Financial Performance - Revenue for the year ended December 31, 2024, was RMB 4,669,078, a decrease of 3.9% compared to RMB 4,856,806 in 2023[3] - The net loss for the year increased by 64.6% to RMB 379,986 from RMB 230,868 in the previous year[3] - The adjusted net loss (non-IFRS measure) narrowed by 32.0% to RMB 57,228 from RMB 84,173 in 2023[3] - The adjusted net loss margin improved by 0.5 percentage points to (1.2%) from (1.7%) in 2023[3] - Gross profit for the year was RMB 1,538,349, compared to RMB 1,510,671 in 2023, indicating a slight increase[7] - Total customer contract revenue for the year ended December 31, 2024, was RMB 4,669,078 thousand, a decrease of 3.86% from RMB 4,856,806 thousand in 2023[26] - Revenue from pharmaceutical and healthcare business was RMB 4,539,619 thousand in 2024, down from RMB 4,717,592 thousand in 2023, representing a decline of 3.78%[26] - The total cost of goods sold for the year 2024 was RMB 3,130,729 thousand, compared to RMB 3,345,308 thousand in 2023, reflecting a decrease of 6.42%[30] - Employee benefits expenses totaled RMB 493,597 thousand in 2024, down from RMB 530,415 thousand in 2023, a reduction of 6.94%[30] - The company reported a net loss attributable to owners of the company of RMB 376,498 thousand for the year 2024, compared to a loss of RMB 225,809 thousand in 2023, indicating a worsening of 66.67%[36] Assets and Liabilities - Total assets decreased to RMB 2,632,675 from RMB 3,064,768 in 2023[12] - Cash and cash equivalents increased to RMB 1,217,954 from RMB 1,185,898 in 2023[12] - Total equity attributable to the company's owners decreased to RMB 1,660,214, down from RMB 2,037,422, representing a decline of approximately 18.5%[15] - Total liabilities decreased to RMB 952,445 from RMB 1,027,873, reflecting a reduction of about 7.3%[15] - Non-current liabilities increased to RMB 120,425 from RMB 115,329, marking an increase of approximately 4.5%[15] - Current liabilities decreased to RMB 832,020 from RMB 912,544, indicating a decrease of around 8.8%[15] - The company reported a cumulative loss of RMB 6,482,193, an increase from RMB 6,095,747, which is an increase of approximately 6.4%[15] Impairment and Goodwill - The company reported a goodwill impairment loss of RMB 198,917, which was not present in the previous year[7] - The carrying amount of goodwill as of December 31, 2024, was RMB 56,845 thousand, significantly reduced from RMB 255,762 thousand in 2023 due to impairment losses[38] - The company recognized an impairment loss of RMB 198,917 thousand on goodwill during the year 2024[38] - The impairment loss on other intangible assets was RMB 6.845 million for the year ended December 31, 2024, compared to zero for the year ended December 31, 2023[108] Revenue Sources - Online direct sales revenue was RMB 3,274.6 million, down 7.2% from RMB 3,527.9 million in 2023[76] - Business distribution revenue increased by 17.8% to RMB 642.8 million, up from RMB 545.8 million in 2023, attributed to an increase in product development and sales partnerships[80] - Offline retail revenue was RMB 622.2 million, a decrease of 3.4% from RMB 643.9 million in 2023[81] - Other business revenue was RMB 129.5 million, down 7.0% from RMB 139.2 million in 2023[82] Cash Flow and Investments - The net cash used in operating activities for the year ended December 31, 2024, was RMB 11.4 million, compared to RMB 5.2 million for the same period last year, primarily due to a pre-tax loss of RMB 370.1 million[124] - The net cash generated from investing activities for the year ended December 31, 2024, was RMB 157.0 million, mainly driven by the redemption of financial assets at fair value through profit or loss amounting to RMB 1,241.7 million[125] - The net cash used in financing activities for the year ended December 31, 2024, was RMB 121.4 million, primarily due to repayment of lease liabilities of RMB 80.2 million and share buybacks of RMB 11.9 million[126] - Capital expenditures for the year ended December 31, 2024, amounted to RMB 25.1 million, an increase from RMB 20.6 million for the year ended December 31, 2023[128] Corporate Governance - The company has adhered to the corporate governance code and maintains high standards of corporate governance to protect shareholder interests[148] - The roles of Chairman and CEO are currently held by the same individual, which the board believes ensures cohesive leadership and effective strategic planning[149] - The company will continue to review and monitor its corporate governance practices to ensure compliance with the corporate governance code[150] - All directors confirmed compliance with the standard code of conduct for securities trading during the reporting period[153] Strategic Initiatives - The company has highlighted significant opportunities for growth in the digital health sector driven by advancements in AI and supportive government policies[63] - The company has focused on "28-minute home service" as a key offering to provide digital and intelligent health services to millions of households[64] - The company aims to enhance its "medical, testing, pharmacy, and insurance" ecosystem through deep collaboration and digitalization, addressing residents' health needs[66] - The company is committed to embracing new AI technologies to upgrade its service ecosystem, aiming for greater intelligence and professionalism in its offerings[68] - The company has integrated social responsibility into its business strategy, aiming for sustainable development through economic and social benefits[67] Shareholder Actions - The company did not declare or recommend any dividends to ordinary shareholders for the year ending December 31, 2024, consistent with 2023[61] - The board of directors did not recommend the distribution of a final dividend for the year ending December 31, 2024[156] - The company repurchased a total of 22,000,000 shares at a total cost of approximately HKD 13.0 million, with shares subsequently canceled[154] Future Outlook - The company will closely monitor market conditions and adjust business strategies accordingly in the current challenging environment[106] - The company anticipates a downward adjustment in the expected growth rates for revenue and gross margin for its subsidiaries due to intensified market competition[105]

[Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=12&type=section&id=Business%20Review) In the first half of 2024, the company maintained stable operations, driven by policies such as national medical insurance online payment pilots, achieving a slight 0.9% increase in total revenue to 2,268 million RMB and a 23.5% reduction in net loss year-over-year | Metric | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 2,268 million RMB | 2,247 million RMB | +0.9% | | Net Loss | 90 million RMB | 117 million RMB | -23.5% | | Cumulative Registered Users | 43.6 million people | - | - | | Health Consultations & Inquiries | 3.5 million times | - | - | - The company actively responded to national medical insurance digitalization policies, enabling online national medical insurance payments in smart pharmacies across Beijing, Shanghai, Shenzhen, and other cities, viewing this as a milestone and new growth opportunity[12](index=12&type=chunk)[15](index=15&type=chunk) - The company plans to continue consolidating its instant health-to-home business in megacities, focusing on core urban layouts, and strengthening product and sales capabilities to expand into more markets[15](index=15&type=chunk)[25](index=25&type=chunk) [Express Pharmacy Business Analysis](index=13&type=section&id=Express%20Pharmacy%20Business) As a core revenue source, the express pharmacy business generated 2,210 million RMB in the first half of 2024, growing by 1.2% year-over-year, with business distribution channels showing the strongest