Core Viewpoint - The company reported a significant decline in revenue and profit for the fiscal year ending December 31, 2023, primarily due to reduced demand for COVID-19 related services, although there is a recovery in non-COVID-19 testing services following the lifting of restrictions [1]. Financial Performance - The company achieved revenue of 3.298 billion RMB, a year-on-year decrease of 32.15% [1]. - Profit attributable to equity holders of the parent company was 235 million RMB, down 65.5% year-on-year [1]. - Basic earnings per share were 0.34 RMB [1]. Gross Margin Analysis - The overall gross margin for the fiscal year was 43.5%, compared to 39.0% for the previous year [1]. - The increase in gross margin was attributed to a decrease in raw material costs compared to 2022, various cost control measures implemented in 2023, and a shift towards higher-margin specialized tests [1].

Financial Performance - Total revenue for 2023 was RMB 3,297,828, a decrease of approximately 32.2% compared to RMB 4,860,613 in 2022[2] - Gross profit for 2023 was RMB 1,434,107, down from RMB 1,896,165 in 2022[2] - Net profit for the year was RMB 262,322, a significant decline from RMB 684,884 in 2022[2] - The company recorded revenue of RMB 3,297.8 million for the year ending December 31, 2023, a decrease of 32.2% compared to the same period in 2022[7] - Net profit for the year decreased by 61.7% to RMB 262.3 million as of December 31, 2023[7] - The company's revenue for medical diagnostic services decreased to RMB 3,297,828 thousand in the year ended December 31, 2023, down from RMB 4,860,613 thousand in 2022, representing a decline of approximately 32.1%[59] - The group’s profit before tax for the year ended December 31, 2023, was RMB 1,692,871,000, a decrease from RMB 2,570,710,000 in 2022, representing a decline of approximately 34.2%[61] Revenue Growth Areas - Regular business revenue increased by over 15.0% compared to 2022, excluding the impact of COVID-19 business[4] - The special inspection business revenue grew by over 40.0% year-on-year[4] - Revenue from specialized testing areas, including blood, tumors, infections, and maternal and child health, grew by over 40% in 2023, with collaborative business revenue increasing by over 50% year-on-year[8] Operational Efficiency and Technology - The company launched a new laboratory information system (LIS) that improved report review and generation efficiency by nearly 10 times[4] - The company aims to enhance operational efficiency and market responsiveness through the deep application of AI technology[6] - The integration of big data and artificial intelligence is expected to transform the clinical testing industry, enhancing diagnostic accuracy and reliability[16] - The company is actively investing in upgrading its laboratory information systems and improving data management capabilities to leverage big data and AI tools[16] Strategic Initiatives - The collaboration project with Guardant Health successfully launched in China in September 2023[4] - The company is focusing on strategic investments and alliances to explore emerging growth opportunities[6] - The company is focusing on expanding its diagnostic services to lower-tier hospitals, addressing the imbalance in healthcare resource distribution across regions in China[17] Cost Management - The cost of sales for the year ended December 31, 2023, was RMB 1,863.7 million, down about 37.1% from RMB 2,964.4 million for the year ended December 31, 2022, aligning with the decrease in revenue[18] - Sales and marketing expenses for the year ended December 31, 2023, were RMB 485.2 million, a decrease of approximately 12.3% from RMB 553.3 million for the year ended December 31, 2022, mainly due to reduced employee costs[20] - Administrative expenses for the year ended December 31, 2023, were RMB 271.0 million, a decrease of about 4.0% from RMB 282.3 million for the year ended December 31, 2022, despite increased costs related to a new subsidiary[21] - Research and development expenses for the year ended December 31, 2023, were RMB 143.5 million, down approximately 11.8% from RMB 162.7 million for the year ended December 31, 2022, due to reduced costs for reagents and consumables[22] Taxation and Financial Costs - Income tax expenses decreased by approximately 36.0% to RMB 87.1 million, down from RMB 135.9 million for the previous year, aligning with the decrease in pre-tax profits[25] - The company's income tax expense for the year ended December 31, 2023, was RMB 87,050,000, compared to RMB 135,928,000 for the year ended December 31, 2022, reflecting a decrease of approximately 36%[69] - Financial costs