Financial Performance - For the year ended December 31, 2020, the Group recorded revenue of approximately RMB 14.0 million, a slight increase from RMB 13.8 million in the corresponding period of 2019[18]. - For the year ended December 31, 2020, the Group's revenue decreased by approximately RMB3.5 million, or approximately 13.7%, from approximately RMB25.5 million in 2019 to approximately RMB22.0 million in 2020[45]. - The Group recorded revenue of approximately RMB14.0 million in the second half of 2020 in China, slightly up from approximately RMB13.8 million in the same period of 2019[21]. - Revenue for the year ended December 31, 2020, decreased by approximately RMB3.5 million or approximately 13.7% to approximately RMB22.0 million from approximately RMB25.5 million for the year ended December 31, 2019[48]. - Gross profit for the year ended December 31, 2020, was approximately RMB14.7 million, a decrease of approximately RMB3.2 million or approximately 17.9% from approximately RMB17.9 million in 2019[52]. - The gross profit margin remained stable at approximately 67.0% for the year ended December 31, 2020, compared to approximately 70.2% in 2019[53]. - Other income increased by approximately RMB390,000 or approximately 150.0% to approximately RMB650,000 for the year ended December 31, 2020, primarily due to government grants related to COVID-19[54]. - The loss attributable to owners of the Company was approximately RMB11.6 million for the year ended December 31, 2020, compared to approximately RMB284,000 in 2019[70]. - Basic loss per share for the year was RMB2.91 cents, compared to RMB0.07 cents for the year ended December 31, 2019[71]. - The adjusted loss before tax for the year ended December 31, 2020, was approximately RMB6.2 million, compared to RMB284,000 for the previous year[74]. Impact of COVID-19 - The COVID-19 epidemic caused a halt in production and sales for over five weeks, significantly impacting business in the first half of 2020[18]. - The Group's factory in China halted production and sales for over five weeks due to the Epidemic, significantly affecting sales from ultimate end customers[33]. - Sales of biological reagents, including male fertility IVD reagents, decreased sharply to approximately RMB19.8 million in 2020 compared to approximately RMB24.2 million in 2019, reflecting a significant impact from the Epidemic[46]. Research and Development - The Group intends to purchase equipment for research and development of the supporting test platform in the future[19]. - The Group has ten recent research projects focused on diagnosing male and female infertility, with plans to complete medical device registration for some projects to be launched in 2021[39]. - The Group intends to further invest in the research and development of POCT, including purchasing raw materials and setting up a new production line for expansion[42]. - The Group completed clinical trials for the sperm nuclear DNA integrity reagent and is proceeding with Class II medical device registration[124]. - The Group submitted Class II medical device registration for improved products, including the "seminal plasma fructose quantitative assay kit" and "seminal plasma neutral alpha-glucosidase quantitative assay kit," which are currently under approval[126]. Sales and Distribution - The Group recognized strong demand for rapid Point-Of-Care diagnostic testing (POCT) and began preliminary selection and evaluation of a supporting test platform in the second half of 2020[19]. - The Group sold products to 22 new direct sale customers and 73 new distributors during the year ended December 31, 2020, expanding its sales channels despite the challenges posed by the Epidemic[37]. - The Group established a new company, Smartronic Limited, holding 49% equity, to facilitate the sales and distribution of Nutronic's supplements through cross-border e-commerce channels in the PRC[25]. - The Group has been granted a total of 23 natural health product licenses for its registered brand "Nutronic" in Canada, with products distributed through various e-commerce platforms[38]. Employee and Management - The Group had 80 full-time employees as of December 31, 2020, an increase from 73 in 2019, with staff costs recognized in profit or loss amounting to approximately RMB 13.7 million[86]. - The Group's existing staff temporarily took on additional responsibilities due to the inability to hire suitable personnel[128]. - The Group recruited 4 sales and marketing personnel and 2 technicians by December 31, 2020, but was unable to meet the expected hiring numbers due to market constraints[132]. - As of December 31, 2020, the Group filled positions for 2 R&D personnel, 2 technicians, and 2 production workers, but faced challenges in hiring due to a limited supply of suitable candidates in the market[128]. Share Options and Financial Management - The Company adopted a Share Option Scheme on January 13, 2020, to incentivize employees and assist in recruitment and retention[135]. - A total of 26,008,000 share options were granted on April 9, 2020, at an exercise price of HK$0.125 per share, with options exercisable until April 8, 2030[136]. - The fair value of the share options granted on April 9, 2020, was approximately RMB 2,660,000, recognized as equity-settled share-based payment expenses[145]. - The expected life of the share options is ten years, with an expected volatility of 103.1%[145]. - The actual utilization of net proceeds included RMB 4,710,000 for developing new products, which accounted for 41.5% of the total proceeds[115]. - The Group allocated RMB 4,011,000 (27.3% of total proceeds) for expanding its sales network and enhancing marketing activities[115]. Corporate Governance - The Group did not recommend payment of a final dividend for the year ended December 31, 2020, consistent with the previous year[78]. - As of December 31, 2020, the Group had no significant contingent liabilities or outstanding corporate guarantees[103]. - As of December 31, 2020, the Group had no outstanding company guarantees or significant contingent liabilities, consistent with the previous year[108]. - No significant events affecting the company occurred from December 31, 2020, to the date of the report[146]. Management Experience - The company’s executive directors have extensive experience in the IVD reagents industry, with over 15 years for Mr. Zhang Shuguang and over 10 years for Mr. Zhang Chunguang[151][154]. - Mr. Pan, the CFO, has over 20 years of experience in financial reporting, business advisory, auditing, accounting, tax, and mergers and acquisitions[161]. - Dr. Chow has more than 20 years of experience in biomedical testing and molecular diagnostics technology, leading commercialization efforts at Thunderbio[169]. - Dr. Cheng has over 25 years of experience in financial reporting, business advisory, auditing, accounting, tax investigation, and liquidation[174]. - Mr. Chan has over 30 years of experience in legal practice in Hong Kong and is currently a partner at Peter K.S. Chan & Co.[181].

