20Tax%20Credit) For the six months ended June 30, 2024, no provision was made for Hong Kong profits tax or PRC enterprise income tax due to sufficient tax losses and no assessable profits respectively Income Tax Credit (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Current tax | – | – | | Deferred tax expense | – | 1,872 | | **Total** | **–** | **1,872** | - No provision was made for Hong Kong profits tax as there were sufficient tax losses available to offset assessable profits[60](index=60&type=chunk)[63](index=63&type=chunk) - No provision was made for PRC enterprise income tax as no assessable profits were generated during the period[59](index=59&type=chunk)[63](index=63&type=chunk) [8. Dividends](index=23&type=section&id=8.%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[61](index=61&type=chunk)[64](index=64&type=chunk) [9. Earnings Per Share](index=23&type=section&id=9.%20Earnings%20Per%20Share) For the six months ended June 30, 2024, basic earnings per share increased to 5.53 HK cents, with diluted earnings per share being identical due to non-dilutive share options Earnings Per Share (For the six months ended June 30) | Indicator | 2024 (HK cents) | 2023 (HK cents) | | :--- | :--- | :--- | | Basic earnings per share | 5.53 | 4.47 | | Diluted earnings per share | 5.53 | 4.47 | Earnings Per Share Calculation Data (For the six months ended June 30) | Indicator | 2024 (HKD thousand/thousand shares) | 2023 (HKD thousand/thousand shares) | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company | 16,828 | 12,762 | | Weighted average number of ordinary shares in issue | 304,252 | 285,429 | - Diluted earnings per share are the same as basic earnings per share because the exercise price of share options was higher than the average market price of shares, and there were no other potential dilutive ordinary shares[67](index=67&type=chunk)[69](index=69&type=chunk) - On September 6, 2023, the company effected a share consolidation of ten shares into one, and comparative figures have been restated accordingly[68](index=68&type=chunk)[69](index=69&type=chunk) [10. Trade Receivables, Deposits, Prepayments and Other Receivables](index=25&type=section&id=10.%20Trade%20Receivables%2C%20Deposits%2C%20Prepayments%20and%20Other%20Receivables) As of June 30, 2024, trade receivables increased to HKD 1,551 thousand, while deposits, prepayments, and other receivables decreased to HKD 129,175 thousand, with most trade receivables due within 90 days Trade Receivables, Deposits, Prepayments and Other Receivables (As of June 30) | Item | June 30, 2024 (HKD thousand) | December 31, 2023 (HKD thousand) | | :--- | :--- | :--- | | Trade receivables | 1,551 | 1,196 | | Lease deposits | 5,657 | 5,657 | | Other deposits | 888 | 1,328 | | Prepayments | 96 | 189 | | Other receivables (net of recognised impairment losses) | 122,534 | 156,430 | | **Total** | **129,175** | **163,604** | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2024 (HKD thousand) | December 31, 2023 (HKD thousand) | | :--- | :--- | :--- | | 0–90 days | 1,403 | 646 | | 91–180 days | 3 | 235 | | 181–270 days | 143 | 310 | | 271–360 days | – | – | | Over 360 days | 2 | 5 | | **Total** | **1,551** | **1,196** | - The average credit period granted to customers by the Group is **60-180 days**, consistent with the prior year[73](index=73&type=chunk) [11. Trade Payables](index=26&type=section&id=11.%20Trade%20Payables) As of June 30, 2024, trade payables significantly increased to HKD 5,512 thousand, primarily due within 90 days, with an average credit period of 30-60 days from suppliers Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2024 (HKD thousand) | December 31, 2023 (HKD thousand) | | :--- | :--- | :--- | | 0–30 days | 2,446 | 2,099 | | 31–60 days | 1,226 | 374 | | 61–90 days | 1,667 | – | | 91–120 days | – | – | | 121–150 days | 173 | – | | **Total** | **5,512** | **2,473** | - Trade payables increased by **122.97%** year-on-year, primarily concentrated within 0-90 days[74](index=74&type=chunk) - The average credit period granted by suppliers to the Group is **30-60 days**, consistent with the prior year[74](index=74&type=chunk) [12. Share Capital](index=26&type=section&id=12.%20Share%20Capital) As of June 30, 2024, the company's authorized share capital was 500,000,000 ordinary shares of HKD 0.20 each, with 304,252,480 shares issued and fully paid, totaling HKD 60,850 thousand Share Capital Information (As of June 30) | Item | Number of Shares | Par Value (HKD thousand) | | :--- | :--- | :--- | | Authorised share capital (ordinary shares of HKD 0.20 each) | 500,000,000 | 100,000 | | Issued and fully paid share capital (ordinary shares of HKD 0.20 each) | 304,252,480 | 60,850 | - The share capital structure remained stable during the reporting period, with no new issues[75](index=75&type=chunk) [13. Related Party Transactions](index=27&type=section&id=13.