Financial Performance - Sales revenue for the first half of 2023 reached approximately RMB 2.962 billion, a year-on-year increase of 4.7%, but due to the depreciation of RMB against HKD by approximately 6.5%, the sales revenue in HKD terms was approximately HKD 3.333 billion, a year-on-year decrease of 2.1%[3] - Net profit for the first half of 2023 was approximately HKD 639 million, a year-on-year increase of 12%[3] - Revenue for the six months ended June 30, 2023, was HKD 3,333.16 million, a decrease of 2.1% compared to HKD 3,404.51 million in the same period last year[68] - Gross profit for the six months ended June 30, 2023, was HKD 1,944.75 million, a slight increase of 0.3% compared to HKD 1,939.45 million in the same period last year[68] - Operating profit for the six months ended June 30, 2023, was HKD 792.48 million, an increase of 4.8% compared to HKD 756.32 million in the same period last year[68] - Net profit attributable to equity holders of the company for the six months ended June 30, 2023, was HKD 638.61 million, an increase of 12.0% compared to HKD 570.06 million in the same period last year[70] - Basic earnings per share for the six months ended June 30, 2023, was HKD 0.2149, an increase of 12.8% compared to HKD 0.1906 in the same period last year[70] - Total assets as of June 30, 2023, were HKD 8,626.78 million, an increase of 4.1% compared to HKD 8,288.63 million as of December 31, 2022[71] - Net current assets as of June 30, 2023, were HKD 2,341.34 million, an increase of 6.1% compared to HKD 2,206.57 million as of December 31, 2022[71] - Total assets increased to HKD 6,681,527 thousand as of June 30, 2023, compared to HKD 6,545,824 thousand at the end of 2022[72] - Non-current liabilities rose to HKD 1,945,248 thousand, up from HKD 1,742,802 thousand at the end of 2022[72] - Operating cash flow for the six months ended June 30, 2023, was HKD 661,515 thousand, a significant increase from HKD 362,146 thousand in the same period last year[76] - Net cash generated from operating activities was HKD 463,601 thousand, compared to HKD 193,380 thousand in the previous year[76] - Investment activities used HKD 265,381 thousand in cash, slightly higher than HKD 245,941 thousand in the same period last year[76] - Cash and cash equivalents at the end of June 2023 stood at HKD 1,789,616 thousand, up from HKD 1,625,224 thousand at the end of June 2022[78] - Dividends paid to shareholders amounted to HKD 237,604 thousand, compared to HKD 209,073 thousand in the previous year[78] - The company repurchased and canceled shares worth HKD 13,672 thousand during the period[78] - Borrowings received during the period totaled HKD 688,129 thousand, down from HKD 1,808,986 thousand in the previous year[78] - The company's equity attributable to shareholders increased to HKD 6,350,612 thousand, up from HKD 6,213,600 thousand at the end of 2022[72] - Revenue from sales of pharmaceuticals decreased to HKD 3,225,011 thousand in 2023 from HKD 3,294,478 thousand in 2022, a decline of approximately 2.1%[85] - Revenue from medical materials increased slightly to HKD 89,097 thousand in 2023 from HKD 87,850 thousand in 2022, a growth of approximately 1.4%[85] - Total customer contract revenue under HKFRS 15 decreased to HKD 3,333,157 thousand in 2023 from HKD 3,404,396 thousand in 2022, a decline of approximately 2.1%[85] - Revenue from China (domestic) increased to HKD 3,013,522 thousand in 2023 from HKD 2,850,800 thousand in 2022, a growth of approximately 5.7%[85] - Revenue from other countries decreased significantly to HKD 319,635 thousand in 2023 from HKD 553,713 thousand in 2022, a decline of approximately 42.3%[85] - Operating profit for the intravenous infusion and other segment was HKD 806,104 thousand in 2023, compared to HKD 763,408 thousand in 2022, an increase of approximately 5.6%[87][91] - Operating profit for the medical materials segment was HKD 10,484 thousand in 2023, compared to HKD 10,316 thousand in 2022, a slight increase of approximately 1.6%[87][91] - Total profit before tax for the reportable segments was HKD 770,699 thousand in 2023, compared to HKD 749,219 thousand in 2022, an increase of approximately 2.9%[87][91] - Total profit for the reportable segments after tax was HKD 649,505 thousand in 2023, compared to HKD 611,476 thousand in 2022, an increase of approximately 6.2%[87][90] - Total assets for the reportable segments were HKD 10,966,512 thousand as of December 31, 2022, with the intravenous infusion and other segment accounting for HKD 10,355,222 thousand[92] - Total reportable segment assets amounted to 11,331,939 thousand HKD, with intravenous infusion and others contributing 10,685,003 thousand HKD[93] - Total reportable segment liabilities were 4,650,412 thousand HKD, with intravenous infusion