Revenue Performance - For the nine months ended September 30, 2020, the Group experienced a significant decrease in revenue from male fertility IVD reagent products, primarily due to the COVID-19 epidemic, which led to a halt in production for approximately five weeks [16]. - Revenue for the nine months ended 30 September 2020 decreased by approximately RMB4.3 million, or 23.4%, to approximately RMB14.1 million compared to RMB18.4 million for the same period last year [27]. - Sales of male fertility IVD reagents accounted for approximately 76.5% of total revenue, with revenue from this segment decreasing by approximately RMB3.7 million, or 25.7%, to approximately RMB10.8 million [32]. - Revenue for the three months ended September 30, 2020, was RMB 6,891,000, a slight increase of 1.7% compared to RMB 6,776,000 for the same period in 2019 [153]. - Total revenue for the three months ended September 30, 2020, was RMB 6,891,000, a slight increase from RMB 6,776,000 in the same period of 2019, representing a growth of 1.7% [170]. - Total revenue for the nine months ended September 30, 2020, was RMB 14,099,000, down from RMB 18,412,000 in the same period of 2019, a decrease of 23.5% [170]. Profit and Loss - For the nine months ended 30 September 2020, the company recorded a loss attributable to owners of approximately RMB 6.6 million, compared to a profit of approximately RMB 1.7 million for the same period in 2019, representing a significant decrease due to reduced revenue [50][53]. - The company reported a loss attributable to owners of RMB 6,602,000 for the nine months ended September 30, 2020, compared to a profit of RMB 1,721,000 in the same period of 2019 [153]. - The basic and diluted loss per share for the nine months ended September 30, 2020, was RMB (1.64) cents, compared to earnings of RMB 0.43 cents in the same period of 2019 [153]. - For the three months ended September 30, 2020, the company reported a loss attributable to owners of RMB 495,000 compared to a profit of RMB 1,498,000 in the same period of 2019, representing a significant decline [196]. Expenses - Gross profit for the nine months ended 30 September 2020 was approximately RMB9.9 million, a decrease of approximately RMB3.3 million, or 25.2%, from RMB13.2 million for the same period last year [33]. - Administrative expenses increased by approximately RMB3.3 million, or 51.9%, from approximately RMB6.3 million to approximately RMB9.6 million, primarily due to non-cash share option expenses and other operational costs [43]. - Research and development expenses increased by approximately RMB 351,000 or 30.3%, from RMB 1.2 million for the nine months ended 30 September 2019 to RMB 1.5 million for the same period in 2020, mainly due to the purchase of raw materials and equipment for product application of chemiluminescence technology [49][52]. - Selling and distribution expenses for the three months ended September 30, 2020, were RMB 1,797,000, an increase of 7.4% compared to RMB 1,673,000 in the same period of 2019 [153]. Impairment and Receivables - Impairment losses on trade receivables were approximately RMB744,000 for the nine months ended 30 September 2020, compared to a reversal of impairment losses of approximately RMB534,000 for the same period in 2019 [41]. - Trade receivables impairment loss for the nine months ended 30 September 2020 was approximately RMB 744,000, an increase from RMB 534,000 for the same period in 2019, primarily due to the deterioration of customers' repayment ability since the outbreak of the pandemic [45]. - Impairment losses on trade receivables for the nine months ended September 30, 2020, were RMB 744,000, a significant increase from a loss of RMB 511,000 in the same period of 2019 [183]. Government Support and Other Income - Other income increased by approximately RMB366,000, or 185.8%, to approximately RMB563,000 due to grants received from the Hong Kong Government under the Employment Support Scheme [35]. - Government grants received in Q3 2020 amounted to RMB 373,000, significantly higher than RMB 21,000 in Q3 2019 [179]. - The company reported total other income of RMB 444,000 for Q3 2020, compared to RMB 81,000 in Q3 2019, marking an increase of 448.1% [179]. Corporate Governance and Compliance - The Company has adopted and complied with the Corporate Governance Code during the nine months ended September 30, 2020 [134]. - The Board is committed to high corporate governance standards to safeguard shareholder interests and enhance corporate value [133]. - The Audit Committee has reviewed the unaudited condensed consolidated financial results for the nine months ended September 30, 2020, and confirmed compliance with applicable accounting standards and GEM Listing Rules [149]. - The Company has confirmed that all Directors complied with the required standards for securities transactions during the relevant period [142]. Share Capital and Options - As of 30 September 2020, the company's issued share capital was HK$4 million, with 400,000,000 shares issued at HK$0.01 each [71]. - The company granted a total of 26,008,000 share options on 9 April 2020, with an exercise price of HK$0.125 per share, all options are exercisable until 8 April 2030 [58][60]. - The weighted average number of ordinary shares in issue for the purpose of basic earnings per share remained constant at 400,000 shares for both the current and previous periods [196]. Future Outlook and Strategy - The Group aims to enhance product competitiveness through increased research and development and market promotion efforts [21]. - The establishment of a laboratory in Beijing is in progress to support research and development in assisted reproductive treatment technologies [25]. - The Group will continue to employ prudent treasury policies to maintain strong liquidity ratios for future growth opportunities [78].

