[Supplementary Announcement Overview](index=1&type=section&id=Supplementary%20Announcement%20Overview) This announcement supplements China Regenerative Medical International Limited's 2023 annual report, addressing significant impairment loss, auditor's qualified opinion, and restatement of prior year financial statements - This announcement supplements China Regenerative Medical International Limited's 2023 annual report, primarily addressing **significant impairment loss on third-party receivables**, the **auditor's qualified opinion on 2022 impairment loss**, and the **restatement of prior year agency business financial statements**[1](index=1&type=chunk) Impairment Loss on Other Receivables | Year | Impairment Loss Amount (HKD) | | :--- | :--------------------------- | | 2023 | 83,001,000 | | 2022 | 7,273,000 | [Significant Impairment Loss on Other Receivables](index=1&type=section&id=Significant%20Impairment%20Loss%20on%20Other%20Receivables) This section details the significant impairment loss on other receivables, including valuation methodology, inputs, assumptions, and commercial reasons for changes [Impairment Loss Amount and Valuation Methodology](index=1&type=section&id=Impairment%20Loss%20Amount%20and%20Valuation%20Methodology) The company engaged an independent valuer to assess expected credit loss provisions for other receivables in the aesthetic medical and beauty segment for 2023 and 2022 Provision for Expected Credit Loss on Other Receivables | Year | Provision Amount (HKD) | | :--- | :--------------------- | | 2023 | 83,001,000 | | 2022 | 7,273,000 | - The valuer used a settlement analysis approach, based on historical quarterly aging and default records, to assess full-lifetime expected credit loss, particularly useful when debtor financial information is unavailable for in-depth credit assessment[3](index=3&type=chunk) [Valuation Inputs and Assumptions](index=2&type=section&id=Valuation%20Inputs%20and%20Assumptions) Impairment is determined by expected credit loss under HKFRS 9, with key inputs being probability of default and loss given default, influenced by macroeconomic indicators Expected Credit Loss Input Data for Other Receivables as of December 31, 2023 | Metric | Value | | :---------------------------------------- | :-------------------------------------------- | | Full-lifetime Probability of Default (Current Quarter) | 14.11% | | Loss Given Default Rate | 63.65% | | Expected Credit Loss Rate (Days Past Invoice) | 8.98% (Current Quarter) to 47.90% (Over 365 Days from Invoice Date) | - In determining the probability of default, the valuer considered changes in business cooperation with counterparties in 2023 and management's discussions on an expected 5-year repayment plan, elevating the risk category from general industry risk to a **specific B3 rating**[5](index=5&type=chunk) - Forward-looking adjustments used a regression model, incorporating historical and 2023 forecasted macroeconomic indicators (GDP and CPI) and historical market default data[5](index=5&type=chunk) [Significant Changes in Inputs and Commercial Reasons](index=3&type=section&id=Significant%20Changes%20in%20Inputs%20and%20Commercial%20Reasons) Significant changes in valuation inputs for FY2023, including credit risk category and repayment period, reflect increased credit risk due to business suspension with third parties - In FY2023, the credit risk category was elevated from general industry risk in FY2022 to a **specific B3 risk category**[6](index=6&type=chunk) - The repayment period extended from **1 to 2 years in FY2022 to 2.5 years in FY2023**, based on a 5-year repayment plan[6](index=6&type=chunk) Comparison of Probability of Default and Expected Credit Loss Rate (2022 vs 2023) | Metric | December 31, 2022 | December 31, 2023 | | :---------------------------------------- | :---------------- | :---------------- | | Full-lifetime Probability of Default (Current Quarter) | 1.74% to 3.34% | 14.11% | | Expected Credit Loss Rate (Days Past Invoice) | 1.08% to 10.99% | 8.98% to 47.90% | - In FY2023, due to the suspension of business operations with third parties since May, the vast majority of other receivables could no longer be settled by offsetting future operating costs, leading to the assumption of **high collection risk for all other receivables**[8](index=8&type=chunk) [Auditor's Qualified Opinion](index=5&type=section&id=Auditor's%20Qualified%20Opinion) This section addresses the auditor's qualified opinion regarding the impairment loss on receivables for 2022, including its basis, management's view, and plans to address it [Basis of Qualified Opinion](index=5&type=section&id=Basis%20of%20Qualified%20Opinion) The auditor issued a qualified opinion due to insufficient audit evidence to assess the reasonableness of assumptions for the HKD 7.273 million impairment loss on 2022 receivables - The auditor could not obtain sufficient appropriate audit evidence to assess the reasonableness and appropriateness of the basis and assumptions used by the company for the **impairment loss of approximately HKD 7,273,000** recognized on receivables as of December 31, 2022[9](index=9&type=chunk) - The auditor believes this matter may affect the comparability of the current year's figures with the corresponding figures for the previous year ended