growth | Channel | 2024 H1 Revenue (million RMB) | YoY Change | | :--- | :--- | :--- | | Online Direct Sales | 1,613 | +0.4% | | Business Distribution | 274 | +11.5% | | Offline Retail | 323 | -2.9% | | Other Businesses | 58 | -7.8% | | **Total Express Pharmacy Business** | **2,210** | **+1.2%** | [Online Consultation and Chronic Disease Management](index=15&type=section&id=Online%20Consultation) During the reporting period, the company provided over 3.5 million online consultation services through its internet hospital and a team of over 800 internal and external doctors, while also expanding chronic disease management services - Over **3.5 million online consultations** completed during the reporting period, with a medical team including over **800 doctors** and over **400 pharmacists**[22](index=22&type=chunk) - The company utilizes AI technology and health profiles for chronic disease management, establishing specialized departmental operations for respiratory, dermatological, and cardiovascular diseases, collaborating with experts from renowned hospitals to provide services[23](index=23&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) In the first half of 2024, the company's financial position significantly improved, with gross profit increasing by 10.1% to 752 million RMB and gross margin rising to 33.1% | Financial Metric (million RMB) | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 2,267.9 | 2,247.3 | +0.9% | | Gross Profit | 751.7 | 682.9 | +10.1% | | Gross Margin | 33.1% | 30.4% | +2.7pp | | Fulfillment Expenses | 223.3 | 212.4 | +5.1% | | Sales & Marketing Expenses | 485.9 | 465.2 | +4.4% | | R&D Expenses | 24.4 | 30.7 | -20.5% | | Loss for the Period | 89.8 | 117.4 | -23.5% | | Adjusted Net Loss | 38.5 | 44.1 | -12.7% | - The improvement in gross margin is primarily attributed to increased cost control efficiency in procurement processes and changes in the product sales mix[29](index=29&type=chunk) - As of June 30, 2024, the company held **1,234 million RMB** in cash and cash equivalents, with net cash generated from operating activities of **75 million RMB**, indicating a stable financial position[40](index=40&type=chunk)[41](index=41&type=chunk) [Use of Net Proceeds from Global Offering](index=23&type=section&id=Use%20of%20Net%20Proceeds%20from%20Global%20Offering) As of June 30, 2024, approximately 317.8 million HKD of the 341.6 million HKD net proceeds from the global offering had been utilized, with 60.9 million HKD deployed during the reporting period | Purpose | Utilized Amount (million HKD) | Unutilized Amount (million HKD) | Expected Full Utilization Time | | :--- | :--- | :--- | :--- | | Business Expansion | 153.7 | 0 | Not Applicable | | Technology Optimization | 51.2 | 0 | Not Applicable | | Service Enhancement | 34.2 | 0 | Not Applicable | | Potential Investments & Acquisitions | 44.5 | 23.8 | December 31, 2024 | | Working Capital | 34.2 | 0 | Not Applicable | [Corporate Governance and Other Information](index=25&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance](index=25&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) During the reporting period, the company complied with most provisions of the Corporate Governance Code, with one deviation where the roles of Chairman and CEO are not separated - The company has one corporate governance deviation: the roles of Chairman and CEO are not separated, both held by Mr. Yang Wenlong, which the Board believes facilitates efficient decision-making and will be continuously reviewed[57](index=57&type=chunk) [Shareholders and Shareholding Structure](index=26&type=section&id=Major%20Shareholders%20Interests) As of June 30, 2024, the controlling shareholder group (Mr. Yang Wenlong and parties acting in concert) collectively held approximately 49.21% of the company's shares | Major Shareholder | Shareholding Percentage (Approx.) | | :--- | :--- | | Controlling Shareholder Group (Mr. Yang Wenlong et al.) | 49.21% | | China Merchants Bank Co., Ltd. (and its affiliates) | 7.10% | | TPG Asia VII SF Pte. Ltd. (TPG) | 6.18% | - Executive Directors Xu Ning, Yu Lei, and Yu Qinglong hold 0.41%, 0.81%, and 0.64% interests in the company, respectively, through restricted shares and restricted share unit schemes[65](index=65&type=chunk) [Share Incentive Schemes (ESOP)](index=31&type=section&id=ESOP%20Scheme) The company has implemented multiple equity incentive schemes to motivate core employees, including the 2020 Share Incentive Scheme and the newly adopted 2023 Restricted Share Unit (RSU) Scheme - All **87,993,330 shares** involved in the 2020 Share Incentive Scheme (including pre-IPO share options, restricted shares, etc.) have been issued, with no new shares to be granted under this scheme post-listing[71](index=71&type=chunk) - The company adopted a new 2023 Restricted Share Unit (RSU) Scheme on June 27, 2023, with a cap of **26,829,457 shares** (2.0% of issued shares at adoption date), funded by secondary market repurchases[92](index=92&type=chunk)[101](index=101&type=chunk) - During the reporting period, under the 2023 RSU Scheme, the company instructed the trustee to purchase **12.45 million shares** and granted **13.40 million shares** to eligible participants, including executive directors[105](index=105&type=chunk) [Dividends and Other Matters](index=43&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2024, and no listed securities were purchased, sold, or redeemed by the company - The Board does not recommend an interim dividend for 2024[111](index=111&type=chunk) - During the reporting period, the company did not purchase, sell, or redeem any of its listed securities[108](index=108&type=chunk) [Financial Statements and Notes](index=46&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Financial Statement Summary](index=46&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) The Group's condensed consolidated financial statements for the six months ended June 30, 2024, have been reviewed by Deloitte Touche Tohmatsu, showing total assets of 2,990 million RMB and total liabilities of 1,048 million RMB | Item (thousand RMB) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Balance Sheet** | | | | Non-current Assets | 662,388 | 692,758 | | Current Assets | 2,328,005 | 2,372,010 | | **Total Assets** | **2,990,393** | **3,064,768** | | Non-current Liabilities | 132,294 | 115,329 | | Current Liabilities | 915,498 | 912,544 | | **Total Liabilities** | **1,047,792** | **1,027,873** | | **Total Equity** | **1,942,601** | **2,036,895** | | Item (thousand RMB) | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | **Income Statement** | | | | Revenue | 2,267,894 | 2,247,282 | | Gross Profit | 751,736 | 682,913 | | Loss Before Income Tax | (83,664) | (113,632) | | **Loss for the Period** | **(89,801)** | **(117,351)** | | Loss Per Share (RMB) | (0.06) | (0.08) | | **Cash Flow Statement** | | | | Net Cash from Operating Activities | 75,009 | 210,102 | | Net Cash from Investing Activities | 32,245 | 95,755 | | Net Cash Used in Financing Activities | (62,620) | (48,243) | [Summary of Notes to Financial Statements](index=53&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes to the financial statements disclose key accounting policies and detailed financial information, indicating that the company operates as a single reporting segment with all revenue and major non-current assets located in China - The Group has only one reporting segment, with all revenue generated from China[134](index=134&type=chunk) - Total share-based payment expenses for the reporting period amounted to **51.28 million RMB**, with restricted shares accounting for **48.817 million RMB**, representing a significant non-cash item impacting administrative expenses and net profit[153](index=153&type=chunk) - The company engages in significant