Core Viewpoint - The pharmaceutical sector in China is experiencing significant growth, driven by favorable government policies and increasing international market share, with a notable rise in innovative drug development and exports [1][2]. Group 1: Market Performance - On May 23, 2025, pharmaceutical stocks collectively surged, with sectors like Helicobacter pylori, AI healthcare concepts, and weight-loss drugs rising over 2% [1]. - Hai Chen Pharmaceutical's stock hit a 20% limit up within three minutes of opening, reaching a new high in two and a half years [1]. - Heng Rui Pharmaceutical officially listed on the Hong Kong stock market, with its stock price increasing by approximately 30% post-opening, raising about 9.9 billion HKD through an IPO of 224.5 million shares, marking the largest IPO in the Hong Kong pharmaceutical sector in five years [1]. Group 2: Export and Innovation - In Q1 2025, China's pharmaceutical and healthcare product exports reached 26.632 billion USD, a year-on-year increase of 4.39%, while imports decreased by 4.42% to 20.456 billion USD, indicating a domestic industry upgrade and import substitution effect [1][2]. - The United States remains the largest single market for Chinese pharmaceutical exports, with exports amounting to 4.639 billion USD, a 9.6% increase, primarily driven by raw materials and disposable medical supplies [2]. - By the end of 2024, the number of active innovative drugs developed by Chinese companies reached 3,575, ranking first globally, with domestic products accounting for 42% of newly approved innovative drugs, up from less than 10% in 2015 [2]. Group 3: Future Outlook - Analysts predict that 2025 will be a pivotal year for the pharmaceutical industry in China, marking the beginning of significant revenue growth, profitability for many companies, and an extended valuation cycle due to improvements in payment systems [2].

Group 1 - The core theme of the event organized by Dingdang Kuaiyao and the Beijing Political and Legal Health Culture Union is to raise awareness about women's health during menopause, titled "Guarding Health Across Ages, Embracing New Life" [1] - Dingdang Kuaiyao launched the "Menopause Health Guardian Plan," which aims to provide a comprehensive support system through cognitive reconstruction, method empowerment, and psychological support for women navigating menopause [1] - The event featured Professor Chen Rong from Peking Union Medical College Hospital, who shared medical strategies for managing menopause, and well-known host Li Jing, who discussed her personal experiences, sparking broader societal attention on women's health issues [1] Group 2 - Dingdang Kuaiyao's app introduced a menopause care section that includes educational content, self-assessment tools, one-on-one consultations, a gynecological clinic map, and doctor consultations, aiming to enhance public awareness of menopause health [3] - Medical data indicates that menopause is a natural phase in women's lives, often accompanied by symptoms such as hot flashes, night sweats, insomnia, and emotional fluctuations, which can impact overall health and quality of life [3] - The company emphasizes the importance of supporting women during menopause, recognizing their dual roles in society and family, and aims to provide continuous health services to address the challenges they face [3]

Core Insights - Dingtang Health reported a revenue of 4.669 billion yuan for the fiscal year 2024, with a record gross profit of 1.538 billion yuan and a gross margin of 32.9%, reflecting a year-on-year increase of 1.8 percentage points [1] - The company successfully narrowed its adjusted losses by 32% through supply chain optimization, digital operations, and cost control, demonstrating strategic resilience amid industry changes [1][2] Strategic Layout - In 2024, Dingtang Health aims to build an integrated ecosystem focusing on "medical, testing, pharmaceuticals, and insurance," while continuously enhancing AI technology to improve efficiency across the entire supply chain [3] - The deepening of digital operations has led to improved inventory accuracy during peak seasons, reduced labor costs, and enhanced operational decision-making capabilities [3] - The company has successfully implemented a "medication online ordering and delivery + online medical insurance payment" model in key cities like Beijing, Shanghai, Shenzhen, and Foshan, which is expected to activate existing users and generate new business opportunities [3] Ecosystem Development - Dingtang Health is strengthening ecological cooperation and industry barriers by collaborating with over 7,000 well-known pharmaceutical companies and distributors to enhance its pharmaceutical health supply chain [4] - The company provides convenient cold chain delivery services for diabetes patients and those with special medication needs in Shenzhen and Beijing, maintaining an integrated online and offline service model [4] Future Outlook - Company representatives stated that the next steps involve optimizing structure, focusing on growth in core cities, and enhancing the warehousing and distribution system to offer users a more professional, convenient, diverse, and intelligent service experience [5] - Dingtang Health aims to become the "smart health service gateway" and "intelligent professional pharmaceutical health service provider" in the AI+ era [5]