%20Related%20Party%20Transactions) For the six months ended June 30, 2024, total remuneration for key management personnel decreased to HKD 609 thousand compared to the prior year Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2024 (HKD thousand) | 2023 (HKD thousand) | | :--- | :--- | :--- | | Salaries and other benefits | 600 | 1,000 | | Contributions to retirement benefit schemes | 9 | 15 | | **Total** | **609** | **1,015** | - Key management personnel remuneration decreased by **39.90%** year-on-year[78](index=78&type=chunk) [14. Events After the Reporting Period](index=27&type=section&id=14.%20Events%20After%20the%20Reporting%20Period) No significant events occurred after the reporting period up to the date of this report - No significant events occurred after the reporting period up to the date of this report[80](index=80&type=chunk)[81](index=81&type=chunk) [Management Discussion and Analysis](index=28&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's business performance, financial results, and future outlook, highlighting key operational and financial trends and strategic initiatives [Business Review and Future Prospect](index=28&type=section&id=Business%20Review%20and%20Future%20Prospect) In H1 2024, Hong Kong's commercial activity improved but retail market shrank due to changing consumption patterns, impacting the group's stable business growth, with future plans to expand healthcare and reallocate resources - After the lifting of anti-epidemic measures, commercial activities in Hong Kong improved, but the retail market contracted due to changing consumption patterns (Hong Kong residents preferring mainland consumption), affecting the Group's business development[82](index=82&type=chunk) - The Group's customer base primarily originates from mainland China, but economic challenges in China may limit customer purchasing power and willingness to spend[82](index=82&type=chunk) - The Group's business focuses on medical and aesthetic medical services for mainland visitors to Hong Kong, with plans to continuously evaluate business operations and development directions to provide more comprehensive solutions[82](index=82&type=chunk) - Future plans include striving to expand the scope of business in the healthcare industry and reallocating resources as appropriate to maintain a leading position[83](index=83&type=chunk) [Financial Review](index=29&type=section&id=Financial%20Review) For the six months ended June 30, 2024, revenue decreased by 19.44% to HKD 59.78 million, but gross profit increased by 29.53% to HKD 39.49 million, with profit for the period rising to HKD 16.83 million, improving liquidity and reducing the gearing ratio Key Financial Performance (For the six months ended June 30) | Indicator | 2024 (HKD million) | 2023 (HKD million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 59.78 | 74.22 | -19.44% | | Gross profit | 39.49 | 30.49 | +29.53% | | Profit for the period | 16.83 | 10.89 | +54.55% | | Total operating expenses | 22.11 | 19.08 | +15.88% | - The decrease in revenue was primarily due to the absence of the retaliatory consumption effect from mainland Chinese customers in 2024, which was present in 2023[83](index=83&type=chunk) - The **15.88% increase in operating expenses** was mainly due to the Group commencing operations in China in June 2023, leading to higher staff costs[83](index=83&type=chunk) Asset and Liability Status (As of June 30) | Indicator | June 30, 2024 (HKD million) | December 31, 2023 (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | | Net current assets | 34.66 | 20.79 | +66.71% | | Net assets | 25.14 | 11.79 | +113.23% | | Cash and bank balances | 1.85 | 3.33 | -44.59% | | Current assets | 132.87 | 168.58 | -21.29% | | Current liabilities | 98.21 | 147.79 | -33.54% | | Working capital ratio | 1.35 | 1.14 | +18.42% | | Shareholder loans | 41.21 | 35.21 | +17.04% | | Gearing ratio (Shareholder loans/Total equity) | 1.64 | 2.99 | -45.15% | - The Group primarily funds its operations through internal cash flow and shareholder loans[84](index=84&type=chunk) - The Group's foreign exchange risk is manageable, and it will continue to monitor and implement hedging measures as appropriate[85](index=85&type=chunk) [Details of Future Plans for Material Investment or Capital Assets](index=32&type=section&id=Details%20of%20Future%20Plans%20for%20Material%20Investment%20or%20Capital%20Assets) The company plans to inject RMB 10,250,000 into Changzhou Bomei Biotechnology Co., Ltd. through a wholly-owned subsidiary to acquire approximately 33.3% equity, with the transaction still under negotiation - Zhongzaisheng (Hong Kong) Health Technology Co., Limited plans to inject **RMB 10,250,000** (approximately **HKD 11,172,500**) into Changzhou Bomei Biotechnology Co., Ltd., with **RMB 250,000** for increasing registered capital