rose by approximately 12.4% to RMB 86.3 million, compared to RMB 76.8 million for the previous year, mainly due to increased interest expenses on offshore bank loans denominated in USD[25] Assets and Liabilities - Current assets decreased to RMB 3,303.4 million from RMB 3,895.0 million, while current liabilities decreased to RMB 1,757.0 million from RMB 2,418.4 million[27] - The total liabilities decreased from RMB 2,418,432 thousand in 2022 to RMB 1,757,018 thousand in 2023[47] - The total net book value of property and equipment as of December 31, 2023, was RMB 410,987,000, compared to RMB 375,428,000 as of January 1, 2023, showing an increase of about 9%[73] Shareholder Information - The basic earnings per share for the year ended December 31, 2023, was RMB 0.34, down from RMB 1.04 in 2022[46] - The diluted earnings per share for the year ended December 31, 2023, was RMB 0.31, compared to RMB 0.96 in 2022, representing a decrease of approximately 68%[72] - The company did not declare or pay any dividends for the year ended December 31, 2023[71] - The total issued and paid-up share capital increased to RMB 97,000 as of December 31, 2023, from RMB 86,000 in 2022, following the issuance of 73,952,662 shares[89] Compliance and Governance - The audit committee has reviewed the consolidated financial statements for the year ended December 31, 2023, confirming compliance with applicable accounting standards[94] - The company has adopted corporate governance codes and has been compliant since its listing on June 30, 2023[91] - The company has not deviated from the disclosed use of proceeds and business strategies in the prospectus[96]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,644,113 thousand, a decrease of 32.7% from RMB 2,445,614 thousand in the same period of 2022[7]. - Gross profit for the same period was RMB 717,008 thousand, down 27.5% from RMB 989,070 thousand year-over-year[7]. - Net profit for the period was RMB 120,258 thousand, a decline of 68.0% compared to RMB 375,395 thousand in the previous year[7]. - Basic earnings per share decreased to 0.17101 from 0.58226, representing a drop of 70.7%[7]. - Adjusted EBITDA for the six months was RMB 331,503 thousand, down 31.1% from RMB 481,629 thousand in the prior year[7]. - The company reported an adjusted net profit of RMB 183,149 thousand, a decrease of 41.0% from RMB 310,495 thousand year-over-year[7]. - The company's revenue for the six months ended June 30, 2023, was RMB 1,644.1 million, a decrease of 32.8% compared to the same period in 2022[8]. - The net profit for the six months ended June 30, 2023, decreased by 68.0% to RMB 120.3 million from RMB 375.4 million for the same period in 2022[31]. - EBITDA for the six months ended June 30, 2023, was RMB 268.2 million, down from RMB 545.2 million in the same period of 2022, representing a decline of 50.9%[33]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.17101, down from RMB 0.58226 in the same period of 2022, a decline of 70.7%[36]. Operational Efficiency and Strategy - The company is focusing on new product development and market expansion strategies to recover from the decline in revenue[7]. - Future outlook includes potential mergers and acquisitions to enhance market presence and operational capabilities[7]. - The company aims to improve operational efficiency through the integration of advanced technologies and AI solutions[7]. - The company plans to enhance its testing capabilities and product portfolio, focusing on expanding its special testing services, which have significantly driven sales growth over the past three years[16]. - The company aims to invest in advanced testing technologies and methods, including mass spectrometry and early cancer screening technologies, to improve operational efficiency[18]. - The company is committed to optimizing IT infrastructure and automating laboratory processes to enhance production efficiency and reduce operational costs[19]. Market and Demand Trends - The decline in testing volume was primarily due to reduced demand for COVID-19 testing following the easing of zero-COVID policies at the end of 2022[8]. - The demand for ICL testing is expected to increase due to the government's promotion of tiered medical services and the growing number of hospitals in lower-tier cities[12]. - The shift in hospital revenue structure towards examination and treatment services is anticipated to drive increased demand for clinical testing and outsourcing to ICLs[12]. - The aging population and improved diagnostic services are driving an increase in testing demand, with a significant rise in chronic disease prevalence[13]. - The outsourcing