港股互联网医疗股盘中回暖，京东健康(06618.HK)涨超3%，阿里健康(00241.HK)涨超2.5%，平安好医 生(01833.HK)、叮当健康(09886.HK)均涨1.5%。 ...

Financial Performance - The company reported a revenue increase of 15% year-over-year, reaching $500 million in the last quarter[6]. - Revenue for 2024 was RMB 4,669,078 thousand, a decrease of 3.9% compared to RMB 4,856,806 thousand in 2023[15]. - Total revenue for the fiscal year 2024 was RMB 4,669.1 million, a decrease of 3.9% compared to RMB 4,856.8 million in 2023, primarily due to a slowdown in overall market demand and intensified competition in certain regions[22]. - Online direct sales revenue reached RMB 3,274.6 million, down 7.2% from RMB 3,527.9 million in 2023, attributed to increased industry competition and lower-than-expected revenue during epidemic peaks[25]. - Business distribution revenue increased by 17.8% to RMB 642.8 million, up from RMB 545.8 million in 2023, driven by an increase in product development and sales partnerships[26]. - Offline retail revenue was RMB 622.2 million, a decrease of 3.4% from RMB 643.9 million in 2023[27]. - Other business revenue decreased by 7.0% to RMB 129.5 million, down from RMB 139.2 million in 2023[28]. - Gross profit for 2024 increased to RMB 1,538,349 thousand, up 1.8% from RMB 1,510,671 thousand in 2023[15]. - Net loss expanded by 64.6% to RMB 380.0 million, an increase of RMB 149.1 million year-on-year, mainly due to goodwill impairment losses of RMB 198.9 million and other intangible asset impairment losses of RMB 6.8 million[23]. User Growth and Engagement - User data showed a growth of 25% in active users, totaling 2 million users by the end of the quarter[6]. - The company reported a significant increase in user engagement metrics, although specific figures were not disclosed in the provided content[14]. - The company has accumulated over 46.3 million registered users through its online platform, enhancing its service and product sales capabilities[25]. Strategic Initiatives - The company provided a forward guidance of 10% revenue growth for the next quarter, projecting revenues of approximately $550 million[6]. - New product launches contributed to 30% of total revenue, with the latest product generating $150 million in sales[6]. - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience[6]. - Market expansion efforts have led to a 20% increase in market share in the Asia-Pacific region[6]. - The company plans to enter two new international markets by the end of the fiscal year, targeting a revenue contribution of $100 million from these markets[6]. - The company completed a strategic acquisition of a competitor for $200 million, expected to enhance its product offerings[6]. - The company is exploring potential mergers and acquisitions to further enhance its market position and service offerings[12]. - The company aims to enhance its service ecosystem by integrating "medical, testing, pharmacy, and insurance" services while expanding its operational scale in major cities like Beijing, Shanghai, and Shenzhen[34]. Sustainability and ESG Commitment - The management highlighted a focus on sustainability initiatives, aiming for a 40% reduction in carbon footprint by 2025[6]. - The company is committed to improving its ESG management system and enhancing product and information safety levels[19]. - The company is committed to fulfilling social responsibilities and promoting employee welfare, environmental protection, and community contributions[143]. Financial Management and Shareholder Value - The board approved a share buyback program worth $30 million to enhance shareholder value[6]. - The company has implemented an Employee Stock Ownership Plan (ESOP) to incentivize employees and align their interests with shareholders[12]. - The company adopted the Restricted Share Unit Plan on June 27, 2023, which includes provisions for participants based on applicable laws[10]. - The company has no significant contingent liabilities as of December 31, 2024[98]. - The company has no outstanding bank loans or other borrowings as of December 31, 2024[149]. Leadership and Management - Xu Ning appointed as executive director and vice president, overseeing daily operations since May 2021[109]. - Yu Lei has been with the company since March 2015, currently serving as CEO and COO, with a focus on operational management[110]. - Yu Qinglong has been the Chief Technology Officer since January 2015, responsible for overall technology development[112]. - Yang Yibin, co-founder and major shareholder, has been the general manager since September 2014, focusing on internet hospital and online consultation business development[113]. - The board of directors includes independent non-executive directors with significant experience in finance and investment management[124][125]. Market and Competitive Landscape - The company is focusing on optimizing resource allocation in core cities such as Beijing, Shanghai, and Shenzhen, while suspending operations in non-core cities like Chongqing and Nanjing[22]. - The company is enhancing its supply chain capabilities, including warehousing and cold chain logistics, to improve user service in specialized fields such as diabetes and dermatology[24]. - The company faces several risks, including competition, regulatory changes, and potential impairment of goodwill[148]. Shareholding Structure - As of December 31, 2024, the major shareholders collectively hold 660,205,360 shares, representing approximately 50.04% of the company's issued share capital[166]. - The shareholding structure indicates a significant concentration of ownership among the major shareholders, particularly Mr. Yang Wenlong and related entities[170]. - The company is subject to the Securities and Futures Ordinance, which governs the disclosure of interests in shares[171]. Employee and Compensation Plans - The company has established a compensation committee to determine the remuneration policy for directors and senior management based on their qualifications and tenure[176]. - The employee incentive plans adopted include pre-IPO share option plans and restricted share plans, aimed at motivating and rewarding board members, employees, and consultants[177]. - The total number of full-time employees is 2,363, with 1,472 in sales, marketing, and business development, and 402 in technology and R&D[99][100].