and **RMB 10,000,000** for capital reserve[88](index=88&type=chunk) - Upon completion, Zhongzaisheng Health will hold approximately **33.3%** equity in the target company; this transaction is still under negotiation[88](index=88&type=chunk) - Other than the aforementioned disclosure, as of June 30, 2024, the Group had no other specific future plans for material investments or capital assets[88](index=88&type=chunk) [Dividend](index=32&type=section&id=Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[88](index=88&type=chunk) [Employee Information and Remuneration Policy](index=33&type=section&id=Employee%20Information%20and%20Remuneration%20Policy) As of June 30, 2024, the group had 39 employees, primarily in Hong Kong and mainland China, with total employee remuneration of HKD 8.35 million, and compensation based on individual performance and experience Employee Information (As of June 30) | Indicator | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Total number of employees | 39 | 29 | | Total employee remuneration (HKD million) | 8.35 | 6.06 | - The increase in employee numbers was primarily due to the Group commencing operations in China in June 2023[89](index=89&type=chunk)[90](index=90&type=chunk) - Remuneration and bonus policies are determined based on individual employee performance and experience[89](index=89&type=chunk)[90](index=90&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section provides additional disclosures including directors' and substantial shareholders' interests, share option schemes, corporate governance practices, and other statutory information [Directors and Chief Executives' Interests and Short Positions in Shares and Underlying Shares](index=34&type=section&id=Directors%20and%20Chief%20Executives%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, Executive Director Mr. Wang Chuang held a long position of 73,875,530 shares, representing 24.28% of the issued share capital, with no other directors holding disclosable interests Directors and Chief Executives' Long Positions in Shares and Underlying Shares | Name | Capacity | Total Long Position | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Wang Chuang | Beneficial owner | 73,875,530 | 24.28% | - Save for Mr. Wang Chuang, as of June 30, 2024, no other directors or chief executives had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company[94](index=94&type=chunk) [Substantial Shareholders and Other Persons' Interests in Shares and Underlying Shares](index=35&type=section&id=Substantial%20Shareholders%20and%20Other%20Persons%27%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, substantial shareholders included Quan Hui Holdings Limited and its associates (Mr. Dai Yu Min, Mr. Li Ren), China Orient Asset Management Co., Ltd. and its associates, and Changzhou Yaoguang Enterprise Management Consulting Partnership (Limited Partnership) and Changzhou Zhongmin Xingkong Enterprise Management Consulting Service Partnership (Limited Partnership) and their associates, all holding long positions in the company's shares Substantial Shareholders and Other Persons' Long Positions in Shares and Underlying Shares | Shareholder Name/Entity | Capacity | Total Long Position | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Quan Hui Holdings Limited | Beneficial owner | 58,254,776 | 19.15% | | Ma De Min (Trustee) | Other | 58,342,276 | 19.18% | | Wong Kwok Keung (Trustee) | Other | 58,342,276 | 19.18% | | Li Ren | Held by controlled corporation/Beneficial owner | 60,392,776 | 19.85% | | China Orient Asset Management Co., Ltd. | Held by controlled corporation | 15,774,465 | 5.18% | | Changzhou Yaoguang Enterprise Management Consulting Partnership (Limited Partnership) | Held by controlled corporation | 26,240,000 | 8.62% | | Lei Chang Juan | Held by controlled corporation | 26,240,000 | 8.62% | | Changzhou Zhongmin Xingkong Enterprise Management Consulting Service Partnership (Limited Partnership) | Held by controlled corporation | 16,060,000 | 5.28% | | Kong Yu Shu | Held by controlled corporation | 16,060,000 | 5.28% | - Due to a bankruptcy order, Mr. Dai Yu Min's property, including shares, has been vested in the trustees Mr. Ma De Min and Mr. Wong Kwok Keung[100](index=100&type=chunk) - Quan Hui Holdings Limited has pledged its interest in **15,774,465 shares** to Optimus[100](index=100&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=39&type=section&id=Directors%27%20Rights%20to%20Acquire%20Shares%20or%20Debentures) For the six months ended June 30, 2024, no directors, chief executives, or their spouses or children under 18 were granted or exercised any rights to acquire shares or debentures of the company - For the six months ended June 30, 2024, no directors or chief executives or their spouses or children under the age of 18 were granted or exercised any rights to acquire benefits through