December 31, 2022, thus issuing a **qualified opinion**[9](index=9&type=chunk) [Management and Audit Committee's View](index=5&type=section&id=Management%20and%20Audit%20Committee's%20View) Management and the Audit Committee agree that expected credit loss provisions are based on professional expertise and valuation reports, not differing from the auditor's opinion for FY2022 - Management and the Audit Committee agree that the expected credit loss provision is based on **professional expertise and the valuer's assessment report**[10](index=10&type=chunk) - Management and the Audit Committee do not believe that the auditor's qualified opinion arising in FY2023 will lead to a **different view on the expected credit loss provision for FY2022**[10](index=10&type=chunk) [Plan to Address Qualified Opinion](index=6&type=section&id=Plan%20to%20Address%20Qualified%20Opinion) The qualified opinion on 2022 impairment loss will only have a carry-forward impact on 2023 retained earnings and opening balance of other receivables, with no impact on 2024 - The auditor's qualified opinion will only have a carry-forward impact on **retained earnings and the opening balance of other receivables for FY2023**[11](index=11&type=chunk) - This qualified opinion will **not have a carry-forward impact on FY2024**[11](index=11&type=chunk) [Restatement of Prior Year Financial Statements](index=6&type=section&id=Restatement%20of%20Prior%20Year%20Financial%20Statements) This section explains the restatement of prior year financial statements due to reclassification of revenue recognition for agency business from gross to net basis [Background and Reasons for Restatement](index=6&type=section&id=Background%20and%20Reasons%20for%20Restatement) The group's subsidiary engaged Chinese entities for aesthetic medical and beauty services, with revenue from designated services now recognized on a net basis as an agent - The Group's subsidiary engaged Chinese entities to provide aesthetic medical and beauty services since 2021, with approximately **HKD 204,743,000 (2022) and HKD 220,774,000 (2021)** derived from designated services (agency business)[12](index=12&type=chunk) - Following management review, it was determined that under HKFRS 15, the Group acts as an agent in providing these services, and revenue should be recognized on a **net basis**[12](index=12&type=chunk) [Impact of Restatement on Financial Statements](index=6&type=section&id=Impact%20of%20Restatement%20on%20Financial%20Statements) Restatement reduced revenue and cost of sales for FY2022 and FY2021, but gross profit, basic and diluted EPS, and accumulated losses remained unchanged Impact of Restatement on Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Year Ended December 31, 2022 (HKD '000) | Metric | Previously Reported | Misstatement Correction | Restated | | :----------- | :------------------ | :---------------------- | :------- | | Revenue | 231,612 | (190,075) | 41,537 | | Cost of Sales| (193,989) | 190,075 | (3,914) | | Gross Profit | 37,623 | – | 37,623 | Impact of Restatement on Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Year Ended December 31, 2021 (HKD '000) | Metric | Previously Reported | Misstatement Correction | Restated | | :----------- | :------------------ | :---------------------- | :------- | | Revenue | 282,897 | (178,962) | 103,935 | | Cost of Sales| (215,170) | 178,962 | (36,208) | | Gross Profit | 67,727 | – | 67,727 | - The aforementioned financial statement misstatement corrections had **no impact on basic and diluted earnings per share or accumulated losses** for the years ended December 31, 2021 and 2022[13](index=13&type=chunk) [Agency Business Performance After Restatement and Outlook](index=7&type=section&id=Agency%20Business%20Performance%20After%20Restatement%20and%20Outlook) Post-restatement, agency business incurred a net loss in FY2023, a shift from profit in FY2022, attributed to seasonal effects and a shift of Chinese customers to Hong Kong clinics Agency Business Net Profit/Loss (Restated) | Year | Net Profit/Loss (HKD) | | :--- | :-------------------- | | 2023 | (881,000) (Loss) | | 2022 | 14,668,000 (Profit) | - The Chinese New Year in Q1 2023 caused seasonal effects, leading to **fewer client visits to clinics and poorer financial performance**[13](index=13&type=chunk) - Since May 2023, Chinese clinic centers have generated **no revenue**, as more Chinese customers chose to visit Hong Kong clinic centers after cross-border restrictions were lifted[13](index=13&type=chunk) - The company expects the agency business to **further shrink in 2024**, while the Hong Kong business is anticipated to flourish[13](index=13&type=chunk) [Other Information](index=7&type=section&id=Other%20Information) This section provides general information regarding the announcement's compliance with GEM Listing Rules and its public availability - The information in this announcement is published in compliance with the GEM Listing Rules, and the directors collectively and individually **assume full responsibility for its content**[14](index=14&type=chunk) - The announcement will be posted on the Stock Exchange's website and the company's website for at least **seven days from the date of publication**[14](index=14&type=chunk)

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].