transactions with related parties (primarily Renhe Pharmaceutical and its subsidiaries), with purchases of goods amounting to **89.555 million RMB** in the first half of 2024[174](index=174&type=chunk) - Total remuneration for key management personnel (directors and other senior executives) was **51.445 million RMB**, of which **48.298 million RMB** was share-based payments[179](index=179&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 2,267,894 thousand, an increase of 0.9% compared to RMB 2,247,282 thousand for the same period in 2023[2] - Adjusted net loss for the period was RMB 89,801 thousand, a reduction of 23.5% from RMB 117,351 thousand in the prior year[2] - Adjusted net loss margin improved to (1.7%) from (2.0%), an improvement of 0.3 percentage points[2] - Gross profit for the six months ended June 30, 2024, was RMB 751,736 thousand, compared to RMB 682,913 thousand in 2023, reflecting a gross margin increase[2] - Basic and diluted loss per share for the period was RMB 0.06, compared to RMB 0.08 in the same period last year[4] - For the six months ended June 30, 2024, total customer contract revenue amounted to RMB 2,267,894 thousand, a slight increase from RMB 2,247,282 thousand for the same period in 2023, representing a growth of approximately 0.9%[12] - The net loss for the first half of 2024 narrowed by approximately 23.5%, resulting in a loss of RMB 89.8 million compared to a loss of RMB 117.6 million in the same period last year[27] - Revenue from the fast drug business reached RMB 2,210.1 million, reflecting a year-on-year growth of 1.2% from RMB 2,184.6 million[27] - Revenue from business distribution increased by 11.5% to RMB 274.3 million, up from RMB 246.0 million in the previous year[29] - Total revenue increased by 0.9% to RMB 2,267.9 million for the six months ended June 30, 2024, compared to RMB 2,247.3 million for the same period in 2023[38] - Revenue from pharmaceutical and healthcare businesses rose by 1.2% to RMB 2,210.1 million for the six months ended June 30, 2024, from RMB 2,184.6 million for the same period in 2023[38] Expenses and Costs - Total comprehensive expenses for the period amounted to RMB 128,546 thousand, down from RMB 136,810 thousand in the previous year[3] - The cost of goods sold for the six months ended June 30, 2024, was RMB 1,515,673 thousand, compared to RMB 1,550,168 thousand in 2023, indicating a decrease of about 2.2%[13] - Employee benefits expenses totaled RMB 258,927 thousand for the six months ended June 30, 2024, slightly down from RMB 261,723 thousand in 2023, reflecting a decrease of approximately 1.1%[13] - Fulfillment expenses increased by 5.1% to RMB 223.3 million for the six months ended June 30, 2024, from RMB 212.4 million for the same period in 2023[41] - Sales and marketing expenses increased by 4.4% from RMB 465.2 million for the six months ended June 30, 2023, to RMB 485.9 million for the six months ending June 30, 2024, representing 21.4% of revenue[42] - R&D expenses decreased by 20.5% from RMB 30.7 million for the six months ended June 30, 2023, to RMB 24.4 million for the six months ending June 30, 2024, accounting for 1.1% of revenue[43] - General and administrative expenses decreased by 1.3% from RMB 127.8 million for the six months ended June 30, 2023, to RMB 126.1 million for the six months ending June 30, 2024, representing 5.6% of revenue[44] - Other income decreased by 64.7% from RMB 19.0 million for the six months ended June 30, 2023, to RMB 6.7 million for the six months ending June 30, 2024[45] - Other income increased by 6.8% from RMB 23.7 million for the six months ended June 30, 2023, to RMB 25.3 million for the six months ending June 30, 2024[46] - Financial costs increased by 12.8% from RMB 3.9 million for the six months ended June 30, 2023, to RMB 4.4 million for the six months ending June 30, 2024[47] - Income tax expenses increased by 64.9% from RMB 3.7 million for the six months ended June 30, 2023, to RMB 6.1 million for the six months ending June 30, 2024[48] Assets and Liabilities - The company's total assets as of June 30, 2024, were RMB 2,990,393 thousand, a decrease from RMB 3,064,768 thousand as of December 31, 2023[6] - Cash and cash equivalents increased to RMB 1,233,580 thousand from RMB 1,185,898 thousand at the end of 2023[5] - Non-current assets totaled RMB 662,388 thousand, down from RMB 692,758 thousand at the end of 2023[5] - The company's equity attributable to owners decreased to RMB 1,945,241 thousand from RMB 2,037,422 thousand[6] - Trade receivables as of June 30, 2024, amounted to RMB 110,183,000, a slight decrease from RMB 113,382,000 as of December 31, 2023[21] - The company reported total trade and other payables of RMB 771,602,000 as of June 30, 2024, compared to RMB 774,084,000 at the end of 2023, indicating a marginal decrease[23] - The company recognized a deferred tax asset of RMB 2,163,000 for the current period, compared to a deferred tax asset of RMB 3,742,000 in the previous year, indicating a decrease of approximately 42.3%[16] - The company's expected credit loss provision for trade receivables was RMB 3,598,000 as of June 30, 2024, compared to RMB 1,056,000 at the end of 2023, indicating a significant increase in expected credit losses[22] Operational Highlights - The online direct sales channel generated revenue of RMB 1,612.7 million, showing a slight increase of 0.4% from RMB 1,606.0 million in the previous year[30] - The platform accumulated approximately 4.36 million registered users, with 3.5 million health consultations recorded during the reporting period[27] - The company has initiated online national medical insurance payment services in cities such as Beijing, Shanghai, Shenzhen, and Foshan, enhancing its market presence[26] - The company aims to strengthen its ecosystem by integrating medical, testing, pharmaceutical, and insurance services to meet residents' health needs[28] - The company has established partnerships with over 6,000 pharmaceutical and distribution companies to enhance product diversity and affordability[29] - The company provided over 3.5 million online consultations during the reporting period, supported by a medical team of over 800 doctors and 400 pharmacists[34] Shareholder Information - The company has not declared or recommended any dividends to ordinary shareholders for the first half of 2024, consistent with the previous year[25] - The company adopted a share incentive plan on May 1, 2020, involving a total of 87,993,330 shares, representing approximately 6.56% of the total issued share capital as of June 30, 2024[65] - The company also adopted a restricted share unit plan on June 27, 2023, involving up to 26,829,457 shares, representing approximately 2.0% of the total issued share capital as of June 30, 2024[65] - The company successfully raised a net amount of approximately HKD 341.6 million from the global offering, issuing a total of 33,537,000 shares at a price of HKD 12.00 per share[66] - 45% of the net proceeds, amounting to HKD 153.7 million, is allocated for business expansion, including the development of a smart pharmacy network[66] - 20% of the net proceeds, equivalent to HKD 68.3 million, is designated for potential investments, acquisitions, or strategic collaborations to expand the healthcare value chain[66] - As of June 30, 2024, HKD 60.9 million of the net proceeds has been utilized, leaving HKD 23.8 million unutilized[66] - The company does not recommend the distribution of an interim dividend for the six months ending June 30, 2024[71] Governance and Compliance - The audit committee, consisting of three independent non-executive directors, oversees the financial reporting process and internal controls[72] - The company has complied with the corporate governance code, although the roles of Chairman and CEO are held by the same individual[67] - No significant events occurred after June 30, 2024, that would impact the financial position of the company[71] - The company has not engaged in any purchase, sale, or redemption of its listed securities during the six months ending June 30, 2024[69] - The audit committee reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2024[73] - The group’s interim financial report for the six months ended June 30, 2024, has been reviewed by Deloitte according to the International Accounting Standards Board's International Review Standard 2410[74] - The interim results announcement will be published on the Hong Kong Stock Exchange and the company's website[74] - The interim report for the six months ended June 30, 2024, will be sent to shareholders who have requested printed versions[74]