Revenue and Financial Performance - For the six months ended June 30, 2020, the Group experienced a significant decrease in revenue from sales of male fertility IVD reagent products, attributed to a decline in sales in the PRC due to COVID-19, resulting in halted production and sales for approximately five weeks[18]. - The Group's revenue decreased by approximately RMB4.4 million, or approximately 38.1%, to approximately RMB7.2 million for the six months ended 30 June 2020 compared to approximately RMB11.6 million for the same period in 2019[32]. - Revenue from male fertility IVD reagents, which accounted for approximately 84.7% of total revenue, decreased by approximately RMB3.5 million, or approximately 36.5%, to approximately RMB6.1 million for the six months ended 30 June 2020[33]. - For the six months ended 30 June 2020, the loss attributable to the owners of the Company was approximately RMB6.1 million, compared to a profit of approximately RMB223,000 for the same period in 2019, representing a significant decrease in revenue[49]. - Basic loss per share for the period was RMB1.53 cents, compared to earnings per share of RMB0.06 cents for the six months ended 30 June 2019[52]. - Total comprehensive loss attributable to the owners of the Company for the six months ended June 30, 2020, was RMB 6,110,000, compared to a profit of RMB 223,000 in the same period of 2019[167]. Expenses and Cost Management - The Group recorded a gross profit of approximately RMB5.2 million for the six months ended 30 June 2020, representing a decrease of approximately RMB3.3 million or approximately 38.9% from approximately RMB8.5 million for the same period in 2019[36]. - Administrative expenses increased by approximately RMB2.6 million or approximately 58.9% to approximately RMB7.1 million for the six months ended 30 June 2020, mainly due to equity-settled share option expenses[47]. - Research and development expenses increased by approximately RMB280,000 or approximately 33.7% to approximately RMB1.1 million for the six months ended 30 June 2020, attributed to purchasing raw materials and equipment for product development[48]. - Selling and distribution expenses for the six months ended June 30, 2020, were RMB 2,802,000, a slight decrease from RMB 2,918,000 in the same period of 2019[167]. Impact of COVID-19 - The uncertainty of the COVID-19 epidemic is expected to continue affecting the business environment and product sales throughout 2020[18]. - Sales and marketing activities were reduced due to the Epidemic, impacting customer visits and conference attendance[81]. - The expected timeline for utilizing unutilized proceeds has been extended to December 31, 2021, due to delays caused by the Epidemic[74]. Share Options and Capital Management - The Company granted an aggregate of 26,008,000 share options on 9 April 2020, with an exercise price of HK$0.125 per share[55]. - The fair value of the share options granted on 9 April 2020 was determined to be RMB2,660,000 using the binomial model[63]. - The net proceeds from the Share Offer amounted to approximately HK$16.6 million, with approximately HK$11.9 million remaining unutilised as of 1 January 2020[69]. - 41.5% of the net proceeds (HK$6.9 million) were allocated to developing new products and international cooperation projects, with actual utilization at HK$4.2 million[72]. - 27.3% of the net proceeds (HK$4.5 million) were designated for expanding the sales network and enhancing marketing activities, with actual utilization at HK$2.7 million[72]. - 27.9% of the net proceeds (HK$4.6 million) were allocated to developing auxiliary reproductive supply business, with no funds utilized as of June 30, 2020[72]. Corporate Governance and Compliance - The Company adopted and complied with the Corporate Governance Code during the six months ended June 30, 2020[151]. - The Board is committed to high corporate governance standards to safeguard shareholder interests and enhance corporate value[150]. - The Audit Committee consists of three independent non-executive Directors, including Mr. Kwok Chi Shing as Chairman[161]. - The Audit Committee reviewed the unaudited condensed consolidated financial results for the six months ended June 30, 2020, and confirmed compliance with applicable accounting standards and GEM Listing Rules[163]. Human Resources and Employment - As of June 30, 2020, the Group employed 74 full-time employees as of June 30, 2020, an increase from 73 employees as of December 31, 2019[88]. - As of June 30, 2020, the Group filled positions for two R&D personnel, two technicians, and two production workers, but faced challenges in hiring due to limited market supply and the impact of the Epidemic[78]. Future Outlook and Strategic Initiatives - The Group aims to enhance product competitiveness through increased research and development and market promotion efforts, including expanding the product portfolio and strengthening sales networks[24]. - The Group will continue to seek business opportunities to broaden income sources and enhance shareholder value amid unpredictable macroeconomic conditions and the ongoing Epidemic[28]. - The Group entered into several non-legally binding memoranda of understanding for establishing joint ventures related to assisted reproductive treatment and microfluidic technology in the PRC[23]. Financial Position and Assets - Current assets decreased to RMB 58,142,000 as of June 30, 2020, from RMB 63,468,000 as of December 31, 2019[168]. - Trade receivables decreased to RMB 8,592,000 as of June 30, 2020, from RMB 10,079,000 as of December 31, 2019[168]. - Net assets as of June 30, 2020, were RMB 67,235,000, down from RMB 70,685,000 as of December 31, 2019[169]. - The company’s cash and bank balances decreased to RMB 42,042,000 as of June 30, 2020, from RMB 48,793,000 as of December 31, 2019[168]. Regulatory and Reporting Standards - The financial statements are prepared in accordance with applicable Hong Kong Financial Reporting Standards (HKFRSs) and the disclosure requirements of the Hong Kong Companies Ordinance[181]. - The company has not early adopted any new and revised HKFRSs that have been issued but not yet effective in the current accounting period[182]. - The company has made adequate disclosures in its financial reporting as per legal requirements[163].

