Financial Performance - Revenue for the six months ended June 30, 2025, was HKD 18,984,000, a decrease of 0.6% compared to HKD 19,099,000 for the same period in 2024[9] - Gross profit for the same period was HKD 5,551,000, down 21% from HKD 7,027,000 in 2024[9] - Operating loss for the six months was HKD 16,220,000, compared to an operating profit of HKD 7,710,000 in the previous year[9] - The net loss for the period was HKD 27,457,000, significantly higher than the net loss of HKD 6,470,000 in 2024[11] - Total comprehensive loss for the period amounted to HKD 35,847,000, compared to HKD 9,321,000 in the same period last year[11] - For the six months ended June 30, 2025, the company reported a loss of HKD 25,909,000, compared to a loss of HKD 6,470,000 for the same period in 2024[15] - The company experienced a total segment loss of HKD 14,759,000 for the six months ended June 30, 2025, compared to a profit of HKD 642,000 in the same period of 2024[29] - The attributable loss to shareholders increased to approximately HKD 27,457,000, compared to HKD 6,470,000 for the same period in 2024[58] Revenue Breakdown - Revenue from the wastewater treatment segment was HKD 17,848,000, down from HKD 19,099,000 in the previous year, representing a decrease of approximately 6.5%[27] - The energy management segment generated revenue of HKD 1,136,000, with no revenue reported in the same period last year[27] - The total customer contract revenue for the six months ended June 30, 2025, was HKD 18,984,000, compared to HKD 19,099,000 in 2024, indicating a slight decline of 0.6%[27] Assets and Liabilities - Current liabilities increased to HKD 477,526,000 from HKD 451,256,000 as of December 31, 2024[12] - Non-current assets totaled HKD 2,565,000, a slight decrease from HKD 2,685,000 as of December 31, 2024[12] - The company’s total equity attributable to owners was HKD (610,533,000), worsening from HKD (576,178,000) in the previous year[14] - Total trade and other payables as of June 30, 2025, were HKD 465,796,000, up from HKD 435,680,000 as of December 31, 2024[41] - The company’s total borrowings as of June 30, 2025, amounted to HKD 153,938,000, compared to HKD 150,928,000 as of December 31, 2024[44] Cash Flow and Investments - The total cash and cash equivalents at the end of the period were HKD 1,705,000, a decrease from HKD 6,604,000 at the end of June 2024[18] - The cash used in operating activities was HKD 3,095,000, an improvement from HKD 4,044,000 in the previous year[18] - The company invested approximately HKD 7,000,000 in property, plant, and equipment for the six months ended June 30, 2025, compared to zero investment in the same period in 2024[39] Shareholder Information - The company reported a basic and diluted loss per share of HKD 7.56, compared to HKD 2.78 in the prior year[11] - Basic and diluted loss per share for the six months ended June 30, 2025, was HKD 0.0757, compared to HKD 0.0278 in 2024, based on a weighted average of 342,698,000 shares in 2025 versus 232,619,000 shares in 2024[37] - Major shareholders include Classy Jade with 53,429,000 shares (15.59%), and Zhang Zihong with 88,580,000 shares (25.85%)[77] Corporate Governance - The company has established a formal internal audit department to manage and oversee internal control procedures, ensuring compliance and risk management[84] - The company has complied with the corporate governance code as outlined in the listing rules during the six months ending June 30, 2025[83] - The audit committee consists of three independent non-executive directors[86] - Discussions regarding audit, internal controls, and financial reporting were held by the audit committee[86] Future Outlook - The company aims to focus on the market for existing equipment upgrades, driven by increased demand for environmental equipment renewal following the State Council's implementation of the large-scale equipment renewal plan[60] - The group remains optimistic about business development in the second half of the year, focusing on core competitiveness and opportunities in equipment upgrades and new power system construction[63] Stock Options and Securities - The company has a stock option plan in place, with a total of 10,808,000 options unexercised as of June 30, 2025[57] - The stock options granted to directors and employees are priced at HKD 0.50 per share, with various expiration dates extending to May 10, 2030[75] - The total number of securities that can be issued under the stock option plan by June 30, 2025, is 10,808,000 shares, representing 3.15% of the company's issued share capital as of that date[73]

（於香港註冊成立的有限公司） 股份代號： 中期報告 2025 目錄 | 財務摘要 | 2 | | --- | --- | | 公司資料 | 3 | | 管理層討論及分析 | 5 | | 企業管治與其他資料 | 19 | | 中期財務資料審閱報告 | 22 | | 簡明合併收益表 | 23 | | 簡明合併綜合收益表 | 24 | | 簡明合併財務狀況表 | 25 | | 簡明合併權益變動表 | 27 | | 簡明合併現金流量表 | 28 | | 簡明合併財務報表附註 | 30 | | 釋義 | 71 | 財務摘要 業績 按分部劃分的收益及其他收入 收益及其他收入（百萬港元） 本公司股東應佔虧損（百萬港元） 本公司股東 應佔股東權益（百萬港元） 資產總額（百萬港元） 已發行股份數目 本公司股東 應佔每股資產淨值（港元） 企業融資及承銷（百萬港元） 每股基本╱攤薄虧損（港元） 資產管理及顧問（百萬港元） 保證金融資（百萬港元） 投資及貸款（百萬港元） 其他（百萬港元） 經紀（百萬港元） 2025年上半年 2024年上半年 2025年上半年 2024年上半年 2025年上半年 2024年上半年 2025年上半年 2 ...

(Incorporated in the Cayman Islands with limited liability) Stock code: 1548 2025 This interim report is printed on environmental-friendly paper 目 錄 2 公司概況 3 公司資料 5 財務摘要 7 管理層討論及分析 24 其他資料 43 中期簡明合併損益表 45 中期簡明合併全面收益表 46 中期簡明合併財務狀況表 48 中期簡明合併權益變動表 50 中期簡明合併現金流量表 52 中期簡明合併財務資料附註 金斯瑞生物科技股份有限公司 2025中期報告 公司 概況 金斯瑞生物科技股份有限公司（「本公司」，連同其附屬公司合稱「本集團」或「金斯瑞生物科技」）為一家廣受認同的 生物科技公司。基於我們的專有基因合成技術，以及有關生命科學研究與應用的其他技術和專業知識，我們已成功 建立了多個主要平台，包括(i)金斯瑞品牌名下的生命科學服務及產品平台（「金斯瑞」），為全球科學界提供一站式解 決方案；(ii) Probio Technology Limited（「Probio Ca ...

Financial Performance - Revenue and other income for the first half of 2025 reached RMB 7,480,828,000, representing a 17.67% increase compared to RMB 6,357,645,000 in the same period of 2024[20]. - Profit before tax increased by 29.74% to RMB 2,039,905,000 from RMB 1,572,294,000 year-on-year[20]. - Net profit attributable to shareholders rose by 21.03% to RMB 1,682,932,000 compared to RMB 1,390,527,000 in the previous year[20]. - Basic and diluted earnings per share increased by 23.08% to RMB 0.32 from RMB 0.26[20]. - Total assets as of June 30, 2025, amounted to RMB 295,116,777,000, a 0.74% increase from RMB 292,959,018,000 at the end of 2024[20]. - Total liabilities increased by 0.62% to RMB 225,127,020,000 from RMB 223,735,548,000[20]. - The company's net capital as of June 30, 2025, was RMB 43,215,622,617.49, down from RMB 45,572,211,225.65 at the end of 2024[22]. - The liquidity coverage ratio improved to 237.43% from 216.14%[22]. - The company achieved total revenue and other income of RMB 7.48 billion, an increase of 18% year-on-year[31]. - The net profit attributable to shareholders reached RMB 1.68 billion, reflecting a year-on-year increase of 21%[31]. Risk Management - The company maintains a robust risk management framework to address various operational risks and ensure sustainable business development[116]. - The risk management structure includes a four-tier organization, with the board of directors ultimately responsible for comprehensive risk management[117]. - The company has established a multi-level risk limit system for market risk, including risk tolerance and business risk limits, to manage potential losses effectively[121]. - Credit risk management includes internal credit ratings, unified credit management, and close monitoring of bond issuers' operational conditions[124]. - The company has implemented a liquidity risk management framework, ensuring overall liquidity risk is controllable through centralized management of short-term financing tools[126]. - A liquidity risk emergency plan has been developed, outlining levels, trigger standards, and response measures to prevent liquidity risk[127]. - The company employs a proactive management approach to operational risk, enhancing internal controls and risk awareness among all employees[125]. - Stress testing is a key component of the company's market risk management, assessing potential losses under pressure scenarios[121]. Compliance and Governance - The company has complied with the corporate governance code and met the majority of the best practice recommendations during the reporting period[192]. - Since 2025, the company's compliance management has been stable and orderly, with no major compliance risk events or regulatory penalties reported[133]. - The company has implemented a compliance management system that includes pre-approval, monitoring, and post-check mechanisms to mitigate compliance risks[132]. - The company has integrated compliance culture into its corporate culture to promote adherence to compliance management principles[133]. - The audit and related party transaction control committee has reviewed and confirmed the interim financial information without raising objections to the accounting policies adopted by the company[191]. Shareholder Returns - The company plans to distribute a cash dividend of RMB 1.095 per 10 shares to all A-share and H-share shareholders, totaling RMB 504,881,246.47[4]. - The proposed cash dividend for 2024 is RMB 918,007,818.92, with a distribution of RMB 1.086 per 10 shares for A and H shareholders[149]. - The cash dividend ratio remained above 30%, enhancing shareholder value and investor confidence[155]. Business Development and Strategy - The company aims to enhance its wealth management business and expand its high-net-worth client base in the second half of 2025[43]. - The company plans to enhance its institutional trading services and expand its client coverage in the second half of 2025, focusing on technology-driven efficiency improvements[62]. - The company aims to deepen cooperation with investment institutions and expand business channels in the second half of 2025, particularly in debt financing and brand project development[53]. - The company plans to increase bond investments in strategic areas such as technological innovation and green finance in the second half of 2025[68]. - The company aims to enhance its investment management capabilities and diversify its product offerings to meet wealth management needs in the second half of 2025[75]. Customer and Market Growth - The total number of customers reached 6.87 million, a 6% increase compared to the end of the previous year[36]. - New account openings totaled 435,000, representing a 49% year-on-year growth[36]. - The total customer assets amounted to RMB 14.6 trillion, a 7% increase from the end of the previous year[36]. - The A-share market saw a total trading volume of RMB 163 trillion in the first half of 2025, a 60% increase year-on-year[35]. Legal Matters - The company is involved in a lawsuit regarding a breach of purchase agreement, with a claim amount of approximately 835 million CNY[194]. - The company has initiated litigation related to equity transfer disputes, with a claim amount of approximately 114.03 million CNY[197]. - A lawsuit concerning investment contract disputes has been filed, with a claim amount of approximately 29.15 million CNY[197]. - The company is facing arbitration related to labor disputes, with a claim amount of approximately 17.52 million CNY[197]. - A financing agreement dispute has led to litigation with a claim amount of approximately 10 million USD[198]. - The company has filed lawsuits related to margin trading disputes, with a total claim amount of approximately 435 million CNY across fourteen cases[199].

[Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides essential details about the company's governance, operational structure, and shareholder-related matters [Board of Directors and Governance Structure](index=3&type=section&id=Board%20and%20Governance) This section lists the company's board members (including executive, non-executive, and independent non-executive directors), CEO, and members of the audit, remuneration, and nomination committees - Chairperson of the Board is **Ms. Li Qiling**, CEO is **Ms. Yu Liwei**[3](index=3&type=chunk)[4](index=4&type=chunk) - Mr. Hu Shuo was appointed as a non-executive director on **August 1, 2025**[3](index=3&type=chunk) - Mr. Lao Tongsheng chairs the Audit Committee, Mr. EDE, Ronald Hao Xi chairs the Remuneration Committee, and Ms. Li Qiling chairs the Nomination Committee[3](index=3&type=chunk)[4](index=4&type=chunk) [Company Basic Information](index=3&type=section&id=Company%20Details) This section provides basic company information such as auditor, principal bankers, head office and principal place of business, registered office, and share registrar - The company's auditor is **Ernst & Young**[5](index=5&type=chunk) - Principal bankers include Bank of China (Hong Kong) and The Hongkong and Shanghai Banking Corporation[6](index=6&type=chunk)[8](index=8&type=chunk) - The company's registered office is in the Cayman Islands, and its head office and principal place of business are in Wan Chai, Hong Kong[6](index=6&type=chunk)[8](index=8&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) This section outlines the shareholder timetable, including book closure dates, record date, and payment date and amount for the interim dividend - The book closure dates for the interim dividend are from **September 18 to September 19, 2025**[7](index=7&type=chunk)[8](index=8&type=chunk) - The record date for determining shareholders' entitlement to the interim dividend is **September 19, 2025**[7](index=7&type=chunk)[8](index=8&type=chunk) - The interim dividend is **HKD 0.015 per share**, expected to be paid around **October 3, 2025**[7](index=7&type=chunk)[8](index=8&type=chunk) [Group Structure Chart](index=5&type=section&id=Group%20Structure) This section visually represents the equity structure of the Group and its major wholly-owned subsidiaries [Group Structure Overview](index=5&type=section&id=Group%20Structure%20Overview) This section visually presents the equity structure of ER-BAO Pharmaceutical (Holdings) Limited and its major wholly-owned subsidiaries, including Suzhou ER-BAO Pharmaceutical, Lanzhou ER-BAO Pharmaceutical, and Fujian ER-BAO Pharmaceutical - ER-BAO Pharmaceutical (Holdings) Limited (HKEX: 2348) is the Group's parent company[11](index=11&type=chunk) - Major wholly-owned subsidiaries include Suzhou ER-BAO Pharmaceutical Co., Ltd., Lanzhou ER-BAO Pharmaceutical Co., Ltd., and Fujian ER-BAO Pharmaceutical Co., Ltd[11](index=11&type=chunk) [Financial Highlights](index=6&type=section&id=Financial%20Highlights) This section summarizes the Group's key financial performance for the reporting period [Key Financial Performance](index=6&type=section&id=Key%20Financial%20Performance) For the six months ended June 30, 2025, the Group's revenue increased by 9.2% year-on-year, but profit for the period significantly decreased by 79.3% due to non-recurring gains in the prior year (gain on disposal of an associate and government grants); excluding these non-recurring items, operating profit decreased by 17.1% Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 630,424 | 577,447 | 9.2% | | Gross profit | 313,978 | 337,912 | –7.1% | | Gross profit margin | 49.8% | 58.5% | –8.7 percentage points | | Gain on disposal of an associate | 0 | 286,670 | Not applicable | | Profit before tax | 130,317 | 556,752 | –76.6% | | Profit for the period | 101,708 | 491,583 | –79.3% | | Net profit margin | 16.1% | 85.1% | –69.0 percentage points | | Profit for the period attributable to owners of the parent (excluding 2024 non-recurring profit) | 104,572 | 126,127 | –17.1% | | Earnings per share – basic (RMB) | 0.06961 | 0.3286 | –78.8% | | Interim dividend per share (HKD) | 0.015 | 0.015 | – | | Net asset value per share (RMB) | 2.199 | 2.180 | 0.9% | - The decrease in profit for the period was primarily due to Suzhou ER-BAO Shanfeng Road plant and Lanzhou ER-BAO not achieving commercial production at scale, price reductions for centralized procurement products, and increased R&D expenses[16](index=16&type=chunk)[19](index=19&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's performance, industry environment, business operations, and future outlook [Results](index=7&type=section&id=Results) The Group's revenue for the six months ended June 30, 2025, increased by 9.2% to RMB 630,424,000; however, profit attributable to owners of the parent significantly decreased by 78.8% year-on-year due to non-recurring gains in the prior year from disposal of an associate's equity and government grants, with operating profit (excluding non-recurring gains) decreasing by 17.1% Revenue and Profit for H1 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 630,424 | 577,447 | 9.2% | | Profit attributable to owners of the parent | 104,572 | 493,046 | –78.8% | | Change in operating profit (excluding non-recurring profit) | –21,555 | – | –17.1% | - The main reasons for the profit decline include Suzhou ER-BAO Shanfeng Road plant and Lanzhou ER-BAO not achieving commercial production at scale, price reductions for "An" series products due to national centralized procurement policies, and increased R&D expenses[16](index=16&type=chunk)[19](index=19&type=chunk) [Industry Environment](index=7&type=section&id=Industry%20Environment) In H1 2025, the pharmaceutical industry showed diversified development amidst policy changes, market competition, and quality improvements, with optimized centralized procurement policies, rising demand for generic drugs due to an aging population, and the profound impact of AI technology - The National Healthcare Security Administration optimized drug centralized procurement policies, strengthening quality assessment and supervision, with the 10th batch of centralized procurement canceling the rule of being pre-selected if the price reduction exceeds 50%, and the 11th batch drawing significant attention[18](index=18&type=chunk)[20](index=20&type=chunk) - Global aging and increased competition have led to a continuous rise in the incidence of chronic diseases, tumors, and mental illnesses, creating broad market space for generic drugs[21](index=21&type=chunk)[24](index=24&type=chunk) - The application of AI technology has a significant and profound impact on all aspects of the pharmaceutical industry, including R&D, production, and marketing, driving pharmaceutical enterprises towards transformation, innovation, and industrial collaboration[22](index=22&type=chunk)[24](index=24&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) Overall sales increased by 9.2% during the period, with "An" series products declining due to centralized procurement, while antiviral drug entecavir dispersible tablets, Fujian ER-BAO's hyperlipidemia treatment series, and cefazolin powder injections all saw increased sales volume and value, and intermediate and API sales significantly grew by 142.7% due to commercial production at Suzhou ER-BAO Shanfeng Road plant and Lanzhou ER-BAO Major Product Sales Performance (H1 2025 vs H1 2024) | Product Category | Sales Volume Change | Sales Value Change | Primary Reason | | :--- | :--- | :--- | :--- | | Overall sales | - | +9.2% | - | | "An" series products | –5.7% | –22.1% | Impacted by national centralized procurement policy, price reductions in some regions | | Entecavir dispersible tablets | +14.0% | +8.7% | - | | Fujian ER-BAO product series (for hyperlipidemia) | +19.5% | +16.6% | - | | Cefazolin powder injections | +47.9% | +55.7% | - | | Intermediates and APIs | +244.8% | +142.7% | Commercial production at Suzhou ER-BAO Shanfeng Road plant and Lanzhou ER-BAO | [Product Research and Development](index=9&type=section&id=Product%20Research%20and%20Development) The Group, leveraging Suzhou ER-BAO Advanced Technology Research Institute, coordinates R&D teams across subsidiaries, focusing on generic drug APIs and formulations, optimizing existing product lines, and has divested Nanjing Fumeiruixin Technology Co., Ltd. to integrate R&D resources without significant impact on ongoing projects - Suzhou ER-BAO Advanced Technology Research Institute serves as the R&D platform, responsible for generic drug API and formulation R&D, and optimizing existing product lines[26](index=26&type=chunk)[30](index=30&type=chunk) - To integrate R&D resources, the Group disposed of its entire **65%** equity interest in Nanjing Fumeiruixin Technology Co., Ltd. on **June 9, 2025**, which had negative net assets on its books[27](index=27&type=chunk)[30](index=30&type=chunk) - The Group will continue to invest more resources in technological improvements and product R&D innovation, and seek external cooperation opportunities to enrich its product pipeline and accelerate R&D progress[26](index=26&type=chunk)[30](index=30&type=chunk) [New Products and Patent Licensing](index=9&type=section&id=New%20Products%20and%20Patent%20Licensing) During the period, the Group received approval for two drug specifications from the National Medical Products Administration's Center for Drug Evaluation, with six more under review, and obtained two national patent certificates, including one utility model patent and one invention patent - Rivaroxaban Tablets (10mg) and Rivaroxaban Tablets (15mg) have been approved by the National Medical Products Administration's Center for Drug Evaluation[28](index=28&type=chunk)[31](index=31&type=chunk) - Six other specifications (three APIs, three formulations) have been submitted for registration to the Center for Drug Evaluation and are currently under review[28](index=28&type=chunk)[31](index=31&type=chunk) - Two patent certificates were obtained: a tablet counting machine vibration device (utility model patent) and a tedizolid phosphate for injection powder and its preparation method (invention patent)[29](index=29&type=chunk)[32](index=32&type=chunk) [Other Matters](index=10&type=section&id=Other%20Matters) The Group consistently adheres to a quality-first management policy, steadily improving product quality, and systematically advancing corporate governance and social responsibility initiatives, achieving significant progress in organizational structure optimization, employee training, performance appraisal reform, digitalization, and risk control - The Group adheres to a quality-first management policy, with product quality steadily improving[33](index=33&type=chunk)[35](index=35&type=chunk) - Corporate governance and social responsibility work are progressing in an orderly manner, with continuous improvements in safety and environmental protection[33](index=33&type=chunk)[35](index=35&type=chunk) - Significant progress has been made in employee training, performance appraisal reform, digitalization, and risk control[33](index=33&type=chunk)[35](index=35&type=chunk) [Honors Awarded to the Group](index=10&type=section&id=Honors%20Awarded%20to%20the%20Group) In H1 2025, several of the Group's subsidiaries received multiple honors, including economic contribution awards, outstanding employer titles, and product recognition as "New Excellent Medical Devices and Classic Traditional Chinese Medicine Products" - Fujian ER-BAO Pharmaceutical Co., Ltd. was awarded the "**2024 Annual Special Award for Outstanding Economic Contribution Enterprise**" by the Licheng District People's Government and the "**2024 Annual Outstanding Economic Contribution Award (Tax Payment RMB 50 million-100 million)**" by the Putian Municipal People's Government[37](index=37&type=chunk) - Suzhou ER-BAO Pharmaceutical Co., Ltd. was awarded the "**2025 Outstanding Employer**" honor by 51job[37](index=37&type=chunk) - Fujian ER-BAO Pharmaceutical Co., Ltd.'s "**Atorvastatin Calcium Tablets**" and "**Loxoprofen Sodium Tablets**" were recognized as "**Fujian Province New Excellent Medical Devices and Classic Traditional Chinese Medicine Products**"[37](index=37&type=chunk) - Lanzhou ER-BAO Pharmaceutical Co., Ltd. was recognized as a "**Specialized, Refined, Unique, and New**" SME by the Gansu Provincial Department of Industry and Information Technology[37](index=37&type=chunk) [Outlook](index=11&type=section&id=Prospect) Facing intense competition and deepening policies in the generic drug industry, the Group will continue to increase R&D investment, leverage its advanced technology research institute platform for both generic and innovative drug development, strengthen collaborations with universities and research institutions, actively explore the big health sector and non-medical insurance consumer healthcare products to create a second growth curve, uphold quality-first principles, optimize production processes, reduce costs, expand market share through centralized procurement participation, sales channel expansion, and international certifications, and advance the application of information and intelligent technologies while continuously improving talent development and team building - The Group will continue to increase R&D investment, leverage its advanced technology research institute platform, focus on core areas, combine generic and innovative drug development, and strengthen cooperation with universities and research institutions[39](index=39&type=chunk)[41](index=41&type=chunk) - Actively explore the big health sector and non-medical insurance consumer healthcare products, seek external partners, expand new businesses, and create a second growth curve[39](index=39&type=chunk)[41](index=41&type=chunk) - In terms of market expansion, the Group will actively participate in domestic drug centralized procurement, strengthen cooperation with medical institutions, pharmaceutical commercial companies, and online e-commerce platforms, and systematically carry out international certification work[42](index=42&type=chunk)[46](index=46&type=chunk) - Formulate a five-year plan to promote the application of information and intelligent technologies, from business online-ization to AI-driven innovation, to build ER-BAO's digital technology platform[43](index=43&type=chunk)[46](index=46&type=chunk) - Continuously improve talent recruitment plans, implement three major human resource systems, build a scientific and reasonable talent development and career progression system, and enhance organizational capabilities[44](index=44&type=chunk)[47](index=47&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance, including sales, gross profit, expenses, segment profit, and asset profitability [Sales and Gross Profit](index=13&type=section&id=Sales%20and%20Gross%20Profit) During the period, the Group's turnover increased by 9.2% year-on-year to RMB 630,424,000, primarily driven by successful centralized procurement bids and significant growth in intermediate and API sales; however, gross profit decreased by 7.1% year-on-year, and gross profit margin declined by 8.7 percentage points to 49.8%, mainly due to high costs from underutilized API and intermediate production capacity and a decrease in gross profit from "An" series products