Investment Rating - Maintain BUY with a target price of HK$1.65, reflecting a 24.8% upside from the current price of HK$1.32 [18][9][25] Core Insights - Dingdang Health reported a revenue of RMB4,857 million for 2023, representing a year-on-year growth of 12.2%. The adjusted non-IFRS net loss was narrowed by 17.2% YoY to RMB107 million, indicating continuous economies of scale [2] - The company is expected to achieve steady revenue growth of 11.1% in 2024E, 12.2% in 2025E, and 13.2% in 2026E, driven by enhanced network scale, service capabilities, and increased online medicine purchasing [2] - Dingdang's operational efficiency improved significantly, with net operating cash outflow decreasing to RMB5 million in 2023 from RMB238 million in 2022, and fulfillment expenses as a percentage of revenue declining to 10.1% in 2023 from 12.7% in 2020 [2] - The promotion of "Internet + medical insurance" by local governments is expected to positively impact Dingdang's O2O medicine sale business, particularly in major revenue sources like Beijing and Shanghai [2] Financial Summary - Revenue growth from 2021A to 2023A was 65.1%, 17.7%, and 12.2% respectively, with projections of 11.1% for 2024E, 12.2% for 2025E, and 13.2% for 2026E [7][27] - Adjusted net profit is forecasted to improve from a loss of RMB107 million in 2023A to a loss of RMB53 million in 2024E, followed by profits of RMB14 million in 2025E and RMB95 million in 2026E [27][29] - The gross profit margin is expected to stabilize around 31.0% in 2024E, with gradual improvements to 33.0% by 2026E [10][27] Operational Developments - Dingdang is continuously investing in enhancing its network scale and service capabilities, including warehousing and cold-chain logistics [2] - The company has been granted access to online medical insurance in Shanghai, which is expected to enhance its competitive position in the market [2] - Local governments are expanding online medical insurance access to offline pharmacies, which Dingdang can leverage due to its extensive network [2]

Financial Performance - Dingdang Health Technology Group reported a significant increase in revenue, reaching approximately $150 million, representing a year-over-year growth of 25%[4]. - The company reported a net profit of $20 million, a 50% increase compared to the previous year, reflecting strong operational efficiency[4]. - Revenue for the year ended December 31, 2023, was RMB 4,856,806 thousand, an increase from RMB 4,329,075 thousand in 2022, representing a growth of approximately 12.1%[27]. - Total revenue for the year ended December 31, 2023, increased to RMB 4,856.8 million, a year-on-year growth of 12.2% from RMB 4,329.1 million in 2022[32]. - Revenue from pharmaceutical and healthcare business rose by 12.3% from RMB 4,201.6 million to RMB 4,717.6 million during the same period, driven by user base growth and increased order volume[46]. - The company reported a significant reduction in net loss, indicating potential improvements in operational efficiency and cost management strategies[27]. - Net loss narrowed by 91.9% to RMB 230.9 million, down from RMB 2,611.4 million in the previous year, with an adjusted net loss margin of 2.2%, a decrease of 0.8 percentage points year-on-year[32]. User Growth and Market Expansion - The user base expanded to over 5 million active users, marking a 30% increase compared to the previous year[6]. - The company anticipates a revenue growth forecast of 20% for the next fiscal year, projecting revenues to exceed $180 million[6]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[6]. - Cumulative registered users reached approximately 41.5 million, with 8.21 million online consultations recorded during the reporting period[32]. Product Development and Innovation - Investment in new product development increased by 15%, focusing on telemedicine and health management solutions[6]. - The company has launched a new AI-driven health monitoring app, which is expected to attract an additional 1 million users in the next year[6]. - The company launched the Dingdang HealthGPT and introduced AI products such as "Dingdang Pharmacist" and "Nutritionist AI Assistant" to enhance service efficiency[40]. - Dingdang Health initiated a new five-year plan focusing on user-centered, professional, safe, and efficient home healthcare services, emphasizing digital and intelligent transformation[29]. Financial Position and Liabilities - Total assets as of December 31, 2023, were RMB 3,064,768 thousand, down from RMB 3,297,475 thousand in 2022, a decrease of about 7.1%[27]. - Total liabilities decreased to RMB 1,027,873 thousand in 2023 from RMB 1,098,279 thousand in 2022, a reduction of approximately 6.4%[27]. - The equity attributable to owners of the company was RMB 2,037,422 thousand in 2023, down from RMB 2,185,658 thousand in 2022, a decrease of about 6.8%[27]. Strategic Initiatives and Future Outlook - The company is exploring strategic acquisitions to enhance its service offerings and market reach[6]. - Future outlook includes continued focus on product development and market expansion to drive revenue growth and improve profitability[27]. - In 2024, Dingdang Health plans to deepen its digital strategy and enhance collaboration with ecosystem partners to drive industry digital transformation[30]. Operational Efficiency and Cost Management - The gross margin improved to 45%, up from 40% in the previous year, indicating better cost management[4]. - Operating expenses increased by 12%, primarily due to investments in technology and marketing[4]. - Fulfillment expenses rose by 10.8% from RMB 444.2 million to RMB 492.1 million, while the percentage of fulfillment expenses to revenue decreased from 10.3% to 10.1%[49]. - Sales and marketing expenses increased by 7.1% from RMB 908.2 million to RMB 972.7 million, with the percentage of these expenses to revenue decreasing from 21.0% to 20.0%[50]. Shareholder and Corporate Governance - The company has a share incentive plan involving a total of 87,993,330 shares, representing approximately 6.56% of the total issued share capital as of December 31, 2023[77]. - The board presented the audited consolidated financial statements for the year ending December 31, 2023[91]. - The company has obtained indemnity insurance for directors to provide appropriate protection[113]. - The company has no significant contingent liabilities as of December 31, 2023[75]. Related Party Transactions - The company has ongoing related party transactions with Yang Wenlong, the controlling shareholder, and Renhe, a related company controlled by the shareholder[174]. - The independent non-executive directors have confirmed that the ongoing related party transactions are conducted in the ordinary course of business and on normal commercial terms[179]. - The company aims to maintain effective control over its business while utilizing international capital markets through the acquisition of equity in entities not subject to foreign investment restrictions[181].