the purchase of shares or debentures of the company[104](index=104&type=chunk)[106](index=106&type=chunk) [Directors' Interest in Competing Business](index=40&type=section&id=Directors%27%20Interest%20in%20Competing%20Business) For the six months ended June 30, 2024, no directors, substantial shareholders, or their close associates had any interests in businesses competing or potentially competing with the group - For the six months ended June 30, 2024, no directors or substantial shareholders or their close associates had any interests in any business that competes or is likely to compete with the Group's business[108](index=108&type=chunk) [Share Options](index=40&type=section&id=Share%20Options) The company adopted a share option scheme on September 14, 2011, to incentivize participants, with no changes in the number of outstanding options during the six months ended June 30, 2024 - The Share Option Scheme aims to provide incentives or rewards to participants for their contributions to the Group and to attract and retain excellent employees[108](index=108&type=chunk) Share Option Movements (For the six months ended June 30) | Grant Date | Exercise Price (HKD) | Outstanding at Dec 31, 2023 | Granted in 2024 | Exercised in 2024 | Reclassified in 2024 | Lapsed in 2024 | Outstanding at June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | September 16, 2015 | 90.00 | 330,200 | – | – | – | – | 330,200 | | September 9, 2016 | 58.20 | 390,520 | – | – | – | – | 390,520 | - There were no changes in the number of share options during the six months ended June 30, 2024[109](index=109&type=chunk)[114](index=114&type=chunk) - The number of shares and exercise prices of the share options have been adjusted in accordance with the company's two share consolidations (effective May 16, 2019, and September 6, 2023)[121](index=121&type=chunk)[122](index=122&type=chunk) [Issue of Equity Securities](index=47&type=section&id=Issue%20of%20Equity%20Securities) For the six months ended June 30, 2024, the company did not issue any equity securities - For the six months ended June 30, 2024, the company did not issue any equity securities[123](index=123&type=chunk) [Corporate Governance Practice](index=47&type=section&id=Corporate%20Governance%20Practice) The company complied with the GEM Listing Rules' Corporate Governance Code, except for the combined roles of Chairman and CEO, which the Board believes enhances business strategy execution and operational efficiency - The company complied with the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Wang Chuang[123](index=123&type=chunk) - The Board believes this combined arrangement facilitates the execution of the Group's business strategies and enhances operational efficiency, and will review the existing structure from time to time[123](index=123&type=chunk) [Review of Interim Financial Statements by Audit Committee](index=48&type=section&id=Review%20of%20Interim%20Financial%20Statements%20by%20Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024 - The Audit Committee comprises three independent non-executive directors: Mr. Leung Man Fai (Chairman), Ms. Fok Chun Yuk, and Dr. Liu Ming[124](index=124&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024[124](index=124&type=chunk) [Securities Dealing Code](index=48&type=section&id=Securities%20Dealing%20Code) The company adopted the GEM Listing Rules' Securities Dealing Code for Directors, with all directors confirming full compliance during the reporting period - The company has adopted the Securities Dealing Code for Directors as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[124](index=124&type=chunk) - All directors have confirmed full compliance with the code for the six months ended June 30, 2024[124](index=124&type=chunk) [Purchase, Sale or Redemption of Securities](index=48&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) For the six months ended June 30, 2024, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[124](index=124&type=chunk) [Event After the Reporting Period](index=49&type=section&id=Event%20After%20the%20Reporting%20Period) No significant events occurred after the reporting period up to the date of this report - No significant events occurred after the reporting period up to the date of this report[126](index=126&type=chunk)[127](index=127&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告內容概不負 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 本 公 告 全 部 或 任 何 部 份 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任。 China Regenerative Medicine International Limited 中國再生醫學國際有限公司 （於開曼群島註冊成立之有限公司） （股份代號：8158） 有 關 截至二零二三年十二月三十一日止年度二零二三年年報 的補充公告 茲 提 述 中 國 再 生 醫 學 國 際 有 限 公 司（「本公司」，連 同 其 附 屬 公 司 統 稱「本集團」） 截 至 二 零 二 三 年 十 二 月 三 十 一 日 止 年 度 的 年 報（「年 報」）。除 非 另 有 說 明，否 則 本 公 告 所 用 詞 彙 與 年 報 所 界 定 者 具 有 相 同 涵 義。 本 公 司 董 事（「董 事」）會（「董事會」）謹 此 就 年 報 內 的 以 下 事 項 補 充 以 下 資 料：(a ...