Turnover Analysis by Product Category (Six Months Ended June 30, 2025) | Product | 2025 Turnover (RMB thousands) | 2024 Turnover (RMB thousands) | Change (RMB thousands) | 2025 Sales Ratio (%) | 2024 Sales Ratio (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Finished drugs | 590,208 | 560,878 | 29,330 | 93.6 | 97.1 | –3.5 | | Intermediates and APIs | 40,216 | 16,569 | 23,647 | 6.4 | 2.9 | 3.5 | | Total | 630,424 | 577,447 | 52,977 | 100.0 | 100.0 | 0.0 | - Export sales amounted to approximately **RMB 10,651,000**, accounting for **1.7%** of total turnover, a year-on-year increase of **229.0%**, primarily to Pakistan, Vietnam, and other countries[51](index=51&type=chunk)[54](index=54&type=chunk) - Gross profit margin decreased by **8.7 percentage points** from **58.5%** in the prior year to **49.8%**, mainly due to high production costs for APIs and intermediates and a decrease in gross profit from "An" series products[52](index=52&type=chunk)[54](index=54&type=chunk) [Expenses](index=14&type=section&id=Expenses) Total expenses for the period were approximately RMB 214,522,000, accounting for 34.0% of turnover, a 0.5 percentage point decrease from the prior year; selling expenses decreased due to a higher proportion of centralized procurement products, administrative expenses increased due to reclassification of surtaxes and intangible asset amortization, R&D expenses increased by 29.5% year-on-year, and other expenses primarily included inventory write-downs, idle capacity losses, and intangible asset impairment losses Major Expense Changes (H1 2025 vs H1 2024) | Expense Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total expenses | 214,522 | 199,100 | +15,422 | +7.7% | | Selling and distribution expenses | 56,830 | 68,911 | –12,081 | –17.5% | | Administrative expenses | 67,491 | 54,148 | +13,343 | +24.6% | | Research and development costs | 56,816 | 43,883 | +12,933 | +29.5% | | Other expenses | 33,071 | 29,498 | +3,573 | +12.1% | - The decrease in selling expenses was mainly due to the increased proportion of centralized procurement products[57](index=57&type=chunk)[58](index=58&type=chunk) - The increase in administrative expenses was primarily due to the reclassification of surtaxes and intangible asset amortization expenses[57](index=57&type=chunk)[58](index=58&type=chunk) - The increase in other expenses was mainly due to inventory write-downs and idle capacity losses resulting from high unit costs of Suzhou ER-BAO and Lanzhou ER-BAO products, as well as intangible asset impairment losses from Nanjing Fumeiruixin[57](index=57&type=chunk)[58](index=58&type=chunk) [Segment Profit](index=15&type=section&id=Segment%20Profit) For the six months ended June 30, 2025, the finished drug segment profit was approximately RMB 250,864,000, a year-on-year decrease of approximately RMB 13,598,000, mainly due to reduced gross profit from "An" series products affected by centralized procurement; the intermediate and API segment recorded a loss of approximately RMB 25,216,000, similar to the prior year, primarily due to increased costs from underutilized production capacity at Suzhou ER-BAO Shanfeng Road plant and Lanzhou ER-BAO Segment Profit (H1 2025 vs H1 2024) | Segment | 2025 Segment Profit/Loss (RMB thousands) | 2024 Segment Profit/Loss (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Finished drug segment | 250,864 | 264,462 | –13,598 | | Intermediate and API segment | –25,216 | –25,858 | +642 | - The decrease in finished drug segment profit was mainly due to a decline in gross profit from "**An**" series products affected by centralized procurement[59](index=59&type=chunk)[61](index=61&type=chunk) - The loss in the intermediate and API segment was primarily due to increased costs from underutilized production capacity at Suzhou ER-BAO Shanfeng Road plant and Lanzhou ER-BAO[59](index=59&type=chunk)[61](index=61&type=chunk) [Profit Attributable to Owners of the Parent](index=15&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, profit attributable to owners of the parent was approximately RMB 104,572,000, a significant year-on-year decrease of 78.8%; excluding two non-recurring gains in 2024 (net gain from disposal of 35% equity in Kangrong Dongfang and net gain from government grants for equipment validation at Suzhou ER-BAO Tianling Road plant), profit for the period decreased by 17.1% year-on-year Profit Attributable to Owners of the Parent (H1 2025 vs H1 2024) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Profit attributable to owners of the parent | 104,572 | 493,046 | –388,474 | –78.8% | | Profit attributable to owners of the parent (excluding non-recurring profit) | 104,572 | 126,127 | –21,555 | –17.1% | - 2024 non-recurring gains included a net gain of approximately **RMB 277,627,000** from the disposal of **35%** equity in Kangrong Dongfang and a net gain of approximately **RMB 89,292,000** from government grants for equipment validation at Suzhou ER-BAO Tianling Road plant[60](index=60&type=chunk)[62](index=62&type=chunk) [Analysis on the Return on Assets](index=16&type=section&id=Analysis%20on%20the%20Return%20on%20Assets) As of June 30, 2025, net assets attributable to owners of the parent were approximately RMB 3,302,996,000, with a return on net assets of 3.2%, a significant decrease from 15.1% in 2024; current ratio and quick ratio were 4.78 and 4.21, respectively, while accounts receivable turnover period decreased by 22 days to 74 days and inventory turnover period decreased by 8 days to 160 days, primarily due to strengthened accounts receivable management and lean production activities Key Asset Profitability Indicators (As of June 30, 2025) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net assets attributable to owners of the parent | Approximately RMB 3,302,996,000 | - | | Return on net assets | 3.2% | 15.1% | | Current ratio | 4.78 | - | | Quick ratio | 4.21 | - | | Accounts receivable turnover period (including trade and notes receivables) | Approximately 74 days | Decreased by 22 days | | Inventory turnover period | Approximately 160 days | Decreased by 8 days | - The decrease in accounts receivable turnover days was mainly due to strengthened management of accounts receivable[63](index=63&type=chunk)[64](index=64&type=chunk) - The decrease in inventory turnover days was mainly due to Suzhou ER-BAO's lean production activities reducing inventory[63](index=63&type=chunk)[64](index=64&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=16&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group held financial assets at fair value through profit or loss totaling approximately RMB 261,353,000, accounting for 6.7% of total assets, comprising Hong Kong listed equity investments and principal-protected floating-rate structured deposits; during the period, the Group recorded a net gain of approximately RMB 4,474,000 from financial assets Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Investment Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Hong Kong publicly listed equities | 15,356 | 10,795 | | Structured deposits | 245,200 | 195,500 | | Total | 261,353 | 207,135 | | Percentage of total assets | 6.7% | 5.2% | | Net gain for the period | 4,474 | 4,093 | - The Group purchased **RMB 245,200,000** in principal-protected floating-rate structured deposits from seven reputable Chinese banks, with annual interest rates ranging from **0.84% to 3.1591%**[65](index=65&type=chunk)[69](index=69&type=chunk) - The Group also holds a **1.48%** equity interest in Sino-American Huashitong Biomedical Technology (Wuhan) Co., Ltd., with an investment of **RMB 20,000,000**, showing no signs of impairment[66](index=66&type=chunk)[69](index=69&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group held cash and bank balances of approximately RMB 1,139,131,000; net cash inflow from operating activities was approximately RMB 201,983,000, net cash outflow from investing activities was approximately RMB 439,071,000, and net cash outflow from financing activities was approximately RMB 127,398,000, resulting in a net decrease in cash and cash equivalents of approximately RMB 364,486,000; the Group's total bank credit facilities amounted to RMB 1,713,000,000, with a gearing ratio of 0.2% Liquidity and Cash Flows (As of June 30, 2025) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank balances | 1,139,131 | 1,158,261 | | Net cash inflow from operating activities | 201,983 | 171,454 | | Net cash outflow from investing activities | 439,071 | –29,185 (inflow) | | Net cash outflow from financing activities | 127,398 | 31,428 | | Net change in cash and cash equivalents | –364,486 (decrease) | +169,211 (increase) | | Total bank credit facilities | 1,713,000 | 1,613,000 | | Interest-bearing bank and other borrowings | 8,995 | 29,864 | | Gearing ratio | 0.2% | 0.7% | | Inventory balance | 254,100 | 308,241 | - The significant increase in net cash outflow from investing activities, compared to an inflow in the prior year, may be primarily related to the acquisition of property, plant and equipment, acquisition of intangible assets, and an increase in time deposits[68](index=68&type=chunk)[70](index=70&type=chunk)[152](index=152&type=chunk) [Significant Investments and Asset Changes](index=18&type=section&id=Significant%20Investment%20and%20Assets%20Changes) Lanzhou ER-BAO Pharmaceutical Co., Ltd., as the Group's API and intermediate production base, has completed its first phase and plans to invest RMB 29,000,000 in its second phase; the Suzhou ER-BAO Tianling Road plant relocation project is complete, with ongoing environmental building and Minfeng Road plant workshop renovation projects at Shanfeng Road, totaling approximately RMB 27,000,000; to integrate R&D resources, the Group transferred its entire equity interest in Nanjing Fumeiruixin Technology Co., Ltd. for RMB 100,000; as of June 30, 2025, the Group had contracted but unprovided capital expenditure commitments for plant and machinery of approximately RMB 41,513,000 - Lanzhou ER-BAO Pharmaceutical Co., Ltd.'s Phase I project has been completed and put into production, with Phase II planned to invest **RMB 29,000,000** for new product equipment additions and process improvements[74](index=74&type=chunk)[77](index=77&type=chunk) - The Suzhou ER-BAO Tianling Road plant relocation project has been completed, and the Shanfeng Road environmental building and Minfeng Road plant workshop renovation projects are underway, with a total investment of approximately **RMB 27,000,000**[75](index=75&type=chunk)[77](index=77&type=chunk) - To integrate R&D resources, the Group on **June 9, 2025**, transferred its entire equity interest in Nanjing Fumeiruixin Technology Co., Ltd. to an independent third party for **RMB 100,000**[78](index=78&type=chunk)[84](index=84&type=chunk) - As of **June 30, 2025**, the Group had contracted but unprovided capital expenditure commitments for plant and machinery of approximately **RMB 41,513,000**[80](index=80&type=chunk)[84](index=84&type=chunk) [Foreign Currency and Treasury Policies](index=19&type=section&id=Foreign%20Exchange%20and%20Treasury%20Policies) For the period ended June 30, 2025, the Group recorded a net exchange gain of approximately RMB 1,103,000 due to RMB exchange rate fluctuations (compared to a loss of approximately RMB 2,689,000 in 2024); foreign exchange risk is not significant as most business is settled in RMB, but there is HKD-related foreign exchange risk when paying HKD dividends; the Group will continue to monitor foreign exchange and interest rate markets and hedge when necessary Exchange Gain/Loss (Six Months Ended June 30, 2025) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net exchange gain | 1,103 | –2,689 (loss) | - Most of the Group's business transactions, assets, and liabilities are primarily settled in RMB, so foreign exchange risk is not significant[82](index=82&type=chunk)[85](index=85&type=chunk) - As the Group pays dividends in HKD, foreign exchange risk is mainly related to HKD[82](index=82&type=chunk)[85](index=85&type=chunk) - The Group will continue to monitor foreign exchange and interest rate markets and, when necessary, use forward foreign exchange contracts to hedge foreign exchange risk and interest rate swap contracts to hedge interest rate risk[83](index=83&type=chunk)[85](index=85&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) This section covers various additional disclosures, including employee and remuneration policies, asset charges, contingent liabilities, future investments, and corporate governance matters [Staff and Remuneration Policy](index=20&type=section&id=Staff%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 1,116 staff, with total staff costs for the period approximately RMB 108,715,000, mainly due to annual salary adjustments; the Group values human resources as its most precious asset, with remuneration policies referencing market benchmarks and individual qualifications, and providing retirement plans, share option schemes, and medical benefits Employee and Remuneration Information (As of June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Number of employees | 1,116 | - | | Total staff costs (RMB thousands) | 108,715 | 106,147 | | Reason for change | Annual salary adjustment increase | - | - The Group provides employees with defined contribution retirement plans, share option schemes, and medical benefits, and offers dormitory accommodation for certain employees in China[86](index=86&type=chunk)[91](index=91&type=chunk) [Charges on Assets](index=20&type=section&id=Charges%20on%20Assets) As of June 30, 2025, the Group had no assets pledged to banks to secure credit facilities granted to its subsidiaries - As of **June 30, 2025**, the Group had not pledged any assets to secure bank credit facilities[87](index=87&type=chunk)[92](index=92&type=chunk) [Contingent Liabilities](index=20&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of **June 30, 2025**, the Group had no significant contingent liabilities[88](index=88&type=chunk)[93](index=93&type=chunk) [Plans for Significant Investments and Expected Source of Funding](index=20&type=section&id=Plans%20for%20Significant%20Investments%20and%20Expected%20Source%20of%20Funding) Apart from disclosed capital expenditure commitments, increases in subsidiary registered capital, and capital investments for relocation projects, the Group has no other significant future investment plans or plans to acquire capital assets; the Group possesses sufficient financial and internal resources but may still use bank loans or internal resources to fund these capital expenditures - Except for disclosed capital expenditure commitments, increases in subsidiary registered capital, and capital investments for relocation projects, the Group has no other significant investment plans[89](index=89&type=chunk)[94](index=94&type=chunk) - The Group will fund these capital expenditure commitments through bank loans or internal resources[81](index=81&type=chunk)[84](index=84&type=chunk) [Segment Information](index=20&type=section&id=Segment%20Information) This section indicates that the Group's segment information analysis for the six months ended June 30, 2025, is presented in Note 2 to the interim financial information - Details of the Group's segment information analysis can be found in **Note 2** to the interim financial