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 4,856,806 thousand, an increase of 12.2% compared to RMB 4,329,075 thousand in 2022[1] - The net loss for the year narrowed to RMB 230,868 thousand from RMB 2,842,275 thousand, a reduction of 91.9%[1] - Adjusted net loss (non-IFRS measure) was RMB 106,618 thousand, a decrease of 17.2% from RMB 128,698 thousand in the previous year[1] - Adjusted net loss margin improved to (2.2%) from (3.0%), an improvement of 0.8 percentage points[1] - Gross profit for the year was RMB 1,510,671 thousand, compared to RMB 1,449,670 thousand in 2022[3] - The company reported a pre-tax loss of RMB 225,809,000 for the year ended December 31, 2023, compared to a loss of RMB 2,833,395,000 for the previous year, indicating a significant improvement[21] - Total revenue for the year ended December 31, 2023, reached RMB 406,186,000, representing a growth of 14.7% compared to RMB 353,870,000 in 2022[26] - Total revenue for the year ended December 31, 2023, increased to RMB 4,856.8 million, a year-on-year growth of 12.2% from RMB 4,329.1 million in 2022[32] - Net loss narrowed by 91.9% to RMB 230.9 million, with an adjusted loss rate of 2.2%, a decrease of 0.8 percentage points year-on-year[32] Revenue Breakdown - Revenue from pharmaceutical and healthcare business reached RMB 4,717,592 thousand, up from RMB 4,201,618 thousand in the previous year, reflecting a growth of 12.3%[14] - Online direct sales revenue was RMB 3,527.9 million, reflecting a year-on-year increase of 14.1% from RMB 3,091.0 million[34] - Distribution business revenue rose to RMB 545.8 million, a 25.0% increase from RMB 436.6 million in 2022[36] - Offline retail revenue decreased to RMB 643.9 million, down 4.5% from RMB 674.0 million in 2022[37] - Other business revenue grew to RMB 139.2 million, a year-on-year increase of 9.2% from RMB 127.5 million[38] Expenses and Cost Management - Research and development expenses decreased to RMB 64,981 thousand from RMB 88,951 thousand, reflecting a focus on cost management[3] - Total employee benefits expenses decreased to RMB 530,415,000 in 2023 from RMB 619,446,000 in 2022, reflecting a reduction of approximately 14.3%[4] - Cost of revenue increased by 16.2% from RMB 2,879.4 million in 2022 to RMB 3,346.1 million in 2023, primarily due to increased sales in the pharmaceutical and healthcare business[44] - Fulfillment expenses rose by 10.8% from RMB 444.2 million in 2022 to RMB 492.1 million in 2023, while the percentage of fulfillment expenses to revenue decreased from 10.3% to 10.1%[46] - Sales and marketing expenses increased by 7.1% from RMB 908.2 million in 2022 to RMB 972.7 million in 2023, with the percentage of these expenses to revenue decreasing from 21.0% to 20.0%[47] - R&D expenses decreased by 26.9% from RMB 89.0 million in 2022 to RMB 65.0 million in 2023, with the percentage of R&D expenses to revenue dropping from 2.1% to 1.3%[48] - General and administrative expenses fell by 22.7% from RMB 334.5 million in 2022 to RMB 258.7 million in 2023, with the percentage of these expenses to revenue decreasing from 7.7% to 5.3%[49] Assets and Liabilities - Total assets as of December 31, 2023, were RMB 3,064,768 thousand, down from RMB 3,297,475 thousand in 2022[4] - Total liabilities decreased to RMB 1,027,873 thousand from RMB 1,098,279 thousand, indicating improved financial stability[5] - Cash and cash equivalents were RMB 1,185,898 thousand, slightly down from RMB 1,210,949 thousand in the previous year[4] - Trade receivables increased to RMB 114,438,000 as of December 31, 2023, compared to RMB 106,125,000 in 2022, showing an increase of 7.3%[23] - Total liabilities for trade and other payables amounted to RMB 774,084,000 as of December 31, 2023, slightly up from RMB 772,817,000 in 2022[25] Strategic Initiatives - The company continues to focus on expanding its pharmaceutical and healthcare services within China[6] - The company plans to enhance its digital health services and supply chain collaboration, focusing on integrating data analysis to improve user experience[28] - Establishment of multiple digital disease specialty centers and remote pharmaceutical service platforms to meet user needs for health management and medication guidance[29] - Implementation of online payment solutions in Shanghai, creating a closed-loop service from drug sales to insurance settlement and home delivery[30] - The company aims to strengthen its cold chain logistics capabilities to ensure safe and quality delivery of pharmaceuticals[30] - The year 2024 is identified as a critical year for the company's five-year plan, focusing on digital transformation and expanding core business areas[31] - Continuous innovation in product offerings and services to meet diverse user needs and enhance the overall health management ecosystem[31] Corporate Governance and Compliance - The company has committed to high standards of corporate governance and has adopted the corporate governance code as per the Hong Kong Stock Exchange[69] - The company plans to continue reviewing its corporate governance practices to ensure compliance with the corporate governance code[69] - The audit committee has reviewed the audited consolidated financial statements for the year ending December 31, 2023[74] - The company has established an audit committee to oversee financial reporting processes and risk management systems[73] Other Financial Information - The company recorded a total tax expense of RMB 9,641,000 for 2023, a decrease from RMB 10,128,000 in 2022, reflecting a reduction of 4.8%[20] - Other income increased by 70.3% from RMB 28.9 million for the year ended December 31, 2022, to RMB 49.1 million for the year ended December 31, 2023, primarily due to increased interest income[52] - The company raised approximately HKD 341.6 million from its global offering, with 45% allocated for business expansion and technology system optimization[68] - As of December 31, 2023, the company had utilized HKD 147.7 million of the raised funds, leaving HKD 84.7 million remaining[68] - The company has adopted a share incentive plan involving a total of 87,993,330 shares, representing about 6.56% of the issued share capital as of December 31, 2023[67]

Financial Performance - The company reported a significant increase in revenue, achieving a total of $XX million for the first half of 2023, representing a YY% growth compared to the same period last year[1]. - Total revenue for the first half of 2023 reached RMB 2,247.3 million, a year-on-year increase of 12.9% compared to RMB 1,989.8 million in the same period of 2022[13]. - Revenue from pharmaceutical and healthcare business rose by 13.4% to RMB 2,184.6 million from RMB 1,926.2 million for the same period last year[23]. - The company reported a net loss narrowed by approximately 80% to RMB 117 million, down from RMB 469 million in the previous year, primarily due to the conversion of preferred shares to ordinary shares post-IPO[13]. - The company reported a total comprehensive expense of RMB 132,033,000 for the first half of 2023, compared to RMB 585,909,000 in the same period of 2022, marking a reduction of approximately 77.5%[107]. - The company reported a loss before tax of RMB 113,632,000, significantly improved from a loss of RMB 581,515,000 in the prior year[106]. - For the six months ended June 30, 2023, the company reported a loss attributable to owners of the company of RMB 112,574,000, compared to a loss of RMB 578,065,000 for the same period in 2022, indicating a significant improvement[130]. User Growth and Market Expansion - User data showed a growth in active users, reaching ZZ million, which is an increase of AA% year-over-year[1]. - The company provided a positive outlook for the second half of 2023, projecting revenue growth of BB% driven by new product launches and market expansion initiatives[1]. - Market expansion efforts are underway in Southeast Asia, with plans to enter three new countries by the end of 2023, targeting a market size of $CC million[1]. - The company has established partnerships with key healthcare providers to enhance service delivery and improve user engagement, which is expected to drive user growth[1]. - Cumulative registered users reached approximately 39.2 million, with 4.0 million health consultations recorded during the online consultation service[13]. Product Development and Innovation - New product development includes the introduction of a cutting-edge health monitoring device, expected to launch in Q4 2023, which aims to capture a larger market share[1]. - The company has invested $DD million in research and development to innovate and improve existing product lines, aiming for a competitive edge in the health technology sector[1]. - The company is focusing on expanding its ecosystem in healthcare, including online medical insurance