Revenue Performance - For the three months ended March 31, 2020, the Group experienced a significant decrease in revenue from sales of male fertility IVD reagent products, attributed mainly to the COVID-19 epidemic, which led to emergency public health measures in various provinces in the PRC[16]. - The Group's revenue decreased by approximately RMB3.0 million, or approximately 59.5%, to approximately RMB2.1 million for the three months ended 31 March 2020 compared to RMB5.1 million for the same period in 2019[26]. - Revenue from male fertility IVD reagents, which accounted for approximately 74.6% of total revenue, decreased by approximately RMB2.7 million, or approximately 64.2%, to approximately RMB1.5 million for the three months ended 31 March 2020[27]. - Total revenue for the three months ended March 31, 2020, was RMB 2,056,000, a decrease of 59.5% compared to RMB 5,071,000 for the same period in 2019[140]. - Revenue from male fertility IVD reagents was RMB 1,534,000, down 64.1% from RMB 4,281,000 in the previous year[140]. - Revenue from distributors decreased to RMB 1,186,000, a decline of 51.0% from RMB 2,425,000 in 2019[142]. Profitability and Loss - The Group recorded a gross profit of approximately RMB1.5 million for the three months ended 31 March 2020, representing a decrease of approximately RMB2.3 million or approximately 60.5% from approximately RMB3.8 million for the same period in 2019[30]. - The company reported a loss before tax of RMB 2,753,000 for Q1 2020, compared to a profit of RMB 35,000 in Q1 2019[123]. - Loss attributable to the owners of the company for the period was RMB 2,753,000, compared to a loss of RMB 148,000 in the previous year[123]. - Basic loss per share for Q1 2020 was RMB 0.69, compared to RMB 0.04 for the same period in 2019[123]. Expenses and Financial Management - Administrative expenses increased by approximately RMB200,000 or approximately 9.7% to approximately RMB2.3 million for the three months ended 31 March 2020[40]. - Selling and distribution expenses increased to RMB 1,428,000 in Q1 2020 from RMB 1,364,000 in Q1 2019, reflecting a rise of 4.7%[123]. - Research and development expenses slightly increased from approximately RMB310,000 for the three months ended 31 March 2019 to approximately RMB417,000 for the same period in 2020[41]. - The Group's finance costs related to lease liabilities increased to RMB 15,000 in 2020 from RMB 8,000 in 2019[161]. - The depreciation of property, plant, and equipment was RMB 468,000 for the three months ended March 31, 2020, compared to RMB 357,000 in 2019[161]. Market Outlook and Strategy - The anticipated growth of the PRC male fertility IVD reagent market is expected to be driven by increasing infertility rates, acceptance of assisted reproductive treatment, rising per capita income, and favorable government policies[16]. - The Group aims to enhance product competitiveness through increased focus on research and development and market promotion, with strategies including expanding the product portfolio and strengthening R&D capabilities[20]. - The Group's strategy includes expanding and consolidating its sales and distribution network and developing auxiliary reproductive supply business[20]. - The Group's management remains optimistic about future market opportunities despite current challenges posed by the epidemic[16]. Government and Regulatory Environment - The PRC government is expected to continue supporting the development of the biomedical industry, which may benefit the Group in the long term[16]. - The implementation of a universal two-child policy in the PRC is expected to contribute positively to the growth of the male fertility IVD reagent market[16]. - The Group's PRC subsidiary, Shenzhen Huakang, is entitled to a concessional tax rate of 15% as a "New and High Technology Enterprise"[155]. - The Group's Shenzhen Huakang subsidiary enjoys a preferential tax rate of 15% due to its status as a "high-tech enterprise" in China[157]. Share Capital and Corporate Governance - As of 31 March 2020, the Company's issued share capital was HK$4 million, with 400,000,000 shares issued at HK$0.01 each[51]. - The Directors do not recommend the payment of any dividend for the three months ended 31 March 2020[71]. - The Company has complied with the Corporate Governance Code during the three months ended March 31, 2020[105]. - The Audit Committee consists of three independent non-executive Directors, ensuring compliance with GEM Listing Rules[113]. - The Company has established an effective internal control system as part of its governance practices[110]. Shareholder Information - As of March 31, 2020, Mr. Zhang Shuguang and his concert party hold a total of 240,000,000 shares, representing 60.0% of the company's total shares issued[86]. - Crystal Grant Limited, wholly owned by Mr. Zhang Shuguang, holds 144,576,000 shares, while Ever Charming Inc., wholly owned by Mr. Chang Yim Yang, holds 95,424,000 shares[86]. - Gallizul Global Investments Incorporated holds 36,000,000 shares, representing 9.0% of the total shares[94]. - Huang Yan also has interests in a controlled corporation holding 36,000,000 shares, equivalent to 9.0%[94]. - The interests stated are all long positions[88].