information[90](index=90&type=chunk)[95](index=95&type=chunk) [Directors' and Chief Executive Officer's Interests and Short Positions in Shares and Underlying Shares](index=21&type=section&id=Directors%27%20and%20Chief%20Executive%20Officer%27s%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, the company's directors and chief executive officer held long positions in the company's ordinary shares and underlying shares of associated corporations, with Ms. Li Qiling and Mr. Xiong Rongli holding substantial shares through controlled companies, and Ms. Yu Liwei holding share options Directors' and Chief Executive Officer's Long Positions in the Company's Ordinary Shares (As of June 30, 2025) | Name | Number of Shares Beneficially Owned Directly | Number of Shares Held Through Controlled Corporations | Total | Approximate Percentage of the Company's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Ms. Li Qiling | 107,708,000 | 601,844,000 | 709,552,000 | 47.21 | | Mr. Xiong Rongli | 1,880,000 | 601,844,000 | 603,724,000 | 40.17 | | Mr. Liang Kangmin | – | 112,284,000 | 112,284,000 | 7.47 | | Ms. Yu Liwei (CEO) | 8,624,000 | – | 8,624,000 | 0.57 | - Ms. Li Qiling and Mr. Xiong Rongli each beneficially own **50%** equity interest in Fortune United Group Limited, which holds **601,844,000** shares in the Company[104](index=104&type=chunk) - Ms. Yu Liwei's interest in **8,624,000** underlying shares represents share options granted under the Company's share option scheme[104](index=104&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=23&type=section&id=Directors%27%20Rights%20to%20Acquire%20Shares%20or%20Debentures) Apart from the disclosed interests of directors and the chief executive officer in shares and underlying shares, no director, their spouse, or children under 18 years of age were granted or exercised any rights to acquire interests in the company's shares or debentures during the period - During the period, except for the disclosed share options, no director or their family members were granted or exercised rights to purchase company shares or debentures[105](index=105&type=chunk)[108](index=108&type=chunk) [Share Option Scheme](index=23&type=section&id=Share%20Option%20Scheme) This section indicates that details regarding the company's share option scheme are provided in Note 17 to the interim financial information - Detailed disclosure of the Company's share option scheme can be found in **Note 17** to the interim financial information[106](index=106&type=chunk)[109](index=109&type=chunk) [Substantial Shareholders' and Other Persons' Interests in Shares and Underlying Shares](index=23&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, in addition to directors and the chief executive officer, several substantial shareholders and other persons held long positions in the company's shares, including Fortune United Group Limited and its associated companies, Ms. Yao Bin, Mr. Li Dongming and his associated companies, East Sea International Investment Limited and its related parties, and FMR LLC Substantial Shareholders' and Other Persons' Long Positions in the Company's Shares (As of June 30, 2025) | Name | Nature of Interest | Number of Shares Held | Approximate Percentage of the Company's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | Fortune United Group Limited | Direct beneficial ownership | 601,844,000 | 40.04 | | Keysmart Enterprises Limited | Held through controlled corporations | 601,844,000 | 40.04 | | Hunwick International Limited | Held through controlled corporations | 601,844,000 | 40.04 | | Ms. Yao Bin | Family interest | 603,724,000 | 40.17 | | Mr. Li Dongming | Direct beneficial ownership | 224,000 | 0.02 | | Time Lead Investments Limited | Direct beneficial ownership | 80,000,000 | 5.32 | | East Sea International Investment Limited | Direct beneficial ownership | 112,284,000 | 7.47 | | Ms. Luo Meixi | Family interest | 112,284,000 | 7.47 | | Mr. Liang Yaocheng | Held through controlled corporations | 112,284,000 | 7.47 | | Ms. Zhu Xuefang | Family interest | 112,284,000 | 7.47 | | FMR LLC | Held through controlled corporations | 119,751,156 | 7.98 | - The issued share capital of Fortune United Group Limited is equally beneficially owned by companies wholly owned by Ms. Li Qiling and Mr. Xiong Rongli[118](index=118&type=chunk) - Ms. Yao Bin is the spouse of Mr. Xiong Rongli, Ms. Luo Meixi is the spouse of Mr. Liang Kangmin, and Ms. Zhu Xuefang is the spouse of Mr. Liang Yaocheng, all of whom are deemed to have family interests[118](index=118&type=chunk) [Purchase, Redemption or Sale of Listed Securities of the Company](index=25&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20Listed%20Securities%20of%20the%20Company) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - During the period, neither the company nor its subsidiaries engaged in any purchase, redemption, or sale of listed securities[115](index=115&type=chunk)[117](index=117&type=chunk) [Compliance with Corporate Governance Code](index=26&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) For the six months ended June 30, 2025, the company complied with the provisions of the Corporate Governance Code, with one exception: non-executive director Mr. Liang Kangmin was unable to attend the annual general meeting due to other business arrangements - The company complied with the Corporate Governance Code, except that non-executive director Mr. Liang Kangmin was unable to attend the annual general meeting due to other business arrangements[119](index=119&type=chunk)[123](index=123&type=chunk) [Model Code for Securities Transactions](index=26&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and based on specific inquiries to all directors, the directors have complied with the standards set out in the Model Code for the six months ended June 30, 2025 - Directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[120](index=120&type=chunk)[124](index=124&type=chunk) [Audit Committee](index=26&type=section&id=Audit%20Committee) The company has established an Audit Committee in compliance with the Listing Rules, responsible for overseeing the Group's financial reporting system, risk management, and internal control systems; the Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Audit Committee is chaired by Mr. Lao Tongsheng, with members including Mr. EDE, Ronald Hao Xi and Ms. Lin Mingyi, all of whom are independent non-executive directors[121](index=121&type=chunk)[125](index=125&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the period[122](index=122&type=chunk)[125](index=125&type=chunk) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of HKD 0.015 per share for the year ending December 31, 2025, totaling approximately HKD 22,546,000 (approximately RMB 20,710,000) Interim Dividend Declaration | Metric | Amount | | :--- | :--- | | Interim dividend per share | HKD 0.015 | | Total amount | Approximately HKD 22,546,000 (approximately RMB 20,710,000) | [Closure of Register of Members](index=27&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the company will suspend share transfer registration from Thursday, September 18, 2025, to Friday, September 19, 2025; the record date is September 19, 2025, and dividend warrants are expected to be dispatched around October 3, 2025 - The register of members will be closed from **September 18 to September 19, 2025**[128](index=128&type=chunk)[132](index=132&type=chunk) - The record date for determining shareholders' entitlement to the interim dividend is **September 19, 2025**[129](index=129&type=chunk)[132](index=132&type=chunk) - Dividend warrants will be dispatched to shareholders around **October 3, 2025**[129](index=129&type=chunk)[132](index=132&type=chunk) [Appreciation](index=27&type=section&id=Appreciation) Ms. Li Qiling, Chairperson of the Board, expressed sincere gratitude to the company's shareholders, directors, business partners, management, and all employees for their support to the Group during the period - Ms. Li Qiling, Chairperson of the Board, expressed gratitude to all stakeholders for their support to the Group[130](index=130&type=chunk)[133](index=133&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the Group's financial performance over a specific period, detailing revenues, expenses, and net profit [Profit or Loss Statement](index=28&type=section&id=Profit%20or%20Loss%20Statement) This section presents the condensed consolidated statement of profit or loss for the six months ended June 30, 2025, detailing financial data such as revenue, cost of sales, gross profit, other income and gains, various expenses, profit before tax, income tax, and profit for the period Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30, 2025) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 630,424 | 577,447 | | Cost of sales | (316,446) | (239,535) | | Gross profit | 313,978 | 337,912 | | Other income and gains | 30,861 | 421,636 | | Selling and distribution expenses | (56,830) | (68,911) | | Administrative expenses | (67,491) | (54,148) | | Research and development costs | (56,816) | (43,883) | | Other expenses | (33,071) | (29,498) | | Finance costs | (314) | (2,660) | | Share of loss of an associate | – | (3,696) | | Profit before tax | 130,317 | 556,752 | | Income tax | (28,609) | (65,169) | | Profit for the period | 101,708 | 491,583 | | Profit attributable to owners of the parent | 104,572 | 493,046 | | Non-controlling interests | (2,864) | (1,463) | | Earnings per share – basic (RMB) | 0.06961 | 0.3286 | | Earnings per share – diluted (RMB) | 0.06958 | 0.3282 | [Condensed Consolidated Statement of Comprehensive Income](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the Group's total comprehensive income, encompassing profit for the period and other comprehensive income/loss [Comprehensive Income Statement](index=29&type=section&id=Comprehensive%20Income%20Statement) This section presents the condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, including profit for the period and other comprehensive income/loss, such as exchange differences arising from the translation of foreign operations and the company's financial statements, ultimately arriving at total comprehensive income for the period after tax Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30, 2025) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the period | 101,708 | 491,583 | | Other comprehensive (loss)/income (to be reclassified to profit or loss): | | | | Exchange differences arising from translation of foreign operations | (4,848) | 2,516 | | Other comprehensive (loss)/income (not to be reclassified to profit or loss): | | | | Exchange differences arising from translation of the Company's financial statements | (10,350) | 8,473 | | Total other comprehensive (loss)/income for the period after tax | (15,198) | 10,989 | | Total comprehensive income for the period after tax | 86,510 | 502,572 | | Attributable to owners of the parent | 89,374 | 504,035 | | Non-controlling interests | (2,864) | (1,463) | [Condensed Consolidated Statement of Financial Position](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the Group's financial position at a specific point in time, detailing assets, liabilities, and equity [Financial Position Statement](index=30&type=section&id=Financial%20Position%20Statement) This section provides the condensed consolidated statement of financial position as of June 30, 2025, detailing the composition of non-current assets, current assets, current liabilities, non-current liabilities, and equity Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 994,385 | 1,038,195 | | Investment properties | 2,547 | 2,611 | | Right-of-use assets | 97,795 | 104,644 | | Construction in progress | 102,256 | 85,568 | | Goodwill | 241,158 | 241,158 | | Other intangible assets | 277,934 | 300,923 | | Financial assets at fair value through profit or loss | 20,000 | 20,000 | | Long-term prepayments | 7,564 | 8,469 | | Deferred tax assets | 4,462 | 5,467 | | **Total non-current assets** | **1,748,101** | **1,807,035** | | **Current assets** | | | | Inventories | 254,100 | 308,241 | | Trade and notes receivables | 247,272 | 267,886 | | Prepayments, other receivables and other assets | 232,725 | 249,715 | | Financial assets at fair value through profit or loss | 261,353 | 207,135 | | Cash and bank balances | 1,139,131 | 1,158,261 | | **Total current assets** | **2,134,581** | **2,202,241** | | Assets held for sale | – | 11,003 | | **Current liabilities** | | | | Trade and notes payables | 204,884 | 221,560 | | Other payables and accrued expenses | 228,772 | 299,417 | | Interest-bearing bank and other borrowings | 8,995 | 29,864 | | Lease liabilities | 162 | 1,160 | | Income tax payable | 4,147 | 2,602 | | **Total current liabilities** | **446,960** | **554,603** | | **Net current assets** | **1,687,621** | **1,647,638** | | **Total assets less current liabilities** | **3,435,722** | **3,454,673** | | **Non-current liabilities** | | | | Government grants | 3,360 | 3,360 | | Deferred tax liabilities | 129,366 | 120,950 | | Lease liabilities | – | 3,695 | | **Total non-current liabilities** | **132,726** | **128,005** | | **Net assets** | **3,302,996** | **3,326,668** | | **Equity** | | | | Equity attributable to owners of the parent | 3,302,996 | 3,324,268 | | Issued capital | 80,584 | 80,530 | | Reserves | 3,222,412 | 3,243,738 | | Non-controlling interests | – | 2,400 | | **Total equity** | **3,302,996** | **3,326,668** | [Condensed Consolidated Statement of Changes in Equity](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the changes in the Group's equity over a specific period, detailing movements in various equity components [Equity Changes Statement](index=32&type=section&id=Equity%20Changes%20Statement) This section presents the condensed consolidated statement of changes in equity for the six months ended June 30, 2025, detailing opening balances, profit for the period, other comprehensive income, exercise of share options, dividend declarations, and other changes for issued capital, share premium, capital redemption reserve, share option reserve, contributed surplus, statutory surplus reserve, exchange fluctuation reserve, other reserves, retained profits, and non-controlling interests Condensed Consolidated Statement of Changes in Equity (Six Months Ended June 30, 2025) | Item | Issued Capital (RMB thousands) | Share Premium (RMB thousands) | Capital Redemption Reserve (RMB thousands) | Share Option Reserve (RMB thousands) | Contributed Surplus (RMB thousands) | Statutory Surplus Reserve (RMB thousands) | Exchange Fluctuation Reserve (RMB thousands) | Other Reserves (RMB thousands) | Retained Profits (RMB thousands) | Total Equity Attributable to Owners of the Parent (RMB thousands) | Non-controlling Interests (RMB thousands) | Total Equity (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2025 | 80,530 | 5,777 | 8,106 | 5,949 | 100,175 | 443,952 | 22,556 | (1,114) | 2,658,337 | 3,324,268 | 2,400 | 3,326,668 | | Profit for the period | – | – | – | – | – | – | – | – | 104,572 | 104,572 | (2,864) | 101,708 | | Exchange differences | – | – | – | – | – | – | (15,198) | – | – | (15,198) | – | (15,198) | | Total comprehensive income for the period | – | – | – | – | – | – | (15,198) | – | 104,572 | 89,374 | (2,864) | 86,510 | | Exercise of share options | 54 | 1,138 | – | (178) | – | – | – | – | – | 