Core Insights - The article highlights the significant increase in demand for allergy medications in Beijing, particularly during the pollen allergy season, with a search volume increase of 83.35% and a sales volume increase of 80.27% for related medications [1][3]. Group 1: Company Initiatives - Dingtang Health, through its platform Dingtang Fast Medicine, has launched an "Allergy Index" tool that includes features such as allergy levels, an "allergy map," and self-assessment tools to educate users about allergies and help them manage their symptoms [1]. - The company has introduced an "Allergy Medication Zone" to facilitate quick access to allergy medications, along with professional consultation services from pharmacists and doctors [1]. Group 2: Market Demand and User Behavior - There is a notable demand for nighttime allergy medications, with nasal allergy medication orders being 1.8 times higher than those for eye allergy medications, indicating a specific need among users [3]. - The delivery service operates 24/7, providing timely access to medications for allergy sufferers, particularly during peak allergy seasons [3].

上市三年不盈利的叮当健康，又添了商誉减值新问题 上市近三年时间，叮当健康持续亏损。近日，叮当健康发布2024年度业绩报告。报告显示，2024年叮当 健康全年营收46.69亿元，同比减少3.87%；股东应占亏损3.76亿元，同比扩大66.73%。经历2022年股东应占亏 损28.33亿元的断崖式下滑，2023年叮当健康股东应占亏损有所收窄，但仍亏损2.26亿元，2024年叮当健康的 亏损趋势并未得到扭转。对于期内亏损增加，叮当健康方面表示，主要原因为考虑到公司若干子公司业绩表 现上的挑战，公司于2024财年计提分摊于相关子公司的商誉确认减值亏损约1.99亿元及其他无形资产确认减值 亏损680万元。 三年亏损近34.35亿元 叮当健康2024年实现总收入46.69亿元，同比减少3.9%。从增长趋势来看，自2021年之后，叮当健康的营 收增速便呈现下滑态势，到2024年甚至出现了负增长。 对于总收入减少，叮当健康方面表示，由于整体市场需求放缓，以及部分区域竞争加剧。在此情况下， 公司主动调整与优化部分非核心城市，暂停了包括重庆、南京、济南、福州等城市的智慧药房连锁经营，将 资源聚焦深耕优势区域，包括北京、上海、深圳 ...

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]