Revenue Performance - Revenue from the PRC male fertility IVD reagent market amounted to approximately RMB19.4 million, accounting for approximately 76.3% of the Group's total revenue for the year ended 31 December 2019[19] - Total revenue for the Group decreased from approximately RMB21.0 million in 2018 to RMB19.4 million in 2019, representing a decline of approximately 7.6%[19] - The Group's revenue for the year ended December 31, 2019, decreased by approximately RMB3.2 million, or 11.1%, to approximately RMB25.5 million compared to RMB28.7 million for the year ended December 31, 2018[35] - Revenue from male fertility IVD reagents, which accounted for approximately 76.3% of total revenue, was approximately RMB19.4 million, representing a decrease of approximately RMB1.6 million or 7.6% from RMB21.0 million in 2018[36] - Sales of parasite antibody detection reagents decreased by approximately RMB1.1 million, or 23.1%, from approximately RMB4.5 million in 2018[37] - Sales of auxiliary reproductive supplies and equipment decreased by approximately RMB648,000, or 33.0%, from approximately RMB2.0 million in 2018[38] - Direct sales revenue decreased from approximately RMB 14.1 million in 2018 to approximately RMB 13.0 million in 2019, a decline of RMB 1.1 million or 7.8%[82] - Revenue from sales to distributors decreased by approximately RMB 2.1 million or 14.6%, from approximately RMB 14.6 million in 2018 to approximately RMB 12.4 million in 2019[84] Operational Strategies - The Group focused on expanding its product portfolio and improving existing product offerings, as well as strengthening research and development capabilities[18] - The Group actively worked on expanding and consolidating its sales and distribution network during the year[18] - The Group maintained a stable employee base while cultivating and recruiting talented employees[18] - The Group emphasized international cooperation as part of its strategic initiatives[18] - The Group successfully developed a cost-efficient sales-centered philosophy aimed at serving the best interests of shareholders[18] - The Group's operational management methods were enhanced to improve execution capability and competitiveness[18] - The Group's strategy includes expanding the product portfolio and improving existing offerings, strengthening R&D capabilities, and developing auxiliary reproductive products[72] - The Group signed a non-legally binding memorandum of understanding for a joint venture in Hong Kong with an Australian fertility group to develop assisted reproductive technologies[73] Research and Development - The Group appointed Dr. Tian Long as a medical advisor to strengthen its R&D capacity in male fertility IVD reagents and auxiliary reproductive supplies[30] - Research and development expenses increased by approximately RMB288,000 or 19.5% to approximately RMB1.8 million for the year ended 31 December 2019, attributed to more research projects initiated[55] - Research and development expenses increased from RMB 1.5 million in 2018 to RMB 1.8 million in 2019, representing a growth of approximately RMB 288,000 or 19.5%[60] - The Group completed clinical trials for the sperm nuclear DNA integrity reagent and is planning to proceed with registration as of December 31, 2019[128] - The Group submitted Class II medical device registrations for improved products, including the "seminal plasma fructose quantitative assay kit" and "seminal plasma neutral alpha glucosidase quantitative assay kit" to the Guangdong Food and Drug Administration[129] Financial Performance - Gross profit decreased by approximately RMB3.7 million or 17.1% to approximately RMB17.9 million for the year ended 31 December 2019, compared to approximately RMB21.6 million for the year ended 31 December 2018[42] - The gross profit margin remained relatively stable at approximately 70.2% for the year ended 31 December 2019, compared to approximately 75.3% for the year ended 31 December 2018[43] - Selling and distribution expenses increased by approximately RMB2.7 million or 65.9% to approximately RMB6.8 million for the year ended 31 December 2019, primarily due to increased staff costs and marketing expenses[50] - Administrative expenses rose by approximately RMB4.0 million or 70.2% to approximately RMB9.7 million for the year ended 31 December 2019, mainly due to increased professional fees and staff costs[51] - The loss attributable to owners of the Company was approximately RMB284,000 for the year ended 31 December 2019, compared to approximately RMB459,000 for the year ended 31 December 2018[57] - Basic loss per share for the year was RMB0.07 cents, compared to RMB0.15 cents for the year ended 31 December 2018[58] - Other gains increased by approximately RMB670,000 or 413.6% to approximately RMB508,000 for the year ended 31 December 2019, mainly due to favorable foreign currency translation[45] Market Conditions - The decrease in male fertility IVD reagent sales is attributed to a decline in birth rates in the PRC from 10.94‰ in 2018 to 10.48‰ in 2019[36] - The birth rate in China decreased from 10.94‰ in 2018 to 10.48‰ in 2019, impacting sales of male fertility IVD reagents[67] - The Group anticipates growth in the male fertility IVD reagent market driven by rising infertility rates and supportive government policies[66] Human Resources - The number of sales and marketing personnel increased from 25 in 2018 to 30 in 2019 to support business expansion efforts[81] - The Group was unable to hire the expected number of suitable research and development personnel due to a limited supply of qualified candidates in the market as of December 31, 2019[128] - The Group has filled positions for two research and development personnel, two technicians, and two production workers as of December 31, 2019[128] Financial Management - Total cash and bank balances as of December 31, 2019, were approximately RMB 48.8 million, down from approximately RMB 54.8 million as of December 31, 2018[100] - Lease liabilities as of December 31, 2019, were approximately RMB 1.6 million, with a gearing ratio of approximately 2.3%[101] - Staff costs recognized in profit or loss amounted to approximately RMB 10.2 million for the year ended December 31, 2019, compared to RMB 6.6 million in 2018[103] - The Group did not make any material acquisitions or disposals of subsidiaries and affiliated companies during the year ended December 31, 2019[110] - The Group did not hold any significant investments as of December 31, 2019[111] - The Group's capital structure remained unchanged since the Listing, with equity attributable to owners amounting to approximately RMB 70.7 million as of December 31, 2019[102] - As of December 31, 2019, the Group had capital commitments of approximately RMB 78,000 for the acquisition of property, plant, and equipment, a decrease from RMB 329,000 in 2018[118] Corporate