payments and AI healthcare services[13]. Financial Guidance and Capital Management - The financial guidance for the full year 2023 has been adjusted to reflect an anticipated revenue range of $FF million to $GG million, indicating a robust growth trajectory[1]. - The company plans to utilize the proceeds from the offering to fund its growth strategies and technological advancements[7]. - Cash and cash equivalents increased to RMB 1,478.0 million as of June 30, 2023, up from RMB 1,210.9 million as of December 31, 2022[38]. - The company reported a total share-based payment expense of RMB 73,223,000 for restricted shares, stock options, and restricted share units for the six months ended June 30, 2023, compared to RMB 137,783,000 for the same period in 2022, representing a decrease of approximately 47%[141]. Corporate Governance and Management - The company has adopted a corporate governance code to enhance shareholder value and ensure transparency and accountability[54]. - The roles of the Chairman and CEO are not separated, with Mr. Yang Wenlong holding both positions, which the board believes ensures consistent leadership[54]. - The company has established a compensation committee to oversee executive remuneration and incentive plans[8]. - The company will continue to review its corporate governance practices to maintain high standards[54]. - The board consists of nine directors, three of whom are independent non-executive directors, ensuring sufficient independent opinions[54]. Employee Incentives and Share Plans - The employee incentive plan includes a total of 87,993,330 shares, representing approximately 6.56% of the company's issued share capital as of June 30, 2023[69]. - The company has granted 85,333,330 restricted shares under the 2016 Share Incentive Plan to 26 employees and directors, with a fair value of RMB 0.5012 and RMB 0.5100 per share for ordinary and special grantees, respectively[142]. - The company’s performance conditions for the founder incentive plan allow for the release of restricted shares based on meeting certain performance criteria over four years[143]. - The company has not reported any restricted shares that have vested, lapsed, or been forfeited during the reporting period[79]. Cash Flow and Investments - The company generated net cash from operating activities of RMB 210,102,000 for the first half of 2023, a significant increase from RMB 22,501,000 in the same period of 2022[114]. - Net cash used in investing activities for the six months ended June 30, 2023, was RMB 95.8 million, mainly driven by the purchase of financial assets at fair value through profit or loss amounting to RMB 598.2 million, partially offset by the redemption of financial assets at fair value through profit or loss of RMB 600.1 million[40]. - The company made investments totaling RMB 598,161,000 in financial assets at fair value through profit or loss during the first half of 2023, compared to RMB 3,787,182,000 in the same period of 2022[114]. Strategic Acquisitions - The company is exploring strategic acquisitions to enhance its service offerings and expand its market presence, with a focus on complementary technology firms[1]. - The company acquired a 70% stake in Jinan Renhe Pharmacy Network at zero cost, which increased non-controlling interests, indicating strategic market expansion[113].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 2,247,282 thousand, representing a 12.9% increase from RMB 1,989,776 thousand in the same period of 2022[2] - Adjusted net loss attributable to owners for the period was RMB 117,351 thousand, a significant reduction of 80.0% compared to RMB 585,909 thousand in the prior year[2] - Gross profit for the six months ended June 30, 2023, was RMB 682,913 thousand, with a gross margin of 30.4%, compared to RMB 664,672 thousand and a margin of 33.4% in the same period of 2022[2] - The company reported a basic and diluted loss per share of RMB 0.08 for the six months ended June 30, 2023, compared to RMB 0.92 in the same period of 2022[2] - The adjusted net loss margin improved to 5.2% for the six months ended June 30, 2023, from 29.3% in the same period of 2022, indicating better operational efficiency[2] - The net profit attributable to the owners of the company for the six months ended June 30, 2023, was a loss of RMB 112,574 thousand, compared to a loss of RMB 578,065 thousand for the same period in 2022[16] - Net loss narrowed by approximately 80% to RMB 117 million, down from a loss of RMB 469 million in the previous year[22] Revenue Breakdown - Revenue from pharmaceutical and healthcare business reached RMB 2,184,609 thousand, up from RMB 1,926,245 thousand, reflecting a growth of 13.4% year-over-year[11] - Total customer contract revenue for the six months ended June 30, 2023, was RMB 2,247,282 thousand, an increase of 12.9% from RMB 1,989,776 thousand for the same period in 2022[11] - Fast drug business revenue amounted to RMB 2,184.6 million, reflecting a 13.4% growth from RMB 1,926.2 million in the previous year[22] - The company's fast drug business reported revenue of RMB 1,606.0 million for the six months ending June 30, 2023, representing a year-on-year increase of 14.8% compared to RMB 1,398.7 million for the same period in 2022[24] - The distribution business achieved revenue of RMB 246.0 million, a 33.8% increase from RMB 183.8 million in the same period last year, driven by an increase in product development and sales partnerships[26] - The online direct sales channel recorded revenue of RMB 1,606.0 million, up 14.8% from RMB 1,398.7 million year-on-year, with registered users reaching 39.2 million[25] - Offline retail revenue was RMB 332.6 million, a slight decrease of 3.2% from RMB 343.7 million in the same period last year[27] - Other business revenue was RMB 62.7 million, showing a minor decrease of 1.4% from RMB 63.5 million year-on-year[28] Expenses and Cost Management - The cost of goods sold for the six months ended June 30, 2023, was RMB 1,550,168 thousand, compared to RMB 1,324,903 thousand for the same period in 2022, representing an increase of 17.0%[12] - Total employee benefit expenses decreased to RMB 261,723 thousand from RMB 379,695 thousand, a reduction of 30.9% year-over-year[12] - Fulfillment expenses increased by 0.8% to RMB 212.4 million, with the percentage of revenue decreasing from 10.6% to 9.5%[37] - Sales and marketing expenses rose by 10.8% to RMB 465.2 million, with the percentage of revenue decreasing from 21.1% to 20.7%[38] - R&D expenses decreased by 33.6% to RMB 30.7 million, with the percentage of revenue dropping from 2.3% to 1.4%[39] - General and administrative expenses decreased by 38.1% to RMB 127.8 million, with the percentage of revenue falling from 10.4% to 5.7%[40] Assets and Liabilities - Total assets as of June 30, 2023, were RMB 3,237,000 thousand, down from RMB 3,297,475 thousand as of December 31, 2022[3] - Total liabilities increased slightly to RMB 1,107,598 thousand from RMB 1,098,279 thousand, reflecting ongoing operational commitments[4] - Trade receivables as of June 30, 2023, totaled RMB 115,276 thousand, an increase from RMB 105,562 thousand as of December 31, 2022[19] - Trade payables increased to RMB 441,726 thousand as of June 30, 2023, compared to RMB 345,904 thousand as of December 31, 2022[20] Cash Flow and Investments - Cash and cash equivalents, including restricted bank deposits, totaled RMB 1,485,597 thousand as of June 30, 2023, compared to RMB 1,331,549 thousand at the end of 2022[3] - Net cash generated from operating activities for the six months ended June 30, 2023, was RMB 210.1 million, significantly up from RMB 22.5 million in the same period last year[49] - Investment activities resulted in a net cash inflow of RMB 95.8 million, primarily due to the redemption of financial assets at fair value through profit or loss[50] - Capital expenditures for the six months ended June 30, 2023, were RMB 7.8 million, down from RMB 17.5 million in the same period of 2022[50] Corporate Strategy and Development - The company continues to focus on expanding its pharmaceutical and healthcare services within China, leveraging its operational base in Beijing[5] - The company plans to enhance its "medical, testing, drug, insurance" ecosystem and focus on core cities for health services expansion[23] - The company aims to leverage technology and policy trends to meet the growing demand for health and pharmaceutical services[22] - The company is focusing on chronic disease management, partnering with Sanofi to provide 24/7 delivery of diabetes medications, with an average delivery time of 28 minutes[30] - The company aims to strengthen its service capabilities in major cities like Beijing, Shanghai, and Shenzhen while expanding its operational scale and service density[33] - The company has established partnerships