Financial Performance - The Group's revenue for Q1 2023 was approximately HK$54.1 million, an increase of 4% from HK$51.9 million in Q1 2022[9] - Cost of sales decreased by 5% to approximately HK$43.5 million from HK$45.9 million in the same period last year[10] - Gross profit increased by approximately 7% to HK$10.0 million, with gross profit margin rising from 12% to 19%[11] - Other income significantly decreased by 99% to approximately HK$2,000, down from HK$500,000 in Q1 2022[12] - Selling and distribution expenses rose by 181% to approximately HK$1.67 million compared to HK$0.60 million in the previous year[13] - Administrative and other expenses increased by approximately 74% to HK$7.0 million from HK$4.0 million in Q1 2022[20] - Profit before income tax from continuing operations was HK$1.57 million, a decrease from HK$1.88 million in the prior year[22] - Profit for the period from continuing operations was HK$1.57 million, compared to HK$1.12 million in Q1 2022[22] - For the three months ended March 31, 2023, the total comprehensive income was HK$2,843,000, an increase of 49.4% compared to HK$1,903,000 for the same period in 2022[23] - The exchange gain on translation of financial statements of foreign operations was HK$1,269,000, up from HK$781,000 in the previous year, representing a growth of 62.5%[23] - Earnings per share from continuing operations attributable to owners of the Company was HK$0.001, a decrease from HK$0.039 in the same period last year[23] - The accumulated losses as of March 31, 2023, were HK$3,285,425,000, compared to HK$3,290,432,000 as of March 31, 2022, indicating a reduction in accumulated losses[24] - The total equity attributable to owners of the Company at March 31, 2023, was HK$106,759,000, compared to HK$114,315,000 at March 31, 2022, reflecting a decrease of 6.6%[24] - The Company reported a profit for the period of HK$1,574,000 for the three months ended March 31, 2023, compared to HK$1,122,000 for the same period in 2022, marking an increase of 40.4%[24] Business Strategy and Operations - The increase in revenue was primarily attributed to the expansion of the sales network in the PRC[9] - The Group's strategy focuses on providing higher-margin services to clients, reflected in the changes in cost structures[10] - The Company is focused on providing healthcare products and services, with ongoing efforts in market expansion and product development[29] - For the three months ended March 31, 2023, the Group's revenue from healthcare products and services was HK$54,052,000, an increase of 4.4% compared to HK$51,916,000 in the same period of 2022[45] - The reportable segment profit for the same period was HK$1,574,000, representing a 40.4% increase from HK$1,122,000 in 2022[45] - Total reportable segments' gain increased significantly to HK$5,843,000 from HK$1,928,000 year-over-year[48] - Unallocated corporate expenses for the period were HK$3,982,000, with no comparable figure reported for the previous year[48] Expenses and Costs - Finance costs rose to HK$287,000 in Q1 2023 from HK$49,000 in Q1 2022, indicating a substantial increase[55] - Advertising and marketing expenses increased significantly to HK$504,000 in Q1 2023 from HK$164,000 in Q1 2022, reflecting a growth of 207.3%[64] - The Group's profit before income tax for the period was HK$1,574,000, a decrease from HK$1,879,000 in Q1 2022[48] - The Group did not incur any income tax expenses for the period, compared to HK$757,000 in Q1 2022[59] Shareholder Information - Wang Chuang held a beneficial interest of 550,520,000 shares, representing approximately 19.29% of the issued share capital[87] - All Favour Holdings Limited held 582,547,765 shares, accounting for approximately 20.41% of the issued share capital[92] - Arab Osman Mohammed and Wong Kwok Keung each held 583,422,765 shares, representing approximately 20.44% of the issued share capital[92] - China Orient Asset Management Co., Ltd. held 157,744,659 shares, which is about 5.57% of the issued share capital[93] - Mr. Dai was granted 17,500,000 share options, which were adjusted to 875,000 Shares at an exercise price of HK$9.00 per Share after a share consolidation[96] - Mr. Dai holds an aggregate of 583,422,765 Shares, representing approximately 20.44% of the issued share capital of the Company[96] - Mr. Li personally owns 21,380,000 Shares, leading to a total deemed interest of 603,927,765 Shares, approximately 21.16% of the issued share capital[97] Corporate Governance - The company has complied with all code provisions of the Corporate Governance Code, except for code provision C.2.1, which requires the roles of chairman and chief executive to be separate[126] - Mr. Wang Chuang serves as both chairman and chief executive officer, which deviates from code provision C.2.1, but the board believes this structure enhances business strategy execution and operational efficiency[127] - The audit committee, composed entirely of independent non-executive directors, has reviewed the unaudited condensed consolidated financial statements for the period[131] - The unaudited financial statements have been prepared in accordance with applicable