Governance - The company has independent non-executive directors responsible for supervising compliance and corporate governance matters[165] - The company has adopted and complied with the Corporate Governance Code during the year ended December 31, 2019[192] - The Board conducted reviews of the internal control system to ensure effectiveness and adequacy[193] - The company has a non-competition deed in place with controlling shareholders to prevent business competition[200] Use of Proceeds - The net proceeds from the Share Offer amounted to approximately HK$16.6 million after deducting underwriting fees and other expenses[130] - 41.5% of the net proceeds (HK$6.087 million) were allocated to developing new products and improving existing products, with actual expenditure of HK$4.710 million[133] - 27.3% of the net proceeds (HK$4.011 million) were used for expanding the sales network and enhancing marketing activities, with actual expenditure of HK$2.560 million[133] - 27.9% of the net proceeds (HK$4.100 million) were allocated to developing auxiliary reproductive supply business, with no actual expenditure reported[133] - 3.3% of the net proceeds (HK$0.481 million) were used for working capital, with actual expenditure of HK$0.281 million[133] - The remaining unused net proceeds as of December 31, 2019, were placed as bank balances with licensed banks in Hong Kong and PRC[136] - The company is not aware of any material change to the planned use of proceeds as of the date of the report[138]

Revenue and Market Performance - For the nine months ended September 30, 2019, the Group experienced a decrease in revenue from sales of male fertility IVD reagent products, attributed to a decline in birth rates and increased price sensitivity among customers [17]. - The Group anticipates continued support from the PRC Government for the biomedical industry, with growth in the male fertility IVD reagent market driven by rising infertility rates and the implementation of a universal two-child policy [17]. - The Group's major product line is male fertility IVD reagents, which are facing challenges due to market conditions [17]. - Revenue from male fertility IVD reagents decreased to RMB 14,517,000 for the nine months ended September 30, 2019, down 6.4% from RMB 15,508,000 in 2018 [144]. - Revenue from sales of biological reagents for the nine months ended September 30, 2019, was RMB 16,676,000, accounting for 90.5% of total revenue, while sales of auxiliary reproductive supplies and equipment contributed RMB 1,736,000 [144]. - The Group's total revenue for the nine months ended September 30, 2019, was RMB 18,412,000, a decrease of 12.8% compared to RMB 21,049,000 for the same period in 2018 [144]. Financial Performance - The Group's revenue decreased by approximately RMB2.6 million, or 12.4%, to approximately RMB18.4 million for the nine months ended 30 September 2019 compared to approximately RMB21.0 million for the same period in 2018 [24]. - The Group recorded a gross profit of approximately RMB13.2 million for the nine months ended 30 September 2019, a decrease of approximately RMB2.8 million, or approximately 17.5%, from approximately RMB16.0 million for the same period in 2018 [31]. - The gross profit margin remained relatively stable at approximately 71.6% for the nine months ended 30 September 2019, compared to approximately 75.8% for the same period in 2018 [32]. - Profit attributable to the owners of the company decreased to approximately RMB1.7 million for the nine months ended 30 September 2019, compared to approximately RMB4.0 million for the same period in 2018 [47]. - Basic earnings per share for the period was RMB0.43 cents, down from RMB1.32 cents for the nine months ended 30 September 2018 [47]. - The net profit attributable to the owners of the Company for the nine months ended September 30, 2019, was RMB 1,721,000, down 56.4% from RMB 3,951,000 in the previous year [122]. Expenses and Cost Management - Selling and distribution expenses increased from approximately RMB2.6 million to approximately RMB4.6 million, representing a growth of approximately RMB2.0 million or 76.9% during the period [41]. - Administrative expenses increased from approximately RMB3.4 million to approximately RMB6.4 million, representing an increase of approximately RMB3.0 million or 88.2% during the period [42]. - Research and development expenses increased from approximately RMB1.1 million for the nine months ended 30 September 2018 to approximately RMB1.2 million for the nine months ended 30 September 2019, representing an increase of approximately RMB66,000 or 6.0% [46]. - Total staff costs for the nine months ended September 30, 2019, were RMB 6,539,000, an increase of 37% compared to RMB 4,772,000 in the same period of 2018 [162]. Strategic Initiatives - The Group's strategy includes expanding the product portfolio, enhancing research and development capabilities, and consolidating the sales and distribution network [18]. - The Group aims to improve product competitiveness through increased focus on research and development and market promotion efforts [18]. - The Group is committed to developing its auxiliary reproductive supply business as part of its growth strategy [18]. - The Group plans to develop and sell auxiliary reproductive products in the PRC and overseas markets, collaborating with a Canadian manufacturer to enhance male fertility functions [23]. Corporate Governance and Compliance - The Company has adopted and complied with the Corporate Governance Code during the relevant period [110]. - The Board conducted reviews of the internal control system to ensure effectiveness and adequacy [111]. - All Directors confirmed full compliance with the Required Standard for securities transactions during the relevant period [112]. - The Company appointed Ever-Long Securities Company Limited as the new compliance adviser effective from 31 May 2019 [102]. Shareholder Information - As of September 30, 2019, Mr. Zhang Shuguang held 240,000,000 shares, representing 60.0% of the total shareholding [83]. - The total number of shares in issue as of September 30, 2019, was 400,000,000 [85]. - The company’s shares are controlled by Mr. Zhang Shuguang and Mr. Chang Yim Yang, who hold equity interests indirectly through their respective companies [126]. Other Financial Information - The company recognized a gain on the disposal of property, plant, and equipment of RMB 10,000 for the nine months ended September 30, 2019, compared to no gains in the same period of 2018 [155]. - The total impairment losses reversed for the nine months ended September 30, 2019, were RMB 534,000, compared to RMB 129,000 in the same period of 2018, indicating a substantial increase of 314% [157]. - The company incurred research and development expenses of RMB 1,157,000 for the nine months ended September 30, 2019 [122].