and others accounting for 3,350,970 thousand HKD[93] - Net financial costs increased to 35,958 thousand HKD in 2023 from 13,187 thousand HKD in 2022[95] - Employee costs rose to 341,362 thousand HKD in 2023, up from 299,452 thousand HKD in 2022[96] - R&D expenses increased to 243,021 thousand HKD in 2023, with 104,273 thousand HKD capitalized as intangible assets[97] - Inventory costs decreased to 1,384,100 thousand HKD in 2023 from 1,474,961 thousand HKD in 2022[97] - Current tax expense for corporate income tax in China was 117,916 thousand HKD in 2023, down from 137,942 thousand HKD in 2022[98] - Basic earnings per share increased to 638,611 thousand HKD in 2023 from 570,056 thousand HKD in 2022[100] - Diluted earnings per share were calculated based on 2,985,285 thousand weighted average shares in 2023[101] - The weighted average number of ordinary shares (diluted) was 2,985,285 thousand in 2023, up from 2,990,288 thousand in 2022[102] - The company acquired property, plant, and equipment with a cost of HKD 442,789,000 and intangible assets with a cost of HKD 104,552,000 during the six months ended June 30, 2023[103] - The company sold plant and equipment with a book value of HKD 4,416,000, generating a gain of HKD 399,000 during the six months ended June 30, 2023[103] - The company's investment in Chenxin Pharmaceutical, an associate, was valued at HKD 399,200,000 as of June 30, 2023, representing a 6.10% equity interest[104][105] - The company received dividends of HKD 10,052,000 from Chenxin Pharmaceutical during the six months ended June 30, 2023[105] - The company's inventory increased to HKD 1,000,583,000 as of June 30, 2023, compared to HKD 810,656,000 as of December 31, 2022[106] - The company's trade receivables and bills decreased to HKD 1,990,902,000 as of June 30, 2023, compared to HKD 2,112,680,000 as of December 31, 2022[108] - The company's bank acceptance bills receivable decreased to HKD 139,075,000 as of June 30, 2023, compared to HKD 191,746,000 as of December 31, 2022[108] - The company's total borrowings increased to HKD 3,379,969,000 as of June 30, 2023, compared to HKD 3,207,648,000 as of December 31, 2022[110] - The company's trade payables and bills increased to HKD 494,157,000 as of June 30, 2023, compared to HKD 361,063,000 as of December 31, 2022[113] - The interim dividend for 2023 is HK207,903 thousand, compared to HK179,043 thousand in 2022[114] - The proposed final dividend for 2023 is HK237,604 thousand, compared to HK209,073 thousand in 2022[115] - The company repurchased 2,640,000 shares in the first half of 2023, with a total cost of HK36,193 thousand in 2022[116] - The fair value of financial assets measured at fair value through other comprehensive income (FVTOCI) was HK191,746 thousand as of December 31, 2022, classified under Level 2[122] - The company's capital commitments as of June 30, 2023, were HK524,849 thousand as of December 31, 2022[124] - Sales to Kelun Group in the first half of 2023 amounted to HK26,198 thousand in 2022[128] - Purchases from Kelun Group in the first half of 2023 amounted to HK91,845 thousand in 2022[128] - The trustee purchased 3,300,000 shares under the restricted share award plan after the reporting period, with a total cost of HK$14,933 thousand[129] Product Sales and Market Performance - Large infusion products achieved a cumulative sales volume of approximately 936 million bottles (bags), with sales revenue of HKD 2.069 billion, a year-on-year increase of 24.1% and 12.8% respectively[6] - Therapeutic infusion products achieved sales revenue of HKD 566 million, a year-on-year increase of 24.7%[6] - Ampoule product sales volume reached approximately 131 million units, a year-on-year increase of 92%[7] - Hydrobromide injection sales reached approximately HKD 180 million, a year-on-year increase of 4.6 times[7] - Ambroxol hydrochloride injection sales reached approximately HKD 14.67 million, a year-on-year increase of 98%[7] - Sales of Bidol capsules reached 22.56 million units, a year-on-year increase of approximately 302%[8] - Sales of Rosuvastatin Calcium Tablets reached 29.3 million units, a year-on-year increase of approximately 60%[8] - Sales of Azithromycin Dispersible Tablets reached 34.79 million units, a year-on-year increase of approximately 43%[8] - Export sales of infusion products reached 51.08 million bottles (bags), a year-on-year increase of approximately 17%, with export sales revenue of 80.08 million HKD, a year-on-year increase of approximately 25%[9] - Revenue from intravenous infusion products increased by 12.8% to HKD 2,069,115,000, driven by strong post-pandemic demand in China[21] - Non-PVC soft bag and upright soft bag infusion revenue increased by 16.3% to HKD 1,526,497,000, accounting for 73.8% of intravenous infusion