Business Development and Strategy - The Group's development plan for 2023 was prepared in anticipation of the resumption of cross-border travel[16] - The Group aims to attract more quality partners in the industry to share development dividends[17] - The Group aims to optimize asset portfolios and strategically cooperate with companies in Mainland China to enhance operational efficiency and profitability[21] - The Group plans to continuously assess market conditions and adjust business operations to meet evolving consumer demands[24] - The increase in revenue was primarily due to the reopening of borders leading to more customers from Mainland China visiting for aesthetic medical and beauty services[31] - The Group expressed appreciation for the contributions of management and employees, as well as the support from clients, suppliers, partners, shareholders, and investors[18] Financial Performance - The Group recorded a revenue of approximately HK$69.49 million for the year ended 31 December 2023, representing an increase of 67.29% from last year (2022: HK$41.54 million) [30] - Gross profit decreased by 48.37% to approximately HK$19.42 million from last year (2022: HK$37.62 million) [30] - The Group recorded a loss for the year ended 31 December 2023 of approximately HK$107.70 million, compared to a profit of HK$4.56 million in 2022 [30] - Total operating expenses for the year ended 31 December 2023 amounted to approximately HK$46.51 million, representing an increase of 74.88% compared to last year (2022: HK$26.60 million) [32] - As at 31 December 2023, the Group recorded net current assets of HK$20.79 million, down from HK$90.93 million in 2022[36] - The Group's cash and bank balances as at 31 December 2023 were approximately HK$3.33 million, an increase from HK$1.85 million in 2022[37] - The gearing ratio of the Group as at 31 December 2023 was 2.99, compared to 0.47 in 2022[39] Employee and Workforce Development - The total employee remuneration for the year was approximately HK$15.99 million, an increase from HK$11.06 million in 2022, with the number of employees rising to 46 from 23[63] - The company had a total of 46 employees as of December 31, 2023, compared to 23 employees in 2022, indicating a growth of 100% in workforce size[65] - Male employees account for 30.43% and female employees account for 69.57% of the Group's workforce, indicating a gender ratio within a reasonable range[115] Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the Reporting Period, except for the deviation where the roles of chairman and chief executive are held by the same individual[93] - The Board consists of five Directors as of December 31, 2023, including one executive Director, one non-executive Director, and three independent non-executive Directors[105] - The Board focuses on overall strategies and policies, particularly on the growth and financial performance of the Group[108] - The Company has adopted a Code of Ethics for its principal executive officer and senior financial officers, promoting honest and ethical conduct[99] - The Board is collectively responsible for promoting the success of the Company and its businesses by directing and supervising its affairs[100] Audit and Compliance - The Audit Committee held four meetings during the Reporting Period to review and supervise the financial reporting process and internal control of the Group[178] - All members of the Audit Committee are independent non-executive Directors, ensuring compliance with GEM Listing Rules[169] - The Audit Committee's principal functions include reviewing quarterly, interim, and annual consolidated financial statements, focusing on compliance with accounting principles and GEM Listing Rules[176] - The Audit Committee has the authority to investigate any matters under its duties and obtain independent professional advice[172] Strategic Initiatives and Market Expansion - The company has set a revenue guidance for the next fiscal year, projecting an increase of 10% to HK$215 million, driven by new product launches and market expansion strategies[91] - The company plans to enter new markets in Southeast Asia, aiming for a market share of 5% within the next two years[91] - A strategic acquisition of a local competitor is under consideration, which could potentially increase market penetration by 25%[91] Sustainability and Innovation - The company is committed to sustainability initiatives, with plans to reduce operational carbon emissions by 15% by 2025[91] - Research and development efforts have focused on enhancing sleep breathing monitoring products, with an investment of HK$30 million allocated for innovation in this area[91] Board Diversity and Structure - The Group appointed five Directors during the Reporting Period, with one female Director, reflecting a diverse composition in terms of gender, age, and professional experience[115] - The Board has established measurable objectives to implement the Board Diversity Policy, focusing on various diversity perspectives including gender, age, and professional experience[114] - The Nomination Committee aims to identify and nominate qualified individuals for Board vacancies as they arise[189]

Financial Performance - The company's revenue for the year ended December 31, 2023, was HKD 69,487,000, an increase from HKD 41,537,000 in 2022, representing a growth of 67.2%[5] - The gross profit for the year was HKD 19,423,000, down from HKD 37,623,000 in the previous year, indicating a decline of 48.3%[5] - The company reported a loss attributable to equity holders of HKD 107,699,000 for the year, compared to a profit of HKD 4,555,000 in 2022, marking a significant downturn[5] - The group reported a pre-tax loss of HKD 107,699,000 for 2023, compared to a pre-tax profit of HKD 8,267,000 in 2022, indicating a substantial decline in profitability[32] - The aesthetic medical segment generated revenue of HKD 61,179,000 in 2023, up from HKD 41,537,000 in 2022, reflecting a growth of 47.2%[32] - The group incurred a total segment loss of HKD 90,366,000 in 2023, compared to a profit of HKD 20,934,000 in 2022, marking a significant downturn[32] Assets