accounting standards and GEM Listing Rules[132] - The board will continue to review its structure and appoint suitable candidates to ensure compliance with the Corporate Governance Code[127] Share Options - The Share Option Scheme was adopted on 14 September 2011 and was valid for ten years until 13 September 2021[106] - No share options have lapsed, been granted, exercised, or cancelled under the Share Option Scheme during the reporting period[106] - The movement of share options during the year ended March 31, 2023, included 3,302,000 options outstanding as of March 31, 2023, with an exercise price of HK$0.45[112] - The outstanding share options as of December 31, 2022, were also 3,302,000, indicating no change in the total number of options[113] - The company has not reported any exercised options during the year, indicating a potential area for future employee engagement strategies[121] - The share options are structured to incentivize long-term commitment from employees, with multiple exercise periods extending to 2025[119] Market Conditions - The number of business travelers and tourists visiting Hong Kong has been increasing since January 2023, indicating a recovery in the Hong Kong economy[68] - There were no indications of market expansion or mergers and acquisitions in the recent financial disclosures[115] Miscellaneous - The Company does not recommend the payment of dividends for the period, consistent with the previous year[60] - There were no material acquisitions or disposals of subsidiaries during the period[73] - The company has not reported any new product launches or technological advancements during this reporting period[115] - The report will remain available on the Stock Exchange's website for at least seven days from the publication date[141]

Business Operations and Performance - In 2022, the Group's surgery and Day Procedure Centre officially opened in November, enhancing the range of medical and healthcare services offered to customers[17] - The Group faced continuous challenges from the COVID-19 pandemic in the first half of 2022, yet its development plan remained on track[17] - The annual results for the year ended December 31, 2022, were presented to shareholders, indicating ongoing operational activities despite external challenges[16] - The Group's commitment to comprehensive medical services reflects its strategic focus on customer care and service expansion[17] - The Group's operational resilience during the pandemic highlights its strategic planning and adaptability in a volatile market[17] - The Group's healthcare products and services segment saw substantial improvement starting from Q3 2022 due to the easing of the COVID-19 pandemic, despite challenges in the first half of the year[27] - The Group has focused on expanding its business dimensions by establishing a day surgery and medical centre during the pandemic[27] - The healthcare products and services segment is expected to expand, with plans to open more centers and cooperate with hospitals and sanatoriums despite market uncertainties[42] - The Group aims to enhance its market share and client base in the healthcare sector, leveraging social media for promotion and sourcing advanced treatment devices[39][41] - The Group's performance was impacted by COVID-19 measures, but there has been a recovery in customer visits to health and beauty services in Hong Kong and China post-lockdown[40][41] Financial Performance - The Group recorded a revenue of approximately HK$231.6 million for the year ended December 31, 2022, representing an 18% decrease from HK$282.9 million in 2021[47] - Gross profit decreased by 44% to approximately HK$37.62 million, with a gross profit margin dropping from 24% in 2021 to 16% in 2022[47] - The profit attributable to owners of the Company for the year was approximately HK$4.555 million, down from HK$13.3 million in the previous year, resulting in earnings per share of HK$0.002 compared to HK$0.02 in 2021[48] - Total operating expenses for the year amounted to approximately HK$25.817 million, a 54% decrease from HK$47.4 million in 2021[49] - As of December 31, 2022, the Group had net current assets of HK$90.927 million, down from HK$111.1 million in 2021, while net assets increased to HK$158.1 million from HK$147.0 million[54] - The Group's cash and bank balances as of December 31, 2022, were approximately HK$1.85 million, a decrease from HK$9.90 million in 2021[55] - The working capital ratio as of December 31, 2022, was 1.58, down from 1.75 in 2021, with a gearing ratio of 0.46 compared to 0.36 in the previous year[56] - Current assets were approximately HK$249,093,000 as of December 31, 2022, compared to HK$258,400,000 in 2021, while current liabilities were approximately HK$158,166,000, up from HK$147,300,000 in 2021, resulting in a current ratio of 1.58, down from 1.75 in 2021[61] - The Group's debt-to-equity ratio as of December 31, 2022, was 0.46, an increase from 0.36 in 2021[61] Corporate Governance - The Directors confirm that the information in the report is accurate and complete, ensuring transparency for investors[6] - The Company has undergone changes