Revenue and Profitability - For the six months ended June 30, 2019, the Group experienced a decrease in revenue from sales of male fertility IVD reagent products, which was the major product, attributed to a decrease in birth rate and increased price sensitivity among customers[17]. - The Group's revenue decreased by approximately RMB1.7 million or 12.9%, to approximately RMB11.6 million for the six months ended 30 June 2019, compared to approximately RMB13.4 million for the same period in 2018[21]. - Revenue from male fertility IVD reagents, which accounted for approximately 82.7% of total revenue, decreased by approximately RMB1.2 million or 11.4% to approximately RMB9.6 million for the six months ended 30 June 2019[21]. - The Group recorded a profit of approximately RMB 223,000 for the six months ended June 30, 2019, a decrease from approximately RMB 2.0 million for the same period in 2018[41]. - Excluding non-recurring listing expenses, the Group recorded a profit before tax of approximately RMB 670,000 for the six months ended 30 June 2019, down from approximately RMB 6.0 million for the same period in 2018[42]. - Basic earnings per share for the six months ended June 30, 2019, was RMB 0.06, down from RMB 0.68 in the same period of 2018[150]. Expenses and Financial Performance - Gross profit decreased by approximately RMB1.6 million or 16.0% to approximately RMB8.5 million for the six months ended 30 June 2019, with a gross profit margin of approximately 72.6%[26][27]. - Selling and distribution expenses increased by approximately RMB1.3 million or 82.6% to approximately RMB2.9 million for the six months ended 30 June 2019, primarily due to increased staff costs and marketing expenses[35]. - Administrative expenses rose by approximately RMB2.3 million or 105.8% to approximately RMB4.5 million for the six months ended 30 June 2019, driven by higher audit fees and staff costs[36]. - Research and development expenses increased from approximately RMB 699,000 for the six months ended 30 June 2018 to approximately RMB 832,000 for the six months ended 30 June 2019, representing an increase of approximately RMB 133,000 or 19.0%[40]. - The company incurred net cash used in operating activities of RMB 7,767,000 for the six months ended June 30, 2019, compared to a net cash inflow of RMB 1,297,000 in the same period of 2018[156]. Strategic Focus and Development - The development strategy includes expanding the product portfolio, improving existing offerings, strengthening R&D capabilities, and consolidating the sales and distribution network[18]. - The Group's strategic focus includes enhancing R&D capabilities, expanding the product portfolio, and increasing market promotion efforts to capture market opportunities[19]. - The Group has continued the final stage of clinical trials for in vitro diagnostic reagents for sperm nuclear DNA integrity, with three independent hospitals involved[54]. - The Group manufactured a prototype of semen biochemical immunoassay equipment, which is currently undergoing debugging[54]. - Three newly developed products are undergoing final clinical evaluation and trials, with plans to proceed with registration within the year[66]. Government Support and Market Conditions - The Group anticipates continued support from the PRC Government for the biomedical industry, driven by rising infertility rates, acceptance of assisted reproductive treatments, and favorable government policies[17]. - The decrease in sales of auxiliary reproductive supplies and equipment was approximately RMB241,000, primarily due to reduced demand for automatic enzyme-linked immunologic workstations[22]. Corporate Governance and Compliance - The Board is committed to high corporate governance standards, which are essential for safeguarding shareholder interests and enhancing corporate value[135]. - The Company has complied with the Corporate Governance Code during the relevant period, ensuring transparency and accountability[132]. - The Audit Committee consists of three independent non-executive Directors, ensuring oversight of financial reporting and internal controls[141]. - The Company has made adequate disclosures in accordance with GEM Listing Rules and other legal requirements[146]. Financial Position and Assets - As of June 30, 2019, the Group's total cash and bank balances were approximately RMB 46.1 million, a decrease from approximately RMB 54.8 million as of December 31, 2018, primarily due to daily operating expenses[63]. - Total assets less current liabilities as of June 30, 2019, amounted to RMB 71,902,000, slightly up from RMB 71,451,000 as of December 31, 2018[152]. - Non-current assets as of June 30, 2019, totaled RMB 14,448,000, an increase from RMB 13,667,000 as of December 31, 2018[151]. - The Group reported a net current assets value of RMB 57,454,000 as of June 30, 2019, slightly down from RMB 57,784,000 as of December 31, 2018[151]. Shareholder Information - The interests of Mr. Zhang Shuguang, a Director, include 240,000,000 shares, representing 60.0% of the total shares issued as of June 30, 2019[107]. - The total number of shares in issue as of June 30, 2019, was 400,000,000[107]. - As of June 30, 2019, the substantial shareholders include Crystal Grant and Ever Charming, each holding 240,000,000 shares, representing 60.0% of the total shareholding[116]. - Gallizul Global Investments and Huang Yan each hold 36,000,000 shares, accounting for 9.0% of the total shareholding[116]. Accounting Policies and Financial Reporting - The financial statements have been prepared in accordance with applicable Hong Kong Financial Reporting Standards (HKFRSs) and the disclosure requirements of the Hong Kong Companies Ordinance[166]. - The unaudited condensed consolidated financial statements are presented in Renminbi (RMB), which is the functional currency of the Company and its subsidiaries[160]. - The Group has not early adopted any new and revised HKFRSs that have been issued but not yet effective in the current accounting period[169]. - The financial statements have been prepared under the historical cost basis[174]. - The Group has chosen not to separate non-lease components from lease components, treating them as a single lease component[191].