revenue[21] - Revenue from oral formulations surged by 68.4% to HKD 244,391,000, supported by new products such as antiviral drug Abidol capsules[21] - Revenue from active pharmaceutical ingredients (API) decreased by 41.6% to HKD 453,626,000 due to weak market demand and price declines[21] - Revenue from ampoule injections declined by 11.2% to HKD 453,398,000, influenced by changes in product mix and centralized procurement sales[21] - Medical materials revenue slightly decreased by 0.5% to HKD 90,067,000[22] Research and Development - The company successfully bid for 5 products with 7 specifications in the 8th national drug centralized procurement, bringing the total number of products selected for national drug centralized procurement to 13 varieties with 18 specifications[5] - New products such as Lacosamide Injection, Peritoneal Dialysis Solution, and Terbutaline Sulfate Injection have gained market access in 30, 27, and 23 provinces respectively[5] - The company obtained 34 production approvals, including 8 for APIs and 26 for formulations, with several products being the first or second in China to receive approvals[11] - The company's innovative drug NP-01 for anti-tumor treatment showed positive progress in Phase I clinical trials, with expected completion of Phase I tolerance study by November 2023[12] - The company has 51 products with 67 specifications that have passed or are deemed to have passed consistency evaluations, enhancing market competitiveness[12] - The company applied for 49 patents and was granted 26, including 24 invention patents, bringing the total number of valid patents to 254, with 128 being invention patents[12] - R&D costs increased by 11.5% to HKD 138,748,000 in the first half of 2023, reflecting the company's focus on new product development in finished drugs, APIs, and medical materials[26][28] - Research and development costs for the six months ended June 30, 2023, were HKD 138.75 million, an increase of 11.5% compared to HKD 124.43 million in the same period last year[68] Corporate Governance and Shareholder Information - The company declared an interim dividend of HKD 0.07 per share, a year-on-year increase of 16.7%[3] - The company plans to focus on expanding the market share of high-value-added products and optimizing the production and sales structure in the second half of 2023[14] - The company is actively promoting the spin-off and listing of Bosheng Medical Materials on the Beijing Stock Exchange and seeking M&A opportunities in the pharmaceutical industry[15] - The company continues to focus on producing high-quality intravenous infusion products and launching new products in ampoule injections, APIs, oral formulations, and medical materials[22] - The company has established a dedicated team to handle centralized procurement and other forms of drug bidding to mitigate risks[17] - The company has obtained more product registrations that have passed or are deemed to have passed consistency evaluations, qualifying them for centralized procurement[17] - The company emphasizes environmental sustainability and green manufacturing, adhering to GMP standards and implementing low-energy and low-pollution measures[18] - Sales cost decreased by 5.2% to HKD 1,388,406,000 from HKD 1,465,066,000 in the first half of 2023, with direct materials, direct labor, and other costs accounting for 54.8%, 14.4%, and 30.8% of total sales cost respectively[23] - Gross profit margin increased by 1.3 percentage points to 58.3% in the first half of 2023, driven by a higher proportion of revenue from higher-margin finished drugs[24] - Other net income increased to HKD 45,301,000 in the first half of 2023, primarily due to government grants[25] - Operating profit increased by 4.8% to HKD 792,484,000 in the first half of 2023, with operating profit margin improving to 23.8% from 22.2%[29] - Net finance costs increased by 172.7% to HKD 35,958,000 in the first half of 2023 due to higher average bank borrowing rates[30] - Income tax expense decreased by 12.0% to HKD 121,194,000 in the first half of 2023, benefiting from a preferential tax rate of 15% for high-tech enterprises[31] - Profit attributable to equity holders increased by 12.0% to HKD 638,611,000 in the first half of 2023, with net profit margin rising to 19.2% from 16.7%[32] - Cash and cash equivalents increased to HKD 1,789,616,000 as of June 30, 2023, with bank borrowings slightly rising to HKD 3,379,969,000[34] - Capital-to-debt ratio remained stable at 20.1% as of June 30, 2023, with a current ratio improving to 1.87 from 1.82[34] - Total employee count increased to 5,300 as of June 30, 2023, up from 4,800 in the same period last year, reflecting a 10.4% growth[35] - Total employee compensation costs for the first six
石四药集团(02005) - 2023 - 中期财报