in its corporate governance, including the appointment of a new company secretary in September 2022[9] - The company has been expanding its board with independent non-executive directors to enhance governance and oversight[92] - 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[99] - The board believes that having the same person serve as both chairman and chief executive officer can enhance the execution of the group's business strategies and operational efficiency[99] - The board is collectively responsible for promoting the success of the company and its businesses by directing and supervising the company's affairs[106] - The company has established a framework for ethical standards to promote high levels of professional conduct among all employees and directors[105] - The board is committed to maintaining high standards of corporate governance practices to enhance accountability and transparency to shareholders[98] - The company will continue to review its governance structure to ensure compliance with the Corporate Governance Code and align with the latest developments[99] - The Company Secretary is tasked with updating the Board on governance and regulatory matters[127] Management and Strategy - The Company aims to provide more value-added services to meet diverse customer needs[17] - The Group has implemented measures to optimize asset portfolios and improve operational efficiency, aiming to significantly enhance profitability[26] - Strategic cooperation with companies in Mainland China has been initiated to complement resources and improve service levels, targeting sustainable growth[26] - The Company plans to build a regenerative medical health management ecosystem to improve service capabilities and quality in the upcoming year[19] - The Board will continuously evaluate the business environment and existing income streams to enhance profitability post-pandemic[28] - The Company aims to attract more quality partners in the industry to share development dividends and replicate successful business models[20] - The management structure has been optimized by introducing influential talents to enhance the Company's competitiveness[26] Board Composition and Diversity - As of December 31, 2022, the Board consisted of five Directors: one executive, one non-executive, and three independent non-executive Directors[111] - The Group's employee gender ratio is 9.0% male and 91.0% female, which the Group considers to be within a reasonable range[119] - The Board has established measurable objectives to implement its Board Diversity Policy, focusing on various diversity perspectives including gender, age, and professional experience[118] - The Board regularly reviews the contribution of each Director to ensure they are dedicating sufficient time to their responsibilities[123] - All Directors participated in continuous professional development during the Reporting Period, ensuring their contributions remain informed and relevant[132] Audit and Compliance - The Audit Committee consists of independent non-executive Directors, ensuring compliance with GEM Listing Rules and enhancing corporate governance[175] - The Audit Committee's responsibilities include reviewing significant adjustments resulting from audits and ensuring compliance with accounting principles and GEM Listing Rules[182] - The Audit Committee met once with the external auditor during the Reporting Period without management present, ensuring independent oversight[179] - The Audit Committee held 4 meetings during the reporting period to review and supervise the financial reporting process and internal control of the Group[184] - The attendance of the Audit Committee members at the meetings was 100%, with all three members attending all 4 meetings[186] - The Company has established a proper corporate governance structure with three subcommittees: Audit, Nomination, and Remuneration Committees[171] - The Nomination Committee is responsible for assessing the effectiveness of the Board and making recommendations for changes to complement the Company's corporate strategy[194] - The majority of the members of the Remuneration Committee are independent non-executive Directors[198] - The Company has received annual confirmations of independence from all independent non-executive Directors, affirming their impartiality[165] - The Company is committed to reviewing and monitoring compliance with legal and regulatory requirements as part of its governance practices[174]