1,014 | – | 1,014 | | Declaration of 2024 final dividend | – | – | – | – | – | – | – | – | (112,229) | (112,229) | – | (112,229) | | Equity-settled share option arrangements | – | – | – | 569 | – | – | – | – | – | 569 | – | 569 | | Lapsed share options | – | – | – | (1,954) | – | – | – | – | 1,954 | – | – | – | | Disposal of a subsidiary | – | – | – | – | – | – | – | – | – | – | 464 | 464 | | As of June 30, 2025 | 80,584 | 6,915 | 8,106 | 4,386 | 100,175 | 443,952 | 7,358 | (1,114) | 2,652,634 | 3,302,996 | – | 3,302,996 | [Condensed Consolidated Statement of Cash Flows](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the Group's cash inflows and outflows from operating, investing, and financing activities over a specific period [Cash Flows Statement](index=34&type=section&id=Cash%20Flows%20Statement) This section presents the condensed consolidated statement of cash flows for the six months ended June 30, 2025, detailing net cash flows from operating, investing, and financing activities, as well as the closing balance of cash and cash equivalents Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Cash flows from operating activities** | | | | Profit before tax | 130,317 | 556,752 | | Total adjustments | 189,288 | 349,621 | | Decrease (increase) in inventories | 31,154 | (49,041) | | Decrease in trade and notes receivables | 18,374 | 26,218 | | (Increase)/decrease in prepayments | (4,506) | 4,869 | | Decrease/(increase) in deposits and other receivables | 14,232 | (126,883) | | (Decrease)/increase in trade and notes payables | (16,673) | 27,255 | | (Decrease)/increase in other payables and accrued expenses | (24,150) | 1,254 | | Increase in other liabilities | – | 10,500 | | Income tax paid | (5,736) | (72,339) | | **Net cash flows from operating activities** | **201,983** | **171,454** | | **Cash flows from investing activities** | | | | Bank interest received | 25,111 | 29,815 | | Dividend income from financial assets at fair value through profit or loss | 584 | 48 | | Proceeds from disposal of property, plant and equipment | 6,572 | 7,225 | | Proceeds from disposal of financial assets at fair value through profit or loss | 5,281 | 896 | | Acquisition of property, plant and equipment and construction in progress | (58,038) | (129,255) | | Acquisition of intangible assets | (3,752) | (47,755) | | Redemption of wealth management products | 574,772 | 196,480 | | Acquisition of land use rights | (162) | – | | Disposal of a subsidiary (net of cash) | (287) | – | | Increase in time deposits with maturity over three months | (358,920) | (46,000) | | Acquisition of financial assets at fair value through profit or loss | (630,232) | (138,297) | | **Net cash flows (used in)/generated from investing activities** | **(439,071)** | **29,185** | | **Cash flows from financing activities** | | | | Cash paid for repayment of bank loans | (24,864) | (120,060) | | Proceeds from exercise of share options | 1,014 | 143 | | Lease liability payments | (2) | (641) | | New bank loans | 8,995 | 182,552 | | Interest paid | (312) | (2,636) | | Dividends paid | (112,229) | (90,786) | | **Net cash flows used in financing activities** | **(127,398)** | **(31,428)** | | **Net (decrease)/increase in cash and cash equivalents** | **(364,486)** | **169,211** | | Cash and cash equivalents at January 1 | 615,675 | 366,826 | | Effect of exchange rate changes, net | (13,564) | 11,285 | | **Cash and cash equivalents at June 30** | **237,625** | **547,322** | | **Analysis of cash and cash equivalents balance** | | | | Cash and bank balances | 212,625 | 547,322 | | Short-term bank deposits | 25,000 | 585,000 | | **Total** | **237,625** | **1,132,322** | [Notes to the Interim Financial Information](index=38&type=section&id=Notes%20to%20the%20Interim%20Financial%20Information) This section provides detailed explanations and breakdowns of the figures presented in the condensed consolidated interim financial statements [Corporate Information, Basis of Preparation and Changes in Accounting Policies](index=38&type=section&id=Corporate%20Information%2C%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) This section outlines the company's registration, group reorganization, listing status, principal business activities, and ultimate holding company, while also clarifying the basis of preparation for the interim financial information (IAS 34) and changes in accounting policies, noting that amendments to IAS 21 have no significant impact on the Group's financial information - The Company was incorporated in the Cayman Islands, and its shares were listed on the Main Board of the Stock Exchange on **July 11, 2003**[157](index=157&type=chunk)[160](index=160&type=chunk) - The Group is principally engaged in the development, manufacture, and sale of off-patent pharmaceutical products, including intermediates, APIs, and finished drugs[158](index=158&type=chunk)[161](index=161&type=chunk) - The interim financial information is prepared in accordance with **IAS 34** and presented in **RMB**[162](index=162&type=chunk)[163](index=163&type=chunk)[167](index=167&type=chunk) - Amendments to **IAS 21** regarding lack of exchangeability have no impact on this condensed consolidated interim financial information[168](index=168&type=chunk)[171](index=171&type=chunk) [Segment Information_Note](index=40&type=section&id=Segment%20Information_Note) This section details the Group's two reportable segments by product: finished drugs and intermediates & APIs; management assesses segment performance based on adjusted profit before tax and provides an analysis of segment revenue, results, and assets for the six months ended June 30, 2025 - The Group is divided into two reportable segments: finished drugs (including antibiotic and non-antibiotic formulations) and intermediates & APIs[172](index=172&type=chunk)[173](index=173&type=chunk) - Segment performance is assessed based on reportable segment profit (adjusted profit before tax), excluding interest income, non-lease finance costs, government grants, dividend income, fair value gains/losses on financial instruments, share of loss of an associate, and head office expenses[169](index=169&type=chunk)[172](index=172&type=chunk) Segment Revenue and Results (Six Months Ended June 30, 2025) | Segment | External Sales (RMB thousands) | Segment Results (RMB thousands) | | :--- | :--- | :--- | | Finished drugs | 590,208 | 250,864 | | Intermediates and APIs | 40,216 | (25,216) | | Total | 630,424 | 225,648 | Segment Assets (As of June 30, 2025) | Segment | Segment Assets (RMB thousands) | | :--- | :--- | | Finished drugs | 868,821 | | Intermediates and APIs | 774,853 | | Total | 1,643,674 | | Corporate and other unallocated assets | 2,239,008 | | Total assets | 3,882,682 | [Revenue, Other Income and Gains_Note](index=44&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains_Note) This section provides a detailed analysis of the Group's revenue, other income, and gains; for the six months ended June 30, 2025, revenue from contracts with customers was RMB 630,424,000, primarily from pharmaceutical product sales; other income includes bank interest income, government grants, while gains primarily arose from fair value gains on financial assets and exchange gains Revenue, Other Income and Gains (Six Months Ended June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Revenue** | | | | Revenue from contracts with customers | 630,424 | 577,447 | | **Other income** | | | | Bank interest income | 16,649 | 15,498 | | Government grants | 6,375 | 113,567 | | **Gains** | | | | Exchange gain, net | 1,103 | – | | Fair value gain on financial assets at fair value through profit or loss, net | 4,474 | 4,093 | | Gain on disposal of an associate | – | 286,670 | | **Total other income and gains** | **30,861** | **421,636** | Revenue by Geographical Market (Six Months Ended June 30, 2025) | Geographical Market | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 619,773 | 574,210 | | Other countries | 10,651 | 3,237 | | Total | 630,424 | 577,447 | - Other income and gains in 2024 included a gain on disposal of an associate of **RMB 286,670,000** and government grants of **RMB 113,567,000**, which were non-recurring items[186](index=186&type=chunk) [Finance Costs_Note](index=46&type=section&id=Finance%20Costs_Note) This section details finance costs for the six months ended June 30, 2025, primarily comprising interest on bank loans, interest on discounted bills receivable, and interest on lease liabilities, totaling RMB 314,000, a significant decrease from the prior year Finance Costs (Six Months Ended June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank loans | 157 | 2,492 | | Interest on discounted bills receivable | 155 | 144 | | Interest on lease liabilities | 2 | 24 | | **Total** | **314** | **2,660** | - Total finance costs significantly decreased year-on-year, mainly due to a substantial reduction in bank loan interest[188](index=188&type=chunk) [Profit Before Tax_Note](index=47&type=section&id=Profit%20Before%20Tax_Note) This section details various expenses and gains affecting the Group's profit before tax, including cost of sales, depreciation, R&D costs, employee benefit expenses, inventory write-downs, intangible asset impairment losses, as well as bank interest income and government grants Expenses/Gains Affecting Profit Before Tax (Six Months Ended June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of sales | 316,446 | 239,535 | | Depreciation of property, plant and equipment | 37,518 | 33,451 | | Research and development costs | 56,816 | 43,883 | | Total employee benefit expenses | 108,715 | 106,147 | | Write-down of inventories to net realizable value | 21,569 | 24,492 | | Impairment loss on intangible assets | 7,622 | – | | Bank interest income | (16,649) | (15,498) | | Government grants | (6,375) | (113,567) | - Research and development costs increased by **29.5%** year-on-year, reaching **RMB 56,816,000**[190](index=190&type=chunk) - An intangible asset impairment loss of **RMB 7,622,000** was recognized during the period, with no such item in the prior year[190](index=190&type=chunk) - Government grants significantly decreased from **RMB 113,567,000** in 2024 to **RMB 6,375,000** in 2025[190](index=190&type=chunk) [Income Tax_Note](index=48&type=section&id=Income%20Tax_Note) This section discloses income tax expense for the six months ended June 30, 2025, totaling RMB 28,609,000, comprising current income tax and deferred tax; no provision was made for Hong Kong profits tax as no taxable profit arose in Hong Kong during the period Income Tax Expense (Six Months Ended June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax expense | 19,527 | 41,256 | | Adjustment in respect of current income tax of prior years | (339) | (140) | | Deferred tax | 9,421 | 24,053 | | **Total tax expense for the period** | **28,609** | **65,169** | - Total income tax expense for the period decreased compared to the prior year[195](index=195&type=chunk) - No provision was made for Hong Kong profits tax as no taxable profit arose in Hong Kong during the period[196](index=196&type=chunk) [Dividends_Note](index=49&type=section&id=Dividends_Note) This section presents the dividends declared for the six months ended June 30, 2025, including final dividends, special dividends, and interim dividends; the Board has declared an interim dividend of HKD 0.015 per share Dividend Declaration (Six Months Ended June 30, 2025) | Dividend Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Final dividend (HKD 0.048/0.065 per share) | 67,337 | 90,786 | | Special dividend (HKD 0.032 per share/nil) | 44,892 | – | | Interim dividend (HKD 0.015 per share) | 20,710 | 20,594 | - A special dividend of **HKD 0.032** per share was declared in 2025, with no such item in the prior year[199](index=199&type=chunk) - On **August 22, 2025**, the company declared an interim dividend of **HKD 0.015** per share for the year ending December 31, 2025, totaling approximately **HKD 22,546,000** (approximately **RMB 20,710,000**)[199](index=199&type=chunk)[202](index=202&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent_Note](index=49&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent_Note) This section provides the calculation methods and results for basic and diluted earnings per share for the six months ended June 30, 2025; basic earnings per share was RMB 0.06961, and diluted earnings per share was RMB 0.06958, both significantly lower than the prior year Earnings Per Share (Six Months Ended June 30, 2025) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic earnings per share | 0.06961 | 0.3286 | | Diluted earnings per share | 0.06958 | 0.3282 | - Basic earnings per share is calculated based on profit attributable to ordinary equity holders of the parent and a weighted average of **1,502,199,000** shares[200](index=200&type=chunk)[206](index=206&type=chunk) - Diluted earnings per share considers the dilutive effect of share options, with a weighted average of **1,503,021,000** shares[201](index=201&type=chunk)[208](index=208&type=chunk) [Movements in Property, Plant and Equipment_Note](index=51&type=section&id=Movements%20in%20Property%2C%20Plant%20and%20Equipment_Note) During the period, additions to the Group's property, plant and equipment amounted to approximately RMB 1,712,000, disposals had a net book value of approximately RMB 3,798,000, and transfers from construction in progress amounted to approximately RMB 4,887,000 Movements in Property, Plant and Equipment (Six Months Ended June 30, 2025) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Additions | 1,712 | 2,495 | | Net book value of disposals | 3,798 | 709 | | Transfers from construction in progress | 4,887 | 321,275 | - The amount transferred from construction in progress to property, plant and equipment significantly decreased compared to the prior year[209](index=209&type=chunk)[211](index=211&type=chunk) [Inventories_Note](index=51&type=section&id=Inventories_Note) As of June 30, 2025, the Group's total inventory amounted to RMB 254,100,000, a decrease from December 31, 2024, primarily comprising raw materials, work in progress, and finished goods Inventory Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 87,275 | 98,128 | | Work in progress | 52,825 | 55,484 | | Finished goods | 114,000 | 154,629 | | **Total** | **254,100** | **308,241** | - Total inventory decreased by approximately **RMB 54,141,000** compared to the end of 2024[213](index=213&type=chunk) [Trade and Notes Receivables_Note](index=52&type=section&id=Trade%20and%20Notes%20Receivables_Note) As of June 30, 2025, the Group's net trade and notes receivables amounted to RMB 247,272,000; an aging analysis of trade receivables shows that amounts due within 90 days constitute the largest proportion; the Group primarily transacts with customers on cred

中期報告 INTERIM REPORT 2025 The first half of 2025 saw a considerable increase in macroeconomic and geopolitical uncertainty globally. We took swift and decisive actions to mitigate the impact from this challenging environment. Our global reach and scale and consistent efforts to diversify our business across brands, distribution channels and product categories underpin our resilient business model. For the six months ended June 30, 2025, we reported net sales of US$1,661.7 million, while our adjusted EBITDA m ...