rate of testing in health check centers is increasing due to growing customer demand for high-quality and cost-effective testing services[13]. Financial Position and Assets - The total current assets decreased from RMB 3,895.0 million as of December 31, 2022, to RMB 3,752.0 million as of June 30, 2023, a reduction of 3.7%[37]. - Inventory decreased by 33.7% to RMB 152.0 million as of June 30, 2023, from RMB 229.4 million as of December 31, 2022, primarily due to reduced procurement of COVID-19 testing reagents and consumables[37]. - Trade receivables decreased by 3.9% to RMB 1,785.3 million as of June 30, 2023, from RMB 1,856.8 million as of December 31, 2022, due to enhanced collection measures[38]. - The total current liabilities decreased from RMB 2,418.4 million as of December 31, 2022, to RMB 2,034.4 million as of June 30, 2023, a reduction of 15.9%[37]. - Cash and cash equivalents rose by 69.4% to RMB 16,443 million as of June 30, 2023, compared to RMB 9,704 million as of June 30, 2022, driven by improved working capital management[44]. Employee and Management Information - The total number of employees increased to 5,917 as of June 30, 2023, from 5,659 as of June 30, 2022, with total salary costs amounting to RMB 5,758 million for the six months ended June 30, 2023[52]. - The company’s management compensation increased to RMB 15,516,000 for the six months ended June 30, 2023, compared to RMB 8,208,000 in the same period of 2022, reflecting an increase of about 89.5%[135]. Corporate Governance and Compliance - The company has complied with all applicable corporate governance codes since its listing on June 30, 2023[59]. - The audit committee, consisting of three independent non-executive directors, reviewed the interim financial statements for the six months ending June 30, 2023[62]. - The company has not deviated from the disclosed use of proceeds and business strategies in the prospectus since its listing[64]. Share Capital and Equity - As of June 30, 2023, the total issued share capital of the company is 723,452,291 shares[57]. - The company successfully completed its initial public offering on June 30, 2023, with a total of 17,288,500 shares issued at a price of HKD 12.32 per share[125]. - The company converted all preferred shares into 52,761,653 ordinary shares following the successful IPO on June 30, 2023[123]. Related Party Transactions - Sales to related party Aikang amounted to RMB 50,000, a decrease from RMB 53,000 in the same period of 2022, reflecting a decline of about 5.7%[131]. - Purchases from related party Aikang were RMB 24,307,000, down from RMB 32,342,000 in 2022, indicating a reduction of approximately 24.8%[131]. - The total amount payable to related parties decreased significantly to RMB 24,087,000 from RMB 61,071,000, a reduction of approximately 60.6%[134].

Financial Data and Key Metrics Changes - The company reported a revenue increase of 15% year-over-year, reaching $2.5 billion [1] - Net income rose by 10% to $500 million, resulting in a net profit margin of 20% [1] - Earnings per share (EPS) increased to $1.25, up from $1.10 in the previous quarter [1] Business Line Data and Key Metrics Changes - The technology segment saw a revenue growth of 20%, contributing $1.2 billion to total revenue [1] - The consumer products division experienced a decline of 5%, generating $800 million [1] - The services sector reported stable growth of 8%, with revenues of $500 million [1] Market Data and Key Metrics Changes - North American market revenue increased by 18%, accounting for 60% of total sales [1] - European market showed a modest growth of 5%, representing 25% of total revenue [1] - The Asia-Pacific region experienced a decline of 3%, contributing 15% to overall sales [1] Company Strategy and Development Direction and Industry Competition - The company plans to invest $300 million in R&D to enhance product innovation and maintain competitive advantage [1] - Focus on expanding market share in North America and Europe while addressing challenges in the Asia-Pacific region [1] - The management highlighted the importance of strategic partnerships to drive growth in emerging technologies [1] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the overall market recovery and expects continued growth in the technology sector [1] - Concerns were raised regarding supply chain disruptions and inflationary pressures impacting costs [1] - The company anticipates a stable demand environment for the next fiscal year, projecting a revenue growth of 10% to 15% [1] Other Important Information - The company announced a dividend of $0.50 per share, reflecting a commitment to returning value to shareholders [1] - A share buyback program of $100 million was also approved to enhance shareholder value [1] Q&A Session Summary Question: What are the key drivers for growth in the technology segment? - Management indicated that increased demand for cloud services and AI applications are primary growth drivers [1] Question: How is the company addressing supply chain challenges? - The company is diversifying its supplier base and increasing inventory levels to mitigate risks [1] Question: What is the outlook for the Asia-Pacific market? - Management acknowledged the challenges but remains committed to exploring new opportunities in the region [1]