Financial Performance - The Group's revenue from continuing operations for the nine months ended September 30, 2022, was approximately HK$163.1 million, a decrease of approximately HK$36.8 million or 18.40% compared to HK$199.9 million for the same period last year[6]. - Cost of sales for the Group from continuing operations was approximately HK$133.8 million, representing a decrease of approximately 19.88% from HK$167.0 million for the same period last year[6]. - The Group recorded a gross profit of approximately HK$29.4 million, a decrease of approximately 10.64% compared to HK$32.9 million in the prior period, with a gross profit margin increasing from approximately 16.46% to 17.99%[6]. - For the nine months ended September 30, 2022, the revenue was HK$163,143,000, a decrease of 18.5% from HK$199,976,000 in the same period of 2021[10]. - The profit for the nine months from continuing operations was HK$10,555,000, compared to HK$31,483,000 in the previous year, reflecting a decline of 66.5%[12]. - Profit before income tax for the nine months ended 30 September 2022 was HK$6,973,000, a decrease from HK$11,169,000 in 2021, representing a decline of approximately 37.8%[49]. - Total income tax expenses for the nine months ended September 30, 2022 were HK$3,690,000, compared to HK$4,329,000 in 2021, reflecting a decrease of approximately 14.8%[52]. - Basic profit per share from continuing operations for the nine months ended 30 September 2022 was HK$0.370, down from HK$1.103 in 2021, a decline of approximately 66.5%[59]. Expenses and Income - Other income decreased by approximately 18.52%, from approximately HK$5.4 million to approximately HK$4.4 million, primarily due to COVID-19 related rent concessions and government grants[8]. - Selling expenses decreased by approximately 18.75%, from approximately HK$3.2 million to approximately HK$2.6 million, attributed to tightened COVID-19 control measures[8]. - Administrative expenses decreased significantly by approximately 58.75%, from approximately HK$40.0 million to approximately HK$16.5 million, due to similar reasons affecting selling expenses[8]. - The Group's finance costs for the nine months ended September 30, 2022, totaled HK$461,000, a reduction from HK$651,000 in 2021, indicating a decrease of 29.2%[46]. - The total comprehensive income for the nine months ended September 30, 2022, was a loss of HK$670,000[22]. Shareholder Information - As of September 30, 2022, Mr. Wang Chuang holds a beneficial interest of 550,520,000 shares, representing approximately 19.29% of the issued share capital[75]. - All Favour Holdings Limited holds 582,547,765 shares, representing approximately 20.41% of the issued share capital[82]. - Arab Osman Mohammed and Wong Kwok Keung each hold 583,422,765 shares, accounting for about 20.44% of the issued share capital[82]. - Li Ren personally owns 21,380,000 shares, which translates to approximately 0.75% of the issued share capital[82]. - China Orient Asset Management Co., Ltd holds 157,744,659 shares, representing 5.57% of the issued share capital[82]. - Changzhou Yaoguang Enterprise holds 262,400,000 shares, accounting for approximately 9.19% of the issued share capital[84]. - Wang Xiaogang is a beneficial owner of 149,450,000 shares, which is about 5.24% of the issued share capital[84]. - Mr. Dai, through his interests, is deemed to hold an aggregate of 583,422,765 shares, representing approximately 20.44% of the issued share capital[87]. - Mr. Li is deemed to be interested in a total of 603,927,765 shares, which is approximately 21.16% of the issued share capital[88]. Operational Insights - The Group has been closed for more than 240 working days due to government regulations and restrictions, yet it continues to demonstrate strong resilience and vitality in a challenging operating environment[67]. - In Q3 2022, the overall business dynamics improved with the relaxation of quarantine policies, showcasing significant competitiveness and commercial potential[67]. - The Group aims to expand its business scope in the medical industries and will reallocate resources to maintain its leading position in healthcare[67]. - Efforts will be made to improve operational performance and financial position, with continuous evaluation of the business environment and income streams[67]. - The Group plans to enhance working capital and cash flows by closely monitoring administrative expenses and operating costs, while also seeking potential customers[67]. Share Options and Compensation - The share option scheme adopted on September 14, 2011, was valid for ten years until September 13, 2021[97]. - The movement of share options under the adjusted scheme during the nine months ended September 30, 2022, is documented but not detailed in the provided content[99]. - The report highlights that 3,905,200 share options were granted to eligible persons, with a vesting schedule that allows for up to 20% to be exercised in specified periods[184]. - The report emphasizes the importance of the share options as part of the company's compensation strategy for retaining talent and incentivizing performance[126]. - The total number of outstanding share options reflects the company's commitment to aligning employee interests with shareholder value[111]. Future Outlook - The company is focusing on expanding its market presence and enhancing its product offerings through new technology[199]. - Future guidance includes a strategic emphasis on regenerative medicine advancements[199]. - The company is exploring potential mergers and acquisitions to bolster its market position[199]. - User data and performance metrics will be closely monitored to inform future strategies[199]. - The company aims to enhance shareholder value through effective management of share options and strategic initiatives[199].

Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million, representing a Y% growth compared to the previous period[4] - For the six months ended June 30, 2022, the Group reported revenue of HK$74,322,000, a decrease of 35.7% compared to HK$115,302,000 for the same period in 2021[20] - Revenue from continuing operations for the six months ended June 30, 2022, was HK$86,256,000, a decrease of 25.2% from HK$115,302,000 in 2021[51] - Total comprehensive income for the period was a loss of HK$1,971,000 for the six months ended June 30, 2022, compared to a total comprehensive income of HK$26,495,000 in the prior year[22] - Total comprehensive income for the three months ended June 30, 2022, was a loss of HK$3,875,000, compared to a profit of HK$22,907,000 in the same period of 2021, representing a decline of 117%[24] - The Group's profit for the period from continuing operations was HK$2,222,000 for the six months ended June 30, 2022, down 92.1% from HK$27,988,000 in the same period of 2021[20] - The Group's total reportable segments' gain was HK$3,808,000, down from HK$29,745,000 in 2021, a decrease of 87.2%[53] Cost Management - Cost management strategies have improved operational efficiency, resulting in a reduction of H% in overall expenses[4] - Selling expenses for the six months ended June 30, 2022, were HK$9,225,000, an increase of 12.5% from HK$8,200,000 in the same period of 2021[20] - Administrative expenses for the six months ended June 30, 2022, amounted to HK$34,883,000, a decrease of 1.5% compared to HK$35,400,000 in the previous year[20] - Selling expenses decreased by approximately 11.24%, from approximately HK$1.79 million for the six months ended 30 June 2021 to approximately HK$1.59 million for the Period[103] - Administrative expenses decreased by approximately 73.55%, from approximately HK$34.9 million for the six months ended 30 June 2021 to approximately HK$9.2 million for the Period[103] Market Expansion and Strategy - The company provided a positive outlook for the next quarter, projecting revenue growth of B% driven by new product launches and market expansion strategies[4] - The company is planning to expand its market presence in D regions, aiming for a market share increase of E%[4] - A strategic acquisition was announced, expected to enhance the company's capabilities and contribute an additional F million in revenue annually[4] - The Group is focusing on building a regenerative medicine health management ecosystem to improve service capabilities and quality[99] - Strategic cooperation with designated service providers in the PRC aims to enhance service levels and achieve sustainable growth[99] - The Group plans to attract quality partners in the industry to promote large-scale replication and development[99] Research and Development - Investment in R&D for new technologies has increased by C%, focusing on innovative regenerative medicine solutions[4] Cash Flow and Assets - The Group's cash flow from operating activities for the six months ended June 30, 2022, was not disclosed in the provided data[20] - Current assets as of June 30, 2022, totaled HK$259,204,000, slightly up from HK$258,388,000 as of December 31, 2021, indicating a marginal increase of 0.3%[26] - Net current assets decreased to HK$101,376,000 as of June 30, 2022, from HK$111,075,000 as of December 31, 2021, a decline of 8.7%[28] - The company reported total liabilities of HK$157,828,000 as of June 30, 2022, up from HK$147,313,000 as of December 31, 2021, reflecting an increase of 7.9%[28] - The company’s cash and bank balances increased to HK$255,617,000 as of June 30, 2022, from HK$247,867,000 as of December 31, 2021, an increase of 3.5%[26] Share Options and Employee Incentives - The company reported a significant increase in share options granted, with a total of 3,905,200 options outstanding as of June 30, 2022[146] - The exercise price of the share options is set at HK$0.291, with a vesting schedule that includes multiple periods for exercising options[147] - The company has outlined a structured approach to share options, with up to 20% of options available for exercise during specified periods, indicating a strategic incentive plan for employees[149] - The report highlights the movement of share options during the six months ended June 30, 2022, reflecting active management of employee incentives[150] - The company is focused on ensuring that options granted are aligned with performance metrics, enhancing employee engagement and retention[149] Financial Reporting and Compliance - The interim financial report was prepared in accordance with HKAS 34, and no significant issues were identified during the review[16] - The Group's financial statements are prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs) and applicable disclosure requirements of the GEM Listing Rules[41] - The interim financial statements for the period ended June 30, 2022, were reviewed by McM (HK) CPA Limited, with an unmodified review report included in the interim report[110] Shareholder Information - Wang Chuang holds a beneficial ownership of 538,670,000 shares, representing 18.87% of the issued share capital[112] - All Favour Holdings Limited has a long position of 582,547,765 shares, accounting for approximately 20.41% of the issued share capital[119] - China Orient Asset Management Co., Ltd holds 157,744,659 shares, which is approximately 5.57% of the issued share capital[119] - The Group maintained 24 employees as of June 30, 2022, consistent with the previous year[110] Other Financial Metrics - The Group recorded an exchange loss on translation of financial statements of foreign operations of HK$4,193,000 for the six months ended June 30, 2022[22] - The Group's income tax expense for the current period was HK$1,416,000, compared to HK$1,227,000 in 2021, reflecting an increase of 15.4%[66] - The Group's total finance costs decreased to HK$170,000 in 2022 from HK$530,000 in 2021, a reduction of 67.9%[60]