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| 公司資料 | 2 | | --- | --- | | 有關前瞻性陳述的警告聲明 | 4 | | 管理層討論及分析 | 5 | | 簡明綜合中期財務報表審閱報告 | 18 | | 簡明綜合收益表 | 20 | | 簡明綜合全面收益表 | 21 | | 簡明綜合財務狀況表 | 22 | | 簡明綜合權益變動表 | 25 | | 簡明綜合現金流量表 | 27 | | 簡明綜合中期財務報表附註 | 29 | | 補充資料 | 68 | 1 通達集團控股有限公司 中期報告2025 目錄 公司資料 董事會 執行董事 王亞南先生 （主席） 王雄文先生 （副主席） 王明析先生 王明乙先生 許慧敏先生 非執行董事 陳詩敏女士 獨立非執行董事 楊孫西博士， 大紫荊勳章，金紫荊星章， 銀紫荊星章，太平紳士 張華峰先生， 金紫荊星章，銀紫荊星章， 太平紳士 丁良輝先生 MH, FCCA, FCPA (PRACTISING), ACA, CTA (HK), FHKIoD 施榮懷先生， 金紫荊星章，銅紫荊星章， 太平紳士 審核委員會 丁良輝先生 （主席） 楊孫西博士 張華峰先生 陳詩敏女士 薪酬委員會 丁良輝先生 （主席） 王亞南先 ...

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company experienced a significant shift from profit to loss in FY2023, with a negative net profit margin and diluted EPS 2023 Financial Highlights (Thousand HKD) | Indicator | 2023 | 2022 (Restated) | | :--- | :--- | :--- | | Revenue | 207,542 | 144,606 | | Gross Profit | 150,762 | 113,944 | | Loss/Profit Before Tax | (35,420) | 2,497 | | Loss/Profit Attributable to Owners of the Company | (32,294) | 8,047 | | Gross Profit Margin | 72.6% | 78.8% | | Loss/Profit Margin Attributable to Owners of the Company | (15.6%) | 5.6% | | Loss/Earnings Per Share — Basic and Diluted | (0.13) | 0.03 | [Consolidated Financial Statements](index=2&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the year ended December 31, 2023, the Group turned from profit to loss, recording a net loss of 36,046 thousand HKD, primarily due to increased cost of sales, impairment loss on non-financial assets, and a significant decrease in other gains, resulting in a basic and diluted loss per share of 0.13 HKD Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (Thousand HKD) | Indicator | 2023 | 2022 (Restated) | | :--- | :--- | :--- | | Revenue | 207,542 | 144,606 | | Cost of Sales, Net | (56,780) | (30,662) | | Gross Profit | 150,762 | 113,944 | | Other Income | 7,343 | 5,398 | | Other Gains and Losses | 571 | 33,128 | | Impairment Loss on Non-financial Assets | (7,022) | (604) | | Selling and Distribution Costs | (80,399) | (61,789) | | Administrative Expenses | (100,504) | (83,838) | | Loss/Profit Before Tax | (35,420) | 2,497 | | Loss/Profit for the Year | (36,046) | 1,599 | | Loss/Profit Attributable to Owners of the Company | (32,294) | 8,047 | | Loss/Earnings Per Share — Basic and Diluted | (0.13) | 0.03 | - Other gains and losses significantly decreased from **33,128 thousand HKD** in 2022 to **571 thousand HKD** in 2023, a key factor in the shift from profit to loss[4](index=4&type=chunk) - Impairment loss on non-financial assets significantly increased from **604 thousand HKD** in 2022 to **7,022 thousand HKD** in 2023[4](index=4&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of December 31, 2023, the Group reported net current liabilities of 45,931 thousand HKD and total liabilities exceeding total assets by 16,172 thousand HKD, indicating a deteriorating financial position Consolidated Statement of Financial Position Summary (Thousand HKD) | Indicator | 2023 | 2022 (Restated) | | :--- | :--- | :--- | | Non-current Assets | 45,302 | 75,990 | | Current Assets | 136,808 | 100,062 | | Current Liabilities | 182,739 | 148,477 | | Net Current Liabilities | (45,931) | (48,415) | | Total Assets Less Current Liabilities | (629) | 27,575 | | Non-current Liabilities | 15,543 | 10,245 | | Net (Liabilities)/Assets | (16,172) | 17,330 | | Equity Attributable to Owners of the Company | 1,721 | 32,083 | | Non-controlling Interests | (17,893) | (14,753) | | Total Equity | (16,172) | 17,330 | - Non-current assets decreased from **75,990 thousand HKD** in 2022 to **45,302 thousand HKD** in 2023, primarily due to a significant reduction in loans to an associate[6](index=6&type=chunk) - Total equity shifted from **17,330 thousand HKD** in 2022 to **negative 16,172 thousand HKD** in 2023, reflecting a deterioration in the company's financial health[7](index=7&type=chunk) [Notes to the Consolidated Financial Statements](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1. General Information](index=6&type=section&id=1.%20General%20Information) The company is an investment holding company, with its subsidiaries primarily engaged in trading footwear and healthcare products, and providing financial and online medical services - The company is a listed entity incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange[8](index=8&type=chunk) - The Group's principal activities include trading footwear products, trading healthcare products, financial services, and online medical services[8](index=8&type=chunk) [2. Application of Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=2.%20Application%20of%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group adopted several new and revised HKFRS for the first time this year, leading to accounting policy changes and restatement of 2022 results and balances due to the abolition of the MPF offsetting mechanism against long service payment in Hong Kong [New and Revised HKFRS Mandatorily Effective in the Current Year](index=6&type=section&id=%E6%96%BC%E6%9C%AC%E5%B9%B4%E5%BA%A6%E5%BC%B7%E5%88%B6%E7%94%9F%E6%95%88%E7%9A%84%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group applied amendments to HKFRS 17 (Insurance Contracts), HKAS 8 (Definition of Accounting Estimates), HKAS 12 (Deferred Tax and International Tax Reform), and HKAS 1 (Disclosure of Accounting Policies) this year - This year, amendments to HKFRS 17 (Insurance Contracts), HKAS 8 (Definition of Accounting Estimates), HKAS 12 (Deferred Tax and International Tax Reform), and HKAS 1 (Disclosure of Accounting Policies) were applied[9](index=9&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) Due to the abolition of the MPF offsetting mechanism against long service payment in Hong Kong, the Group changed its accounting policy, no longer applying the practical expedient in HKAS 19 paragraph 93(b) - Due to the abolition of the MPF offsetting mechanism against long service payment in Hong Kong, the Group changed its accounting policy, no longer applying the practical expedient in HKAS 19 paragraph 93(b)[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) - The accounting policy change led to the restatement of results and balances for the year ended December 31, 2022, impacting the 2023 consolidated statement of profit or loss and statement of financial position[13](index=13&type=chunk) [New and Revised HKFRS Issued But Not Yet Effective](index=8&type=section&id=%E5%B7%B2%E9%A0%92%E4%BD%86%E5%B0%9A%E6%9C%AA%E7%94%9F%E6%95%88%E7%9A%84%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group has not early adopted several new and revised HKFRS issued but not yet effective, and directors anticipate no significant impact on the consolidated financial statements from their future application - The Group has not early adopted several new and revised HKFRS issued but not yet effective, including amendments related to sales of assets between an investor and its associate, sale and leaseback, classification of current or non-current liabilities, supplier finance arrangements, lack of exchangeability, classification and measurement of financial instruments, and presentation and disclosure in financial statements[14](index=14&type=chunk) - The directors anticipate that the application of all new and revised HKFRS in the foreseeable future will not have a significant impact on the consolidated financial statements[15](index=15&type=chunk) [3. Basis of Preparation of Consolidated Financial Statements and Significant Accounting Policies Information](index=8&type=section&id=3.%20Basis%20of%20Preparation%20of%20Consolidated%20Financial%20Statements%20and%20Significant%20Accounting%20Policies%20Information) The Group's consolidated financial statements are prepared in accordance with HKFRS, but due to missing records from former directors, management used alternative methods; despite significant going concern uncertainties, the board deems the going concern basis appropriate given financial support and business disposal plans [3.1 Basis of Preparation of Consolidated Financial Statements](index=8&type=section&id=3.1%20Basis%20of%20Preparation%20of%20Consolidated%20Financial%20Statements) The consolidated financial statements are prepared in accordance with HKFRS and comply with the disclosure requirements of the Listing Rules and the Hong Kong Companies Ordinance - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and comply with the disclosure requirements of the Listing Rules and the Hong Kong Companies Ordinance[16](index=16&type=chunk) - Due to the inability to locate certain books, records, and supporting documents of Shanghai Ying Group and Shang Ying Group after the resignation of former executive director Mr. Yang Jun, the Board decided to consolidate these groups based on their carrying amounts of assets and liabilities as of June 30, 2023, and their results and cash flow data[18](index=18&type=chunk)[19](index=19&type=chunk) [Going Concern Basis](index=9&type=section&id=Going%20Concern%20Basis) Despite significant financial challenges including net loss and negative equity, the Board believes the going concern basis for financial statement preparation is appropriate, supported by a director's financial commitment and planned business disposals - As of December 31, 2023, the Group recorded a net loss of approximately **36,046 thousand HKD**, net current liabilities of approximately **45,931 thousand HKD**, and total liabilities exceeding total assets by approximately **16,172 thousand HKD**[19](index=19&type=chunk) - The Board believes that, with financial support of **50,000 thousand HKD** from non-executive director Mr. Zhang Mingqi and plans to dispose of Shanghai Ying Group and Shang Ying Group to eliminate related liabilities, preparing the consolidated financial statements on a going concern basis is appropriate[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Despite these plans, significant uncertainties regarding the Group's ability to continue as a going concern exist, and adjustments to asset values, liability provisions, and asset/liability classifications would be required if it cannot continue as a going concern[22](index=22&type=chunk) [4. Revenue](index=11&type=section&id=4.%20Revenue) The Group's total revenue for 2023 was 207,542 thousand HKD, a 43.5% increase from 2022, primarily driven by footwear product sales which constituted the vast majority of total revenue Revenue Breakdown (Thousand HKD) | Category | 2023 | 2022 | | :--- | :--- | :--- | | **Sales of Goods** | | | | Footwear Products | 203,336 | 141,396 | | Healthcare Products | — | 237 | | Financial Services | 4,104 | 2,540 | | Online Medical Services | 102 | 433 | | **Total Revenue** | **207,542** | **144,606** | | **Sales Channels** | | | | Retail | 198,507 | 136,164 | | Wholesale | 4,829 | 5,232 | | Internet | 102 | 670 | | Corporate | 4,104 | 2,540 | | **Timing of Revenue Recognition** | | | | At a point in time | 203,438 | 143,249 | | Over time | 4,104 | 1,357 | - Footwear product sales were the primary revenue source, reaching **203,336 thousand HKD** in 2023, accounting for over 98% of total revenue[23](index=23&type=chunk) - Healthcare product revenue decreased to **zero** in 2023, and online medical services revenue also significantly declined[23](index=23&type=chunk) [5. Operating Segments](index=11&type=section&id=5.%20Operating%20Segments) The Group's operating segments include trading footwear products, trading healthcare products, financial services, and online medical services; in 2023, the footwear segment saw significant revenue growth, while other segments continued to incur losses or shrink, with the Group's revenue and non-current assets primarily concentrated in Hong Kong [Segment Revenue and Results Analysis](index=12&type=section&id=Segment%20Revenue%20and%20Results%20Analysis) The footwear product segment shifted from profit to loss in 2023 despite revenue growth, while other segments continued to record losses or saw revenue decline Operating Segment Revenue and Results (Thousand HKD) | Segment | 2023 Revenue | 2023 Segment Results | 2022 Revenue (Restated) | 2022 Segment Results (Restated) | | :--- | :--- | :--- | :--- | :--- | | Trading Footwear Products | 203,336 | (9,780) | 141,396 | 32,454 | | Trading Healthcare Products | — | (2,388) | 237 | (3,310) | | Financial Services | 4,104 | (3,077) | 2,540 | (2,783) | | Online Medical Services | 102 | (4,460) | 433 | (10,183) | | **Total** | **207,542** | **(19,705)** | **144,606** | **16,178** | - The footwear product segment shifted from a profit of **32,454 thousand HKD** in 2022 to a loss of **9,780 thousand HKD** in 2023, despite revenue growth[27](index=27&type=chunk) - Healthcare products, financial services, and online medical services segments all recorded losses in 2023, with healthcare product revenue dropping to zero[27](index=27&type=chunk) [Geographical Information](index=14&type=section&id=Geographical%20Information) The Group's revenue and non-current assets are primarily concentrated in Hong Kong, with other regions contributing smaller portions Revenue by Geographical Region (Thousand HKD) | Region | 2023 | 2022 | | :--- | :--- | :--- | | Hong Kong | 190,644 | 135,062 | | Australia | — | 237 | | Macau | 16,796 | 8,874 | | Mainland China | 102 | 433 | | **Total** | **207,542** | **144,606** | Non-current Assets by Geographical Region (Thousand HKD) | Region | 2023 | 2022 | | :--- | :--- | :--- | | Hong Kong | 27,363 | 24,434 | | Mainland China | 7 | 11 | | Australia | 4 | 4 | | Macau | 2,484 | 84 | | **Total** | **29,858** | **24,533** | - Hong Kong is the Group's primary source of revenue, contributing **190,644 thousand HKD** in 2023[31](index=31&type=chunk) [Major Customers Information](index=14&type=section&id=Major%20Customers%20Information) No single customer accounted for more than 10% of the Group's total revenue in either the current or prior year - No single customer accounted for more than **10%** of the Group's total revenue in either year[32](index=32&type=chunk) [6. Loss/Profit Before Tax](index=15&type=section&id=6.