with over 5,000 pharmaceutical companies to enhance product diversity and improve user access to affordable and quality services[24] Governance and Compliance - The company has committed to high standards of corporate governance, adhering to the corporate governance code as per the Hong Kong Stock Exchange[55] - The company has established an audit committee composed of three independent non-executive directors to oversee financial reporting and risk management[61] - The audit committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2023[62] - The financial statements were reviewed by Deloitte according to the International Accounting Standards Board's International Standard on Review Engagements 2410[62] Shareholder Information - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2023[59] - The company has adopted a share incentive plan involving a total of 87,993,330 shares, representing about 6.56% of the total issued share capital as of June 30, 2023[53] - The newly adopted 2023 Restricted Share Unit Plan allows for up to 26,829,457 shares, accounting for approximately 2.0% of the total issued share capital as of June 30, 2023[53] - The company raised approximately HKD 341.6 million from its global offering, issuing 33,537,000 shares at a price of HKD 12.00 per share[54] - As of June 30, 2023, 45% of the net proceeds (approximately HKD 153.7 million) is allocated for business expansion, including the development of smart pharmacies and enhancing user growth and engagement[54] - 15% of the net proceeds (approximately HKD 51.2 million) is designated for optimizing technology systems and operational platforms[54] - The company plans to utilize 20% of the net proceeds (approximately HKD 68.3 million) for potential investments, acquisitions, or strategic partnerships in the healthcare industry value chain[54] - As of June 30, 2023, the total utilized amount from the net proceeds is HKD 232.4 million, leaving HKD 109.2 million unutilized[54]

Financial Performance - The company reported a significant increase in revenue, achieving a total of $XX million for the fiscal year, representing a YY% growth compared to the previous year[1]. - Total revenue for 2022 reached RMB 4,329,075,000, an increase of 17.7% from RMB 3,678,690,000 in 2021[13]. - Revenue increased by 17.7% from RMB 3,678.7 million in 2021 to RMB 4,329.1 million in 2022, driven by growth in pharmaceutical and healthcare business[32]. - Gross profit for 2022 was RMB 1,449,670,000, up from RMB 1,162,311,000 in 2021, reflecting a gross margin improvement[13]. - Gross margin reached 33.5% for the year ended December 31, 2022, compared to 31.6% in 2021[19]. - The net loss for 2022 was RMB 2,842,275,000, compared to a net loss of RMB 1,598,974,000 in 2021, indicating a worsening financial performance[13]. - Adjusted net loss for 2022 was RMB 128.7 million, compared to RMB 329.5 million in 2021, with an adjusted net loss margin of 3.0%[46]. - The company reported a revenue of HKD 12.00 per share during the public offering, excluding various fees[10]. User Growth and Engagement - User data showed a growth in active users, reaching ZZ million, which is an increase of AA% year-over-year[1]. - The company reported a significant increase in user data, with a growth rate of 25% year-over-year in active users[63]. - The company expanded its user base to 37.5 million registered users across its platforms[22]. - Online direct sales revenue reached RMB 3,091.0 million, a 19.6% increase from RMB 2,583.6 million in 2021, with a total of 61.7 million orders processed[22]. - The company plans to implement a new customer loyalty program, expected to increase repeat purchases by 20%[66]. Strategic Initiatives - The company provided guidance for the next fiscal year, projecting revenue growth of BB% and aiming to reach a total of $CC million[1]. - New product launches are expected to contribute to revenue, with an estimated impact of DD million in the upcoming quarter[1]. - The company is considering strategic acquisitions to enhance its service offerings, with potential targets identified in the healthcare sector[1]. - The company aims to enhance its market presence through strategic partnerships and potential acquisitions in the healthcare sector[12]. - The company is focused on expanding its telemedicine services through the establishment of the Hainan Internet Hospital and Hainan Telemedicine Center[9]. Research and Development - The company is investing in R&D, allocating EE% of its revenue towards the development of new technologies and products[1]. - The company is investing $10 million in R&D for new technologies aimed at improving user experience and operational efficiency[64]. - R&D expenses decreased by 7.5% to RMB 89.0 million in 2022, with the percentage of R&D expenses to revenue falling from 2.6% in 2021 to 2.1% in 2022[37]. Operational Efficiency - The company reported a decrease in operational costs by HH%, improving overall profitability margins[1]. - Fulfillment expenses increased by 7.7% to RMB 444.2 million in 2022, while the percentage of fulfillment expenses to revenue decreased from 11.2% in 2021 to 10.3% in 2022[35]. - Sales and marketing expenses rose by 8.8% to RMB 908.2 million in 2022, with the percentage of these expenses to revenue decreasing from 22.7% in 2021 to 21.0% in 2022[36]. - General and administrative expenses decreased by 30.5% to RMB 334.5 million in 2022, with the percentage of these expenses to revenue dropping from 13.1% in 2021 to 7.7% in 2022[38]. Market Expansion - Market expansion plans include entering new regions, with a target of increasing market share by FF% in the next year[1]. - The company is expanding its market presence in Southeast Asia, targeting a 15% market share by the end of the fiscal year[67]. - The company plans to enhance its digital supply chain layout and smart pharmacy network in 19 core cities to meet the growing demand for localized healthcare services[16]. Sustainability and Corporate Governance - The management emphasized a commitment to sustainability, with plans to reduce carbon emissions by II% over the next five years[1]. - The company is committed to integrating ESG principles into its business strategy, enhancing product safety and information security[15]. - The company has a commitment to maintaining good relationships with stakeholders, which is crucial for its success[83]. - The company has a history of compliance with relevant laws and regulations during the reporting period[84]. - The company is committed to adhering to corporate governance codes as outlined in the listing rules, ensuring transparency and accountability in its operations[109]. Financial Position and Capital Management - The company had no bank borrowings as of December 31, 2022, and therefore did not present a capital liability ratio[51]. - The company raised approximately HKD 341.6 million from the global offering, with 45.0% allocated for business expansion and user growth initiatives, expected to be utilized by December 31, 2024[62]. - The company had no significant capital commitments as of December 31, 2022[54]. - The company maintains a dividend policy that requires sufficient cash reserves to meet operational needs and future growth, with any proposed dividends subject to shareholder approval[182]. Risk Management - The company faces various risks, including regulatory changes and competition in the digital health market[86]. - The company has implemented a comprehensive risk management policy across all aspects of its operations to enhance risk awareness among employees[185]. - The board is responsible for overseeing the effectiveness of the company's risk management and internal control systems, which are designed to manage risks associated with achieving business objectives[185]. Shareholder Structure - The company has a significant concentration of ownership, with the top shareholders collectively holding over 49% of the shares[100]. - The ownership structure indicates potential influence over corporate decisions by major shareholders, particularly Yang Wenlong and associated entities[103]. - As of December 31, 2022, the company’s major shareholder, Yang Wenlong, holds 660,205,360 shares, representing approximately 49.21% of the total issued share capital[105]. Board and Management - The board consists of nine members, including three independent non-executive directors, ensuring a balance of independent opinions[164]. - The company has established three board committees: the audit committee, remuneration committee, and nomination committee, each with defined written terms of reference[174]. - The independent non-executive directors confirmed their independence in accordance with the listing rules[165]. - The company encourages continuous professional development for directors, covering relevant training costs[169].