Financial Performance - For the six months ended June 30, 2023, total revenue was RMB 1,644.1 million, a decrease of 32.8% compared to RMB 2,445.6 million in the same period of 2022[2]. - Gross profit for the same period was RMB 717.0 million, down from RMB 989.1 million year-on-year[2]. - The company recorded a net profit of RMB 120.3 million, significantly lower than RMB 375.4 million in the previous year[2]. - Adjusted EBITDA for the first half of 2023 was RMB 331.5 million, compared to RMB 481.6 million in the same period of 2022[2]. - The company's revenue for the six months ended June 30, 2023, was RMB 1,644.1 million, a decrease of 32.8% compared to RMB 2,445.6 million for the same period in 2022, primarily due to a significant decline in demand for COVID-19 testing following the relaxation of COVID-19 restrictions[18]. - The cost of sales for the same period was RMB 927.1 million, down 36.3% from RMB 1,456.5 million in the prior year, reflecting a decrease in costs associated with COVID-19 testing[19]. - Gross profit for the six months ended June 30, 2023, was RMB 717.0 million, compared to RMB 989.1 million for the same period in 2022, with a gross margin of 43.6%, up from 40.4% year-over-year due to lower raw material costs and cost control measures[20]. - Sales and marketing expenses decreased by 20.7% to RMB 233.7 million from RMB 294.7 million, mainly due to reduced employee costs and marketing expenses related to COVID-19 testing[21]. - Research and development expenses were RMB 69.1 million, a decrease of 13.6% from RMB 80.0 million in the previous year, primarily due to lower costs for reagents and consumables[23]. - Other expenses decreased by 42.0% to RMB 66.6 million from RMB 114.9 million, mainly due to provisions for expected credit losses[24]. - Other income and gains increased by 188.1% to RMB 34.0 million from RMB 11.8 million, driven by fair value gains related to non-controlling interests and increased bank interest income[25]. - Financial costs rose significantly by 383.2% to RMB 45.9 million from RMB 9.5 million, primarily due to increased bank loan interest[26]. - Income tax expenses decreased by 48.4% to RMB 31.5 million from RMB 61.0 million, consistent with the decrease in profit before tax[27]. - Net profit for the period fell by 68.0% to RMB 120.3 million from RMB 375.4 million in the prior year[27]. - For the six months ended June 30, 2023, the company's EBITDA (non-IFRS measure) was RMB 268,237,000, a decrease of 51.6% from RMB 554,217,000 for the same period in 2022[29]. - Adjusted EBITDA (non-IFRS measure) for the same period was RMB 331,503,000, down 31.2% from RMB 481,629,000 in 2022[29]. - The net profit for the six months ended June 30, 2023, was RMB 120,258,000, a decline of 68.0% compared to RMB 375,395,000 in 2022[30]. - Adjusted net profit (non-IFRS measure) for the same period was RMB 183,149,000, down 41.0% from RMB 310,495,000 in 2022[30]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.17101, down from RMB 0.58226 in the same period of 2022, reflecting a decline of about 71%[70]. - Diluted earnings per share for the same period was RMB 0.14206, compared to RMB 0.41797 in 2022, representing a decrease of approximately 66%[70]. Operational Highlights - The company has 18 ICLs accredited by ISO15189, ensuring compliance with international quality standards[3]. - The logistics network covers 30 provinces and municipalities in China, serving over 19,000 clients with more than 750 vehicles and 1,300 personnel[4]. - The sales and marketing team consists of over 1,500 trained employees, with more than 200 dedicated to promoting specialized testing services[4]. - The company is actively developing new testing methods and improving existing processes through a dedicated R&D team with extensive industry experience[4]. - The company aims to leverage advanced ICL and IT infrastructure to meet evolving clinical demands and improve operational efficiency[3]. - The company plans to enhance its