%20Loss%2FProfit%20Before%20Tax) The Group's loss before tax for 2023 was 35,420 thousand HKD, primarily due to increased staff costs, depreciation, impairment loss on property, plant and equipment, and a decrease in net reversal of inventory provisions Loss/Profit Before Tax Components (Thousand HKD) | Item | 2023 | 2022 (Restated) | | :--- | :--- | :--- | | Total Staff Costs | 70,244 | 70,350 | | Auditor's Remuneration | 2,400 | 2,080 | | Net Reversal of Inventory Provisions | (17,985) | (23,472) | | Inventory Costs Recognized as Expense | 56,780 | 30,662 | | Depreciation of Property, Plant and Equipment | 14,158 | 12,017 | | Impairment Loss on Property, Plant and Equipment | 7,022 | 604 | - Net reversal of inventory provisions decreased from **23,472 thousand HKD** in 2022 to **17,985 thousand HKD** in 2023[33](index=33&type=chunk) - Impairment loss on property, plant and equipment significantly increased from **604 thousand HKD** in 2022 to **7,022 thousand HKD** in 2023[33](index=33&type=chunk) [7. Taxation](index=15&type=section&id=7.%20Taxation) The Group's tax expense for 2023 was 626 thousand HKD, mainly from Macau Complementary Tax and deferred tax, with no Hong Kong profits tax provision due to sufficient carried forward tax losses Tax Expense (Thousand HKD) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | — | — | | Current Tax - Macau Complementary Tax | 178 | — | | Deferred Tax | 448 | 898 | | **Total Tax** | **626** | **898** | - No provision for Hong Kong profits tax was made due to sufficient carried forward tax losses to offset estimated assessable profits for the current year[35](index=35&type=chunk) - Macau Complementary Tax is calculated at a rate of **12%**, with an exemption allowance of **600,000 Macau Patacas**[35](index=35&type=chunk) [8. Dividends](index=16&type=section&id=8.%20Dividends) The Board of Directors has resolved not to recommend a final dividend for the 2023 financial year, consistent with 2022 - No dividends were paid or proposed to ordinary shareholders of the Company for the year ended December 31, 2023, nor have any dividends been proposed for distribution since the end of the reporting period[36](index=36&type=chunk) [9. Loss/Earnings Per Share](index=16&type=section&id=9.%20Loss%2FEarnings%20Per%20Share) The Group's basic and diluted loss per share for 2023 was 0.13 HKD, primarily due to a loss attributable to owners of the company of 32,294 thousand HKD Loss/Earnings Per Share | Indicator | 2023 | 2022 (Restated) | | :--- | :--- | :--- | | Loss/Profit Attributable to Owners of the Company (Thousand HKD) | (32,294) | 8,047 | | Weighted Average Number of Ordinary Shares (Thousand Shares) | 242,845 | 242,845 | | Basic and Diluted Loss/Earnings Per Share (HKD) | (0.13) | 0.03 | - Basic and diluted loss/earnings per share were the same for 2023 and 2022 as no potential ordinary shares were issued during the year[37](index=37&type=chunk) [10. Trade and Other Receivables](index=17&type=section&id=10.%20Trade%20and%20Other%20Receivables) As of December 31, 2023, the Group's total trade receivables amounted to 8,804 thousand HKD, an increase from 2022, with the largest portion due within 30 days Ageing Analysis of Trade Receivables (Thousand HKD) | Ageing | 2023 | 2022 | | :--- | :--- | :--- | | Within 30 days | 8,398 | 5,541 | | 31 to 60 days | 196 | 1,163 | | 61 to 90 days | 210 | 530 | | Over 90 days | — | 478 | | **Total** | **8,804** | **7,712** | - The Group grants credit periods to trade customers ranging from **15 to 90 days**, depending on the type of business[38](index=38&type=chunk) [11. Trade and Other Payables](index=17&type=section&id=11.%20Trade%20and%20Other%20Payables) As of December 31, 2023, the Group's total trade payables amounted to 4,661 thousand HKD, a significant decrease from 2022, indicating some relief in short-term payment pressure Ageing Analysis of Trade Payables (Thousand HKD) | Ageing | 2023 | 2022 | | :--- | :--- | :--- | | Within 30 days | 2,769 | 1,350 | | 31 to 60 days | 215 | 10 | | 61 to 90 days | — | 3,868 | | Over 90 days | 1,677 | 4,274 | | **Total** | **4,661** | **9,502** | - Total trade payables in 2023 decreased by approximately **51%** compared to 2022, primarily due to a significant reduction in payables over 90 days[39](index=39&type=chunk) [12. Events After the Reporting Period](index=18&type=section&id=12.%20Events%20After%20the%20Reporting%20Period) After the reporting period, the Group experienced several significant events, including the commencement of bankruptcy liquidation proceedings for Shang Ying Internet Medical (Shanghai) Co., Ltd., and plans to dispose of Shanghai Ying Group, Shang Ying Group, and Shang Ying Capital Limited and its subsidiaries - Shang Ying Internet Medical (Shanghai) Co., Ltd., the primary entity providing online medical services, had its bankruptcy liquidation application accepted by the Shanghai Third Intermediate People's Court on April 29, 2024, with PwC appointed as the bankruptcy administrator on May 6, 2024[40](index=40&type=chunk) - The Group has entered into sale and purchase agreements with independent third parties to dispose of Shanghai Ying Group, Shang Ying Group, and Shang Ying Capital Limited and its subsidiaries; these disposals were not completed as of the date of approval of the consolidated financial statements[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - The bankruptcy of Shang Ying Medical resulted in the Group losing control over its assets and operations[40](index=40&type=chunk) [Report of the Directors](index=19&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) The Hong Kong economy recovered less than expected in 2023, but the retail sector saw a 16.2% increase in total sales value; the company's footwear business revenue grew by 43.8%, while other segments continued to shrink and deteriorate, leading to plans for disposal and a focus on footwear retail - The Hong Kong economy's recovery in 2023 was less than anticipated, but the total retail sales value increased by **16.2%** year-on-year, ending a three-year decline[43](index=43&type=chunk)[44](index=44&type=chunk) - The company's core footwear business revenue grew by **43.8%** to approximately **203 million HKD**, accounting for **98.0%** of the Group's total revenue, with same-store sales increasing by approximately **34.7%**[44](index=44&type=chunk) - The other three segments (financial services, Australian healthcare products, and online medical services) collectively accounted for only **2.0%** of the Group's total revenue, continuing to shrink and deteriorate, with Shang Ying Internet Medical (Shanghai) Co., Ltd. having entered bankruptcy proceedings[45](index=45&type=chunk) - Management intends to dispose of the Australian healthcare products business and the online medical services segment, actively seeking potential investors to resolve funding difficulties and focus on footwear retail development[45](index=45&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) In 2023, the Group's footwear business achieved rapid growth, but healthcare and online medical services remained in long-term loss and stagnation; future plans include diversifying footwear products, developing financial advisory services, and exploring new markets [Business Review and Future Development](index=21&type=section&id=Business%20Review%20and%20Future%20Development) In 2023, the Group's footwear business achieved rapid growth, but healthcare and online medical services remained in long-term loss and stagnation; future plans include diversifying footwear products, developing financial advisory services, and exploring new markets [Footwear Business](index=21&type=section&id=Footwear%20Business) The footwear business achieved significant revenue growth and increased same-store sales in 2023 - Footwear business revenue was approximately **203,300 thousand HKD**, an increase of **43.8%** compared to 2022[48](index=48&type=chunk) - Same-store sales increased by approximately **34.7%** (2022: decreased by approximately 2.1%)[48](index=48&type=chunk) [Healthcare Business](index=21&type=section&id=Healthcare%20Business) The healthcare business segment recorded zero revenue and a segment loss in 2023 due to business stagnation - Healthcare business segment revenue was **0 million HKD** (2022: approximately 200 thousand HKD), recording a segment loss of approximately **2,400 thousand HKD**[49](index=49&type=chunk) - The decrease in revenue was primarily due to business stagnation[49](index=49&type=chunk) [Financial Services Business](index=21&type=section&id=Financial%20Services%20Business) Dexing Group's financial services revenue increased, primarily from investment management and advisory services, while a subsidiary applied to reduce its regulated activities - Dexing Group's total revenue was approximately **4,100 thousand HKD** (2022: approximately 2,500 thousand HKD), mainly from investment management and advisory services[50](index=50&type=chunk) - DSG Securities (Hong Kong) Limited has applied to reduce its Type 1 regulated activity (dealing in securities)[50](index=50&type=chunk) [Online Medical Services Business](index=22&type=section&id=Online%20Medical%20Services%20Business) The online medical services business continued to deteriorate with declining revenue, and its main operating entity has entered bankruptcy proceedings in China - Online medical services business revenue was approximately **100 thousand HKD** (2022: approximately 400 thousand HKD), with business continuing to deteriorate[51](index=51&type=chunk) - The main operating entity, Shang Ying Medical, has entered bankruptcy proceedings in China[51](index=51&type=chunk) [Outlook](index=22&type=section&id=Outlook) Future strategies include diversifying footwear products, exploring new brand collaborations, and expanding financial advisory services into new markets like Singapore - Future focus will be on diversifying footwear products, exploring potential business collaborations, and introducing new brands with growth potential and high gross profit margins[52](index=52&type=chunk) - Dexing Group will continue to focus on developing its financing advisory business and exploring new market opportunities, such as Singapore[52](index=52&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) The Group's revenue grew by 43.5% in 2023, primarily driven by the footwear business; however, gross profit margin declined, and a significant reduction in other gains coupled with increased impairment losses led to a shift from profit to loss before tax [Revenue](index=22&type=section&id=Revenue) Total revenue increased by 43.5% in 2023, mainly driven by footwear sales, despite varied performance across different footwear brands and other business segments - Total revenue for the year was approximately **207,500 thousand HKD**, an increase of approximately **43.5%** compared to 2022, mainly due to increased footwear business revenue[53](index=53&type=chunk) - Footwear business revenue was approximately **203,300 thousand HKD**, an increase of approximately **43.8%** compared to 2022[54](index=54&type=chunk) - Sales of "Josef Seibel" footwear products increased by approximately **189.3%**, while "Clarks" footwear product sales decreased by approximately **10.9%**[55](index=55&type=chunk) - Financial services revenue was approximately **4,100 thousand HKD**, an increase of approximately **64%** compared to 2022[56](index=56&type=chunk) - Healthcare business revenue was approximately **zero million HKD**, a decrease of approximately **100%** compared to 2022[57](index=57&type=chunk) - Online medical services business revenue was approximately **100 thousand HKD**, a decrease compared to 2022[58](index=58&type=chunk) [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) Cost of sales increased