and Liabilities - Total assets decreased to HKD 168,579,000 in 2023 from HKD 249,093,000 in 2022, a reduction of 32.3%[6] - The company's net current assets fell to HKD 20,789,000 in 2023, down from HKD 90,927,000 in 2022, a decline of 77.1%[6] - The company’s total equity decreased significantly to HKD 11,793,000 in 2023 from HKD 103,916,000 in 2022, a drop of 88.6%[6] - As of December 31, 2023, the group reported current liabilities due within one year of approximately HKD 147.79 million, with cash and bank balances of approximately HKD 3.33 million[51] - Current assets were approximately HKD 168.58 million, down from HKD 249.09 million in 2022, while current liabilities were approximately HKD 147.79 million, down from HKD 158.17 million in 2022, resulting in a current ratio of 1.14[58] Cash Flow and Financing - Cash and bank balances increased to HKD 3,334,000 in 2023 from HKD 1,849,000 in 2022, reflecting a growth of 80.0%[6] - The company plans to seek additional funding through equity financing and long-term debt to support its working capital and repay existing debts[17] - Major shareholders have agreed to provide financial support to the company, which is crucial for its operational continuity[11][17] - The board of directors has assessed cash flow forecasts for the next twelve months and believes that the company will have sufficient working capital to meet its operational and financial obligations[10][13] Impairment and Credit Losses - The company has incurred a significant expected credit loss of HKD 83,001,000 in the current year, compared to HKD 7,276,000 in the previous year[5] - The group recognized impairment losses on receivables of approximately HKD 83.00 million for the year, compared to HKD 7.27 million in the previous year[48] Corporate Governance and Compliance - The company has complied with all provisions of the corporate governance code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[74] - The company will continue to review its governance structure and appoint suitable candidates for the roles of Chairman or CEO to ensure compliance with corporate governance standards[74] - The audit committee, composed of all independent non-executive directors, has reviewed the group's performance for the fiscal year ending December 31, 2023[75] Employee and Operational Metrics - As of December 31, 2023, the total employee compensation for the group was approximately HKD 15.99 million, an increase from HKD 11.06 million in 2022, reflecting a growth of 44.4%[72] - The group had a total of 46 employees as of December 31, 2023, compared to 23 employees in 2022, indicating a growth of 100% in workforce size[72] Strategic Focus and Future Plans - The company is focused on providing aesthetic medical beauty products and services, as well as medical products and services, indicating a strategic focus on these sectors[7] - The group aims to continue expanding its business scope in the healthcare industry and will reallocate resources to strengthen its leading position in health products and services[52] - The group plans to enhance and maintain its leading position in health products and services through timely resource reallocation[52] Shareholder Actions and Capital Management - The company does not recommend the distribution of any dividends for the fiscal year ending December 31, 2023[77] - The company plans to implement a share consolidation, merging every ten existing shares into one consolidated share, followed by a capital reduction[71] - Following the capital reduction, the par value of each consolidated share will be reduced from HKD 2.00 to HKD 0.20[71] - The group proposed a capital reorganization on July 14, 2023, involving the issuance of 18,823,530 shares at a subscription price of HKD 0.85 per share[69] Accounting Standards and Reporting - The adoption of new and revised Hong Kong Financial Reporting Standards has been implemented, which may affect the disclosure of accounting policies but not the financial position significantly[15][18] - The group plans to adopt the revised Hong Kong Financial Reporting Standards effective from January 1, 2024, which will not significantly impact the group's performance and financial position[20] - The group is committed to ensuring compliance with the revised accounting standards and has implemented necessary changes to its financial reporting practices[27]

Financial Performance - For the three months ended September 30, 2023, the revenue was HK$11,965,000, a decrease of 84.4% compared to HK$76,887,000 for the same period in 2022[9]. - The gross profit for the nine months ended September 30, 2023, was HK$37,991,000, representing an increase of 29.4% from HK$29,364,000 in the previous year[9]. - The net loss attributable to owners of the Company for the three months ended September 30, 2023, was HK$6,085,000, compared to a profit of HK$8,334,000 in the same period of 2022[9]. - The total comprehensive loss for the three months ended September 30, 2023, was HK$3,147,000, compared to a comprehensive income of HK$1,303,000 for the same period in 2022[11]. - The basic and diluted earnings per share for the nine months ended September 30, 2023, was 2.34 HK cents, down from 3.70 HK cents in the previous year[11]. - The company's profit for the nine months ended 30 September 2023 was HK$6,677,000, compared to HK$10,555,000 for the same period in 2022, representing a decrease of approximately 36.5%[13]. - Total comprehensive income for the period ended 30 September 2023 was HK$4,578,000, down from HK$10,555,000 in the previous year, indicating a decline of around 56.5%[13]. - Revenue for the nine months ended September 30, 2023, was HK$112,056,000, a decrease of 31.2% from HK$163,143,000 in the same period of 2022[28]. - Sales of goods increased to HK$13,484,000 in 2023 from HK$9,915,000 in 2022, representing a growth of 36.1%[28]. - Service income decreased significantly to HK$98,572,000 in 2023 from HK$153,228,000 in 2022, a decline of 35.7%[28]. Expenses and Costs - Selling and distribution expenses increased to HK$5,190,000 for the nine months ended September 30, 2023, compared to HK$2,573,000 in the