Market Conditions and Challenges - For the three months ended March 31, 2019, the Group faced challenges including a decrease in the birth rate in China, increased price sensitivity among customers, and the impact of a vaccine incident from late 2018 [19]. - The overall market conditions indicate a potential for recovery and growth in the biomedical sector, despite current challenges [19]. - The increase in per capita income and healthcare expenditures in China is expected to positively impact the demand for the Group's products [19]. Growth Strategy - The growth of the PRC male fertility IVD reagent market is expected to be driven by rising infertility rates, acceptance of assisted reproductive treatments, and favorable government policies, including the implementation of a universal two-child policy [19]. - The Group's development strategy includes expanding the product portfolio, strengthening R&D capabilities, and consolidating the sales and distribution network [20]. - The Group aims to enhance product competitiveness through continuous investment in research and development and increased market promotion efforts [20]. - The Group is focused on developing its auxiliary reproductive supply business as part of its growth strategy [20]. - The Group plans to cultivate and recruit talented employees to support its growth strategies [20]. Financial Performance - The Group's revenue decreased by approximately RMB913,000, or approximately 15.3%, to approximately RMB5.1 million for the three months ended 31 March 2019 [23]. - Revenue from male fertility IVD reagents, which accounted for approximately 84.4% of total revenue, decreased by approximately 10.2% to approximately RMB4.3 million [24]. - Gross profit for the period was approximately RMB3.8 million, representing a slight decrease of approximately RMB326,000 or approximately 8.0% from the previous year [28]. - The gross profit margin improved from approximately 68.2% to approximately 74.0% due to increased production efficiency and reduced headcount [29]. - Selling and distribution expenses increased by approximately 67.0% to approximately RMB1.4 million, primarily due to higher staff costs and increased marketing expenses [36]. - Administrative expenses rose by approximately 97.0% to approximately RMB2.1 million, driven by increased staff costs and one-off bonuses [37]. - The Group recorded a loss of approximately RMB148,000 for the period, an improvement from a loss of approximately RMB230,000 in the previous year [42]. - Excluding non-recurring listing expenses, the Group recorded a profit before tax of approximately RMB35,000, down from approximately RMB1.9 million in the previous year [43]. Research and Development - Research and development expenses remained stable at approximately RMB310,000 for the period [41]. - Research and development expenses remained relatively stable, approximately RMB 304,000 for the three months ended March 31, 2018, and RMB 310,000 for the three months ended March 31, 2019 [45]. Corporate Governance - The company has appointed RHB Capital as its compliance adviser, which has declared its independence as per GEM Listing Rules [3]. - The audit committee has been established in compliance with GEM Listing Rules and consists of three independent non-executive Directors [4]. - The company has adopted a code of conduct for securities transactions by Directors, confirming full compliance during the relevant period [5]. - The company has applied the principles and code provisions of the Corporate Governance Code since its listing date [6]. - The board will continue to monitor and review the company's corporate governance practices to ensure compliance with the Corporate Governance Code [7]. - There were no incidents of non-compliance with the required standards by relevant employees noted by the company [8]. - The company has conducted reviews of its internal control system to ensure effectiveness and adequacy [9]. - The board believes that good corporate governance standards are essential for safeguarding shareholder interests and enhancing corporate value [10]. Shareholding and Capital Structure - As of March 31, 2019, the company's issued share capital was HK$4,000,000, with 400,000,000 shares issued at HK$0.01 each [50]. - Mr. Zhang Shuguang holds 240,000,000 ordinary shares, representing 60.0% of the total shareholding [73]. - The total number of shares in issue as of March 31, 2019, is 400,000,000 [75]. - Crystal Grant Limited and Ever Charming Inc. are both deemed to have an aggregate interest of 240,000,000 shares, equating to 60.0% [83]. - Gallizul Global Investments Incorporated holds 36,000,000 shares, representing 9.0% of the total shareholding [83]. - As of March 31, 2019, no directors or chief executives had any interests or short positions in the shares or debentures of the company [78]. - The directors confirm that none of the controlling shareholders or directors have competing business interests [86]. - All interests stated in the reports are long positions [77]. - The beneficial ownership of Crystal Grant Limited is 240,000,000 shares, which is 60.0% of the total [83]. - Huang Yan has interests in 36,000,000 shares through controlled corporations, also representing 9.0% [83]. - As of March 31, 2019, the company has a total of 240,000,000 shares deemed to be interested by Mr. Zhang Shuguang and Mr. Chang Yim Yang, consisting of 144,576,000 shares held by Crystal Grant and 95,424,000 shares held by Ever Charming [1]. Taxation - The effective corporate income tax rate applicable to the group's subsidiaries is 15% [47]. - The tax rate for entities established in the PRC is 25%, but Shenzhen Huakang is entitled to a reduced tax rate of 15% as a "New and High Technology Enterprise" [148]. - The latest approval for Shenzhen Huakang to enjoy the 15% tax benefit was obtained in October 2018, valid for three years until 31 December 2020 [148].

Huakang Biomedical Holdings Company Limited 華康生物醫學控股有限公 司 (incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock Code 股份代號: 8622 ANNUAL REPORT 年 報 20 18 Huakang Biomedical Holdings Company Limited 華康生物醫學控股有限公 司 ANNUAL REPORT 2018 年報 Huakang Biomedical Holdings Company Limited 華康生物醫學控股有限公 This Report, for which the Directors (the "Directors") of Huakang Biomedical Holdings Company Limited (the "Company", and together with its subsidiaries, the "Group", "we" or "our") collectively ...