in line with revenue, but its percentage of revenue has risen Cost of Sales (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Cost of Sales | 56,800 | 30,700 | | Percentage of Revenue | 27.4% | 21.2% | - The increase in cost of sales is consistent with the increase in revenue, but its percentage of revenue has risen[59](index=59&type=chunk) [Gross Profit](index=23&type=section&id=Gross%20Profit) Gross profit increased by 32.3% in 2023, but the gross profit margin declined from 78.8% to 72.6% Gross Profit and Gross Profit Margin (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Gross Profit | 150,700 | 113,900 | | Gross Profit Margin | 72.6% | 78.8% | - Gross profit increased by approximately **32.3%**, but the gross profit margin decreased from **78.8%** to **72.6%**[60](index=60&type=chunk) [Depreciation](index=23&type=section&id=Depreciation) Depreciation as a percentage of revenue decreased in 2023 compared to the previous year Depreciation as Percentage of Revenue | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Depreciation as Percentage of Revenue | 6.8% | 8.3% | [Staff Costs](index=24&type=section&id=Staff%20Costs) Total staff costs slightly decreased, but due to revenue growth, their percentage of revenue significantly declined Staff Costs (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Staff Costs | 70,200 | 70,400 | | Percentage of Revenue | 33.8% | 48.6% | - Total staff costs slightly decreased, but due to revenue growth, their percentage of revenue significantly declined[62](index=62&type=chunk) [Finance Costs](index=24&type=section&id=Finance%20Costs) Finance costs decreased in 2023, primarily comprising interest expenses from various borrowings and lease liabilities Finance Costs (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Finance Costs | 1,700 | 2,500 | - Finance costs primarily include interest expenses arising from trade-related finance loans, other borrowings, and lease liabilities, as well as imputed interest from loans from related companies[63](index=63&type=chunk) [Other Gains and Losses](index=24&type=section&id=Other%20Gains%20and%20Losses) Other net gains significantly decreased in 2023 due to the absence of substantial gains from property disposals recognized in the prior year Other Net Gains and Losses (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Other Net Gains | 600 | 33,100 | - Other net gains significantly decreased, mainly because approximately **33,000 thousand HKD** in gains from the disposal of properties under the footwear business were recognized in 2022, with no other gains recognized in the current year[64](index=64&type=chunk) [Loss/Profit Before Tax](index=24&type=section&id=Loss%2FProfit%20Before%20Tax) The Group shifted from a profit before tax in 2022 to a loss before tax in the current year, reflecting a deterioration in operating performance Loss/Profit Before Tax (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Loss/Profit Before Tax | (35,400) | 2,500 | - The Group shifted from a profit before tax in 2022 to a loss before tax in the current year, reflecting a deterioration in operating performance[65](index=65&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=Liquidity%20and%20Financial%20Resources) The Group primarily relies on internal cash flow, other borrowings, and bank borrowings for working capital; as of December 31, 2023, bank balances and cash increased, short-term bank borrowings decreased, but other borrowings and lease liabilities remained Liquidity Position (Thousand HKD) | Indicator | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Bank Balances and Cash | 40,000 | 33,600 | | Short-term Bank Borrowings | — | 5,000 | | Other Borrowings | 15,000 | 15,000 | | Lease Liabilities (Non-current) | 13,900 | 8,600 | - Bank balances and cash increased by approximately **18.9%**, while short-term bank borrowings decreased to zero[66](index=66&type=chunk) - Most bank deposits and cash are denominated in Hong Kong Dollars[66](index=66&type=chunk) [Pledged Assets](index=25&type=section&id=Pledged%20Assets) As of December 31, 2023, various assets including leasehold land, time deposits, investment properties, and life insurance policy deposits were pledged to secure the Group's borrowings and financing - Pledged assets include leasehold land and buildings, pledged time deposits, investment properties, and deposits and prepayments for life insurance policies[67](index=67&type=chunk) [Gearing Ratio](index=25&type=section&id=Gearing%20Ratio) The Group's gearing ratio turned negative to 92.8% as of December 31, 2023, reflecting that total liabilities exceeded total equity due to losses incurred Gearing Ratio | Indicator | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Gearing Ratio | -92.8% | 105.6% | - The gearing ratio turned negative, indicating that total liabilities exceeded total equity, reflecting higher financial risk[68](index=68&type=chunk) [Material Investments Held, Material Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures](index=25&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the year, the Group did not hold any material investments nor undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the year, the Group held no material investments and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures[69](index=69&type=chunk) [Treasury Policy](index=25&type=section&id=Treasury%20Policy) The Group's treasury policy focuses on enhancing operational control, minimizing borrowing costs, and maintaining adequate liquidity to meet short-term funding requirements efficiently - The Board will consider various funding sources based on the Group's capital requirements to ensure financial resources are utilized in the most cost-effective and efficient manner[70](index=70&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=Foreign%20Exchange%20Risk) The Group faces foreign exchange risk from multi-currency transactions, particularly with RMB and MOP, and monitors exchange rate fluctuations without using forward contracts for hedging - The Group's sales and purchases are primarily denominated in Hong Kong Dollars, Renminbi, Macau Patacas, Singapore Dollars, Euros, US Dollars, and Australian Dollars[73](index=73&type=chunk) - Renminbi is not freely convertible, and the Macau Pataca currency market is relatively small and undeveloped, with future exchange rates potentially fluctuating significantly[73](index=73&type=chunk) - As of December 31, 2023, the Group had not entered into any foreign currency forward contracts to hedge foreign exchange risk[74](index=74&type=chunk) [Human Resources](index=27&type=section&id=Human%20Resources) As of December 31, 2023, the Group employed 130 staff, with remuneration based on market practice, and conducted training to improve service quality Number of Employees | Year | Number of Employees | | :--- | :--- | | December 31, 2023 | 130 | | December 31, 2021 | 150 | - Remuneration packages are generally determined by reference to market practice and individual qualifications and experience[75](index=75&type=chunk) [Dividends](index=27&type=section&id=Dividends) The Board has decided not to recommend a final dividend for the current year, consistent with the prior year's decision - The Board has resolved not to recommend a final dividend for the current year (2022: nil)[76](index=76&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) Neither the Company nor its subsidiaries engaged in any purchase, sale, or redemption of the Company's listed securities during the year, and no treasury shares were held - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the year[77](index=77&type=chunk) - As of December 31, 2023, and the date of this announcement, the Company held no treasury shares[77](index=77&type=chunk) [Corporate Governance Practices](index=27&type=section&id=Corporate%20Governance%20Practices) The Board confirmed the Company's compliance with the corporate governance code provisions outlined in Appendix C1 of the Listing Rules for the current year - The Company has complied with the code provisions of Part 2 of the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the current year[78](index=78&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=27&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Model Code for Directors' securities transactions, and all directors confirmed their compliance with its standards throughout the current year - The Company has adopted the "Model Code for Securities Transactions by Directors of Listed Issuers" set out in Appendix C3 of the Listing Rules as its own code of conduct[79](index=79&type=chunk) - Following enquiry, the directors have confirmed that they have complied with the required standards set out in the Model Code throughout the current year[79](index=79&type=chunk) [Extracts from Independent Auditor's Report](index=28&type=section&id=Extracts%20from%20Independent%20Auditor%27s%20Report) The independent auditor issued a disclaimer of opinion on the Group's consolidated financial statements due to insufficient and inappropriate audit evidence [Disclaimer of Opinion](index=28&type=section&id=Disclaimer%20of%20Opinion) The auditor issued a disclaimer of opinion on the Group's consolidated financial statements due to the inability to obtain sufficient and appropriate audit evidence - The auditor was unable to obtain sufficient and appropriate audit evidence to provide an audit opinion on the consolidated financial statements[83](index=83&type=chunk) [Basis for Disclaimer of Opinion](index=28&type=section&id=Basis%20for%20Disclaimer%20of%20Opinion) The auditor's disclaimer of opinion stems from the loss of critical books and records for certain subsidiaries, preventing verification of asset and liability carrying amounts, results, and cash flows, particularly regarding loan impairment provisions - Due to the former directors' inability to locate certain books, records, and supporting documents of Shanghai Ying Group and Shang Ying Group, the auditor was unable to obtain sufficient and appropriate audit evidence[84](index=84&type=chunk)[85](index=85&type=chunk) - The auditor could not be satisfied with the carrying amounts of consolidated assets and liabilities presented in the consolidated statement of financial position, and the results and cash flows presented in the consolidated statement of profit or loss and other comprehensive income and consolidated statement of cash flows of Shanghai Ying Group and Shang Ying Group as of December 31, 2023[85](index=85&type=chunk) - Specifically, the auditor could not confirm whether the carrying amount of the loan to an associate of **44,001 thousand HKD** was materially misstated or whether the related impairment loss provision was sufficient[86](index=86&type=chunk) [Material Events After the Reporting Period](index=29&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) No other material events occurred after the reporting period, apart from those disclosed in Note 12 to the consolidated financial statements - No other material events occurred after the reporting period, apart from those disclosed in Note 12 to the consolidated financial statements and those mentioned above[87](index=87&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section includes acknowledgements and information regarding the continued suspension of trading for the Company's shares [Acknowledgements](index=30&type=section&id=Acknowledgements) The Board extends its gratitude to management, employees, shareholders, business partners, banks, and auditors for their unwavering support to the Group - The Board expresses its gratitude to the Group's management and all employees for their tireless efforts and dedication, and also thanks its shareholders, business partners and collaborators, bankers, and auditors for their strong support to the Group[88](index=88&type=chunk) [Continued Suspension of Trading](index=30&type=section&id=Continued%20Suspension%20of%20Trading) The Company's shares remain suspended from trading on the Stock Exchange since April 2, 2024, and will continue to be suspended until resumption guidance is met - The Company's shares have been suspended from trading on the Stock Exchange since 9:00 a.m. on April 2, 2024[89](index=89&type=chunk) - Trading in the shares will remain suspended until the resumption guidance is met[89](index=89&type=chunk) - Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Company's securities[90](index=90&type=chunk)

年度報告 2024 年度報告 Annual Report 2024 Annual Report Contents 目錄 Financial Highlights 財務摘要 2 6 3 Five Years Financial Summary 五年財務摘要 4 Chairman's Statement 主席報告 Management Discussion and Analysis 管理層討論及分析 16 Directors' Report 董事會報告 86 Corporate Governance Report 企業管治報告 111 Independent Auditor's Report 獨立核數師報告 118 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收益表 120 Consolidated Statement of Financial Position 綜合財務狀況表 122 Consolidated Statement of Changes in Equity 綜合權益變動表 124 ...