testing capabilities and product portfolio by expanding its routine testing offerings and introducing new testing technologies, which are crucial for maintaining its market leadership[11]. - Since 2019, the company has opened 13 new ICLs, improving its capacity and market responsiveness, with a focus on expanding its network and collaborative opportunities[12]. - The company aims to develop new testing methods and innovative technologies, investing in areas such as mass spectrometry and early cancer screening technologies to improve operational efficiency[13]. - The company is committed to optimizing its IT infrastructure and automating laboratory processes, which will enhance production efficiency and ensure quality control across its ICL network[15]. - Eighteen ICLs have achieved ISO15189 certification, reflecting the company's commitment to quality assurance and continuous monitoring of quality indicators[15]. Market Trends and Opportunities - The Chinese government has implemented policies to support the growth of private healthcare institutions, enhancing the ICL market[6]. - The Chinese medical service market is rapidly growing, driven by government initiatives to enhance accessibility to primary care and improve the referral system, which is expected to increase the demand for ICL testing[7]. - The aging population in China has led to a surge in chronic diseases, significantly boosting the demand for testing services, with an increasing outsourcing rate for health check centers seeking cost-effective testing solutions[8]. - Hospitals are increasingly outsourcing clinical testing to ICL due to cost control pressures from healthcare reforms and regulations aimed at managing medical costs[9]. - ICL operators benefit from a broad network that allows them to connect with various hospitals, enabling them to conduct a high volume of tests at lower costs due to centralized management and resource optimization[10]. Financial Position and Assets - The company's current assets decreased from RMB 3,895.0 million as of December 31, 2022, to RMB 3,752.0 million as of June 30, 2023, a reduction of 3.7%[32]. - Inventory decreased by 33.7% from RMB 229.4 million as of December 31, 2022, to RMB 152.0 million as of June 30, 2023, primarily due to reduced procurement of COVID-19 testing reagents and consumables[32]. - Trade receivables decreased by 3.9% from RMB 1,856.8 million as of December 31, 2022, to RMB 1,785.3 million as of June 30, 2023, reflecting improved collection measures[32]. - Trade payables decreased by 17.0% from RMB 1,062.5 million as of December 31, 2022, to RMB 882.4 million as of June 30, 2023, consistent with changes in cost of sales[33]. - The company's non-current financial assets at fair value through profit or loss increased by 3.7% from RMB 8.1 million as of December 31, 2022, to RMB 8.4 million as of June 30, 2023[34]. - The company's cash and cash equivalents amounted to RMB 1,644.3 million, a 69.4% increase from RMB 970.4 million as of June 30, 2022, primarily due to improved working capital management and net proceeds from a global offering[37]. - The company's total liabilities as of June 30, 2023, included interest-bearing bank borrowings with an effective annual interest rate ranging from 3.50% to 7.42%[38]. - The company's capital expenditures for the six months ended June 30, 2023, were RMB 75.6 million, a decrease of 30.2% compared to RMB 108.3 million for the same period in 2022[40]. - As of June 30, 2023, the company's current ratio was 1.84, up from 1.61 as of December 31, 2022, indicating improved liquidity[42]. - The company's net assets increased significantly to RMB 1,471,504 thousand as of June 30, 2023, compared to RMB 612,336 thousand as of December 31, 2022, marking an increase of approximately 141.5%[50]. - The company's deferred tax assets amounted to RMB 30,035,000 for the six months ended June 30, 2023, compared to RMB 28,051,000 for the same period in 2022[67]. Shareholder and Corporate Governance - The company has not declared or paid any dividends for the six months ended June 30, 2023[68]. - The board does not recommend the payment of an interim dividend for the six months ended June 30, 2023[93]. - The company has complied with all applicable corporate governance codes since its listing on June 30, 2023[87]. - The company has not engaged in any buybacks or repurchases of its listed securities since its listing date[89]. - The interim report for the six months ended June 30, 2023, will be published by the end of September 2023[93]. - No significant events requiring disclosure have occurred from June 30, 2023, to the date of this announcement[93].