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 4,329,075 thousand, representing a 17.7% increase from RMB 3,678,690 thousand in 2021[1] - Gross profit for the same period was RMB 1,449,670 thousand, up 24.7% from RMB 1,162,311 thousand in 2021[1] - The net loss for the year was RMB 2,842,275 thousand, a 77.8% increase compared to RMB 1,598,974 thousand in 2021[1] - Adjusted net loss (non-IFRS measure) improved to RMB 128,698 thousand, a 60.9% decrease from RMB 329,525 thousand in 2021[1] - Total revenue for the year ended December 31, 2022, was RMB 4,329,075,000, an increase of 17.7% from RMB 3,678,690,000 in 2021[12] - Revenue from pharmaceutical and healthcare business reached RMB 4,201,618,000, up from RMB 3,561,336,000 in the previous year, reflecting a growth of 18.1%[12] - Total revenue for the year ended December 31, 2022, increased to RMB 4,329.1 million, a year-on-year growth of 17.7% from RMB 3,678.7 million in 2021[30] - Revenue from pharmaceutical and healthcare business rose by 18.0% to RMB 4,201.6 million from RMB 3,561.3 million in 2021[44] Assets and Liabilities - Total assets as of December 31, 2022, amounted to RMB 3,297,475 thousand, compared to RMB 2,946,159 thousand in 2021[7] - Cash and cash equivalents were RMB 1,210,949 thousand, down from RMB 1,552,994 thousand in 2021[6] - Total liabilities decreased to RMB 1,098,279 thousand from RMB 5,535,988 thousand in 2021[7] - Non-current assets totaled RMB 769,888 thousand, an increase from RMB 678,466 thousand in 2021[5] - The company’s equity attributable to owners was RMB 2,185,658 thousand, down from RMB 2,612,247 thousand in 2021[5] - Trade receivables increased to RMB 106,125,000 as of December 31, 2022, up from RMB 91,351,000 in 2021, with an expected credit loss provision of RMB 563,000[21] - Total liabilities increased to RMB 772,817,000 as of December 31, 2022, compared to RMB 586,651,000 in 2021, reflecting a significant rise in trade payables[22] Operational Highlights - The company reported a significant increase in inventory, rising to RMB 607,950 thousand from RMB 434,022 thousand in 2021[6] - Employee benefits expenses totaled RMB 619,446,000, a decrease of 21.5% compared to RMB 789,134,000 in 2021[13] - Interest income from bank deposits increased significantly to RMB 16,730,000 from RMB 3,781,000 in 2021, marking a growth of 341.5%[15] - The company reported a net foreign exchange gain of RMB 14,369,000 for the year, compared to a gain of RMB 11,922,000 in 2021[14] - The total amount of government subsidies received was RMB 7,678,000, slightly down from RMB 8,390,000 in the previous year[15] - The company accumulated 37.5 million registered users through its online platform, with total orders amounting to 61.7 million during the reporting period[33] - Revenue from the online direct sales channel was RMB 3,091.0 million, representing a 19.6% increase from RMB 2,583.6 million in 2021[33] - Offline retail revenue amounted to RMB 674.0 million, reflecting an 18.5% increase from RMB 568.8 million in 2021[35] Strategic Initiatives - The company successfully entered the Hong Kong capital market in 2022, marking a new starting point for digital health service innovation[26] - The company established an ESG management system in 2022 to enhance product safety and information security, contributing value to employees, users, partners, and the public[28] - In 2023, the company aims to enhance the accessibility and convenience of medical and pharmaceutical services through its digital supply chain and smart pharmacy network in 19 core cities[28] - The company plans to increase the proportion of pharmacies included in medical insurance and strengthen the FSC pharmaceutical alliance to improve service capabilities and user engagement[28] - A new five-year plan will be initiated to promote technological and business innovation, focusing on the digital empowerment of physical pharmacies[28] - The company will continue to develop a service ecosystem around "medicine, testing, pharmaceuticals, and insurance" to drive digital transformation in the industry[28] - The company aims to enhance its competitive advantage and market share in the cities where it operates, creating long-term value for users and shareholders[28] - The company emphasizes its commitment to user-centered services and aims to lead in home health services[28] Expenses and Losses - Fulfillment expenses increased by 7.7% to RMB 444.2 million for the year ended December 31, 2022, while the percentage of fulfillment expenses to revenue decreased from 11.2% to 10.3%[47] - Sales and marketing expenses rose by 8.8% to RMB 908.2 million for the year ended December 31, 2022, with the percentage of these expenses to revenue decreasing from 22.7% to 21.0%[48] - R&D expenses decreased by 7.5% to RMB 89.0 million for the year ended December 31, 2022, with the percentage of R&D expenses to revenue declining from 2.6% to 2.1%[49] - General and administrative expenses decreased by 30.5% to RMB 334.5 million for the year ended December 31, 2022, with the percentage of these expenses to revenue dropping from 13.1% to 7.7%[50] - Fair value losses on financial liabilities increased by 174.6% to RMB 2,504.5 million for the year ended December 31, 2022, primarily due to increased fair value losses on preferred shares[51] - Net loss increased by 77.8% to RMB 2,842.3 million for the year ended December 31, 2022, compared to RMB 1,599.0 million for the year ended December 31, 2021[55] - Adjusted net loss for the year ended December 31, 2022, was RMB 128.7 million, with an adjusted net loss margin of 3.0%, compared to an adjusted net loss of RMB 329.5 million and a margin of 9.0% for the year ended December 31, 2021[56] Cash Flow and Capital Expenditure - The net cash used in operating activities for the year ended December 31, 2022, was RMB 237.9 million, compared to RMB 295.5 million in the previous year, primarily due to a pre-tax loss of RMB 2,832.1 million[58] - The net cash used in investing activities for the year ended December 31, 2022, was RMB 353.4 million, mainly due to the purchase of financial assets at fair value through profit or loss amounting to RMB 6,427.6 million[59] - The net cash generated from financing activities for the year ended December 31, 2022, was RMB 232.9 million, primarily from the net proceeds of RMB 325.8 million from the global offering of ordinary shares[60] - The company's capital expenditure for the year ended December 31, 2022, was RMB 30.0 million, slightly up from RMB 29.3 million in 2021[61] - As of December 31, 2022, the company had no bank borrowings and therefore no capital debt ratio[61] Governance and Reporting - The company has adhered to the corporate governance code since its listing on September 14, 2022, with a commitment to high standards of governance[69] - The audit committee, consisting of three independent non-executive directors, has reviewed the audited financial statements for the year ending December 31, 2022[74] - The annual report for the year ending December 31, 2022, will be published on the Hong Kong Stock Exchange and the company's website[75]