previous year, reflecting a rise of 102.5%[9]. - Administrative and other expenses for the nine months ended September 30, 2023, were HK$27,785,000, an increase of 68.5% from HK$16,470,000 in the same period of 2022[9]. - Total operating expenses for the nine months ended 30 September 2023 amounted to approximately HK$33.73 million, an increase of 72.95% from HK$19.50 million in the same period last year[55][58]. - Interest on lease liabilities rose to HK$758,000 in 2023 compared to HK$461,000 in 2022, an increase of 64.5%[32]. - Depreciation for property, plant, and equipment increased to HK$421,000 in 2023 from HK$96,000 in 2022, a rise of 338.5%[35]. - Employee benefit expenses, including salaries and wages, were HK$9,321,000 in 2023, slightly up from HK$9,127,000 in 2022, an increase of 2.1%[35]. Shareholder Information - As of September 30, 2023, the Directors are not aware of any other parties with interests in the Company's shares that require disclosure[88]. - No rights to acquire shares or debentures were granted or exercised by Directors or their immediate family during the nine months ended September 30, 2023[89]. - None of the Directors or substantial shareholders had interests in businesses that compete with the Group during the nine months ended September 30, 2023[90]. - All Favour Holdings Limited holds 58,254,776 shares, representing approximately 20.41% of the issued share capital[77]. - Arab Osman Mohammed and Wong Kwok Keung each hold 58,342,276 shares, representing approximately 20.44% of the issued share capital[77]. - Li Ren holds 58,254,776 shares through a controlled corporation, representing approximately 20.41% of the issued share capital[78]. - China Orient Asset Management Co., Ltd holds 15,774,465 shares, representing approximately 5.53% of the issued share capital[78]. - Changzhou Yaoguang Enterprise Management Consulting Limited holds 26,240,000 shares, representing approximately 9.19% of the issued share capital[78]. - Wang Xiaogang is a beneficial owner of 14,945,000 shares, representing approximately 5.24% of the issued share capital[78]. Corporate Governance - The company has complied with all code provisions of the Corporate Governance Code during the nine months ended September 30, 2023, except for code provision C.2.1[113]. - The roles of chairman and chief executive officer are held by the same individual, Mr. Wang Chuang, which deviates from code provision C.2.1 of the Corporate Governance Code[114]. - The Audit Committee reviewed the unaudited condensed consolidated financial statements for the nine months ended September 30, 2023[118]. - The company and its subsidiaries did not purchase, redeem, or sell any of the company's listed securities during the nine months ended September 30, 2023[120]. Capital Reorganization - On July 14, 2023, the company proposed a capital reorganisation, which includes the allotment and issuance of 18,823,530 subscription shares at a price of HK$0.85 per share[125]. - The subscription amount of approximately HK$16.0 million will be satisfied by capitalising a portion of shareholder's loans due to the subscriber[125]. - The company underwent two share consolidations, with the latest on September 6, 2023, consolidating every 10 shares of HK$0.20 into 1 share of HK$2.00[110]. - The adjusted exercise price and number of shares under the share option scheme were modified due to the share consolidations[109]. - Proposed share consolidation will convert every ten existing shares into one consolidated share[126]. - Proposed capital reduction will reduce the par value of each issued consolidated share from HK$2.00 to HK$0.20[126]. - Share consolidation took effect on September 6, 2023, while capital reduction is expected to take effect on or about December 7, 2023[127]. Strategic Initiatives - The Group aims to enhance its medical aesthetic and healthcare services to meet the increasing demand from mainland clients following the reopening of the border[48]. - The decrease in revenue was primarily due to a slowdown in the number of customers from the PRC visiting the center for health and beauty services in Q3 2023[54][57]. - The Group established a marketing team in July 2023 to enhance operational capabilities for market expansion and customer diversification[49][51]. - The Group has actively attracted quality business partners in the industry to share development dividends and replicate medical industry growth[50][51]. - The company continues to monitor market conditions for potential strategic acquisitions[107]. Share Option Scheme - A share option scheme was adopted on September 14, 2011, allowing the Company to grant options to eligible employees and other participants[95]. - The movement of share options under the scheme during the nine months ended September 30, 2023, is documented but specific numbers are not provided in the extracted content[96]. - The share option scheme aims to provide incentives for contributions to the Group and to attract high-caliber employees[95]. - The period of the share option scheme shall not exceed ten years from the date of adoption[95]. - The adjusted number of share options as of September 30, 2023, reflects a total of 330,200 options outstanding[98]. - No share options were exercised during the nine months ended September 30, 2023[101]. - The exercise price for the options granted to eligible persons is set at HK$0.45[100]. - The vesting schedule indicates that options granted to new employees who have joined the company for less than 12 months are not yet exercisable[99]. - The company has not cancelled or lapsed any share options during the reporting period[100]. - The movement of share options shows no reclassification of options during the nine months ended September 30, 2023[101]. - The outstanding options as of December 31, 2022, were adjusted following a share consolidation[98]. - The company continues to monitor the exercise period for all granted options[100]. - There are no new grants of share options reported for the period[99]. - The company maintains a focus on managing its share option plan effectively to align with its strategic goals[101].