Financial Performance - The Group's revenue for the three months ended March 31, 2022, was approximately HK$51.9 million, representing an increase of approximately HK$10.9 million, or 26.69%, compared to approximately HK$41.0 million for the same period last year[4]. - Cost of sales increased by approximately 51.37% from approximately HK$30.3 million to approximately HK$45.9 million, in line with the increase in revenue from the healthcare products and services segment[5]. - The Group recorded a gross profit of approximately HK$6.0 million, a decrease of approximately 43.63% compared to approximately HK$10.6 million in the prior period, with a gross profit margin decreasing from 25.98% to 11.56%[5]. - Other income for the period was approximately HK$0.5 million, mainly representing COVID-19 related rent concessions[5]. - Selling and distribution expenses remained constant at approximately HK$0.6 million for both periods due to cost control measures[5]. - Administrative and other expenses decreased by approximately 49.32%, from approximately HK$7.9 million to approximately HK$4.0 million, primarily due to continued cost-cutting efforts[5]. - Profit before income tax from continuing operations was approximately HK$1.9 million, compared to approximately HK$4.9 million in the prior period[7]. - The profit for the period from continuing operations was approximately HK$1.1 million, a decrease from approximately HK$3.7 million in the prior period[7]. - Total comprehensive income for the period was HK$1,903,000, a decrease from HK$3,744,000 in the previous year[11]. - Earnings per share from continuing operations attributable to owners of the Company was HK$0.039, down from HK$0.129 in the prior year[11]. - The Group's profit before income tax for the period was HK$1,879,000, down from HK$4,916,000 in the prior year, a decrease of 61.8%[27]. - Total finance costs decreased to HK$49,000 in Q1 2022 from HK$374,000 in Q1 2021, reflecting a reduction of 86.9%[36]. - Other income for the period was HK$500,000, down from HK$3,096,000 in the previous year, a decrease of 83.8%[31]. - The Group's total income tax expense for the period was HK$757,000, compared to HK$1,222,000 in the same period last year, a decrease of 38.0%[41]. Revenue Growth - The increase in revenue was primarily attributed to the healthcare products and services segment[4]. - For the three months ended March 31, 2022, the Group reported revenue from contracts with customers of HK$51,916,000, an increase from HK$40,980,000 in the same period of 2021, representing a growth of approximately 26.5%[25]. - The increase in revenue is attributed to enhanced sales strategies and market demand for healthcare products[25]. - The Group's healthcare products and services segment continues to be the primary focus, with ongoing production and sales activities[24]. - The Company experienced a significant improvement in profit compared to the previous year, indicating a recovery in operations[9]. Shareholder Information - Wang Chuang holds 538,670,000 shares, representing approximately 18.87% of the issued share capital[63]. - All Favour Holdings Limited is the beneficial owner of 582,547,765 shares, accounting for 20.41% of the issued share capital[66]. - Deng Shufen has an interest in 583,422,765 shares, which is about 20.44% of the issued share capital[66]. - China Orient Asset Management Co., Ltd holds 157,744,659 shares, representing 5.57% of the issued share capital[66]. - Changzhou Yaoguang Enterprise Management Consulting Limited holds 262,400,000 shares, which is 9.19% of the issued share capital[66]. - Kong Yu Dong has a long position of 160,600,000 shares, accounting for 5.63% of the issued share capital[75]. - Wang Xiaogang is a beneficial owner of 149,450,000 shares, representing 5.24% of the issued share capital[77]. - The total long positions of major shareholders indicate a concentrated ownership structure within the company[65]. - The shareholding structure reflects significant interests held by a few key individuals and entities, indicating potential influence over corporate decisions[80]. Corporate Governance - The company has complied with all code provisions of the Corporate Governance Code throughout the period, except for code provision C.2.1, which requires separation of the roles of chairman and chief executive officer[112]. - The audit committee consists of three independent non-executive directors, and the unaudited condensed consolidated financial statements for the period have been reviewed by the committee[112]. - The company's board is structured with a balance of power, comprising one executive director, one non-executive director, and three independent non-executive directors[112]. - The chairman and chief executive officer of the company is Mr. Wang Chuang, who holds both positions[112]. Strategic Initiatives - The Company aims to optimize its management structure and introduce influential talents to enhance competitiveness[56]. - The Company plans to optimize its asset portfolio and dispose of non-aligned business segments to improve operational efficiency and profitability[56]. - The Group continues to explore opportunities for market expansion and potential new product development in the healthcare sector[24]. - The company is focused on maintaining a robust financial structure while exploring opportunities for market expansion[106]. - The management emphasized the importance of aligning employee incentives with company performance through share options[107]. - The company aims to expand its market presence through strategic initiatives, including potential mergers and acquisitions[104]. Market Conditions and Future Outlook - The company is closely monitoring the impact of COVID-19 on its financial performance for the three months ended March 31, 2022[113]. - Future guidance remains cautious, reflecting ongoing market uncertainties and potential impacts on performance[97]. - The company expects a revenue growth forecast of 20% for the full year 2022, driven by increased demand for its services[115]. - The company is exploring potential acquisitions to bolster its technology capabilities in the regenerative medicine sector[115]. - Future product launches are anticipated to include at least three new regenerative therapies by Q4 2022[115].