Financial Performance - The company reported a significant increase in revenue, achieving a total of $XX million, representing a YY% growth compared to the previous period[11]. - Revenue for the three months ended June 30, 2023, increased to HK$46,039,000, representing a 34.2% growth compared to HK$34,340,000 in the same period of 2022[18]. - Gross profit for the six months ended June 30, 2023, rose to HK$30,487,000, up 134.5% from HK$13,005,000 in the corresponding period of 2022[18]. - Profit attributable to owners of the Company for the three months ended June 30, 2023, was HK$11,188,000, compared to HK$1,099,000 in the same period of 2022, marking a significant increase[18]. - For the six months ended June 30, 2023, the company reported a profit of HK$12,762,000, compared to HK$2,222,000 for the same period in 2022, representing a significant increase[27]. - Basic and diluted earnings per share for the six months ended June 30, 2023, were HK$0.447, up from HK$0.078 in the same period of 2022[20]. - The profit for the six months ended 30 June 2023 was approximately HK$12.76 million, compared to HK$2.22 million for the same period in 2022[91]. - The Group's profit before income tax for the six months ended June 30, 2023, included depreciation expenses of HK$5,432,000 for right-of-use assets, compared to HK$764,000 in 2022[56]. Cash Flow and Assets - The management emphasized the importance of maintaining a strong cash flow, reporting a cash position of $EE million, which supports future growth initiatives[11]. - Net cash generated from operating activities was HK$79,000, a recovery from a cash outflow of HK$10,114,000 in the previous year[30]. - The company experienced a net decrease in cash and cash equivalents of HK$1,973,000, compared to a decrease of HK$8,504,000 in the same period last year[30]. - Current assets increased to HK$260,069,000 as of June 30, 2023, compared to HK$249,093,000 as of December 31, 2022[22]. - Net current assets improved to HK$97,446,000 as of June 30, 2023, from HK$90,927,000 as of December 31, 2022[24]. - Total equity increased to HK$111,641,000 as of June 30, 2023, compared to HK$103,916,000 as of December 31, 2022[24]. - The Group's total assets amounted to approximately HK$111.64 million as of June 30, 2023, compared to HK$103.92 million as of December 31, 2022[95]. Strategic Outlook - The company provided a positive outlook for the next quarter, projecting revenue growth of BB% and an expected increase in user engagement metrics[11]. - New product launches are anticipated, including a breakthrough in regenerative medicine technology, which is expected to enhance market competitiveness[11]. - The company is exploring market expansion opportunities in Southeast Asia, aiming to increase its market share by CC% over the next year[11]. - Ongoing research and development efforts are focused on innovative therapies, with an investment of $DD million allocated for the upcoming fiscal year[11]. - The company is considering strategic acquisitions to bolster its product portfolio and enhance operational capabilities[11]. - The Group plans to optimize asset portfolios and focus on business segments that synergize with future development strategies to enhance operational efficiency and profitability[89]. Shareholder Information - The board of directors confirmed their commitment to shareholder value, with plans to implement a dividend policy in the upcoming fiscal year[11]. - No interim dividend was recommended for the six months ended June 30, 2023, consistent with the previous year[61]. - The Group did not recommend the payment of an interim dividend for the six months ended June 30, 2023, compared to no dividend in the same period of 2022[62]. - As of June 30, 2023, Wang Chuang holds a beneficial ownership of 550,520,000 shares, representing approximately 19.29% of the issued share capital[127]. - All Favour Holdings Limited is a beneficial owner of 582,547,765 shares, accounting for about 20.41% of the issued share capital[130]. - Arab Osman Mohammed and Wong Kwok Keung each hold 583,422,765 shares, which is approximately 20.44% of the issued share capital[130]. Corporate Governance - The company has complied with all code provisions of the Corporate Governance Code during the six months ended June 30, 2023, except for code provision C.2.1[170]. - The roles of chairman and chief executive officer are held by the same individual, which deviates from code provision C.2.1 of the Corporate Governance Code[171]. - The Audit Committee, comprising independent non-executive Directors, reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023[175]. - All Directors confirmed full compliance with the Required Standard of Dealings throughout the six months ended June 30, 2023[176]. Employee Compensation - Key management personnel compensation for the six months ended June 30, 2023, was HK$1,015,000, up from HK$429,000 in 2022, an increase of 136.6%[80]. - The total employee remuneration for the six months ended June 30, 2023, was approximately HK$6.06 million, compared to approximately HK$5.81 million for the same period in 2022[119]. Share Options - A share option scheme was adopted on September 14, 2011, allowing directors to grant options to eligible employees and other participants[150]. - The movement of share options under the scheme during the six months ended June 30, 2023, is documented but specific figures are not provided[154]. - The company continues to focus on maintaining its share option program as part of its employee incentive strategy[158]. - The share options are structured to incentivize performance and align employee interests with shareholder value[158].