Financial Performance - The Group reported a loss of approximately HK$162.9 million for the year, primarily due to a non-cash loss of about HK$133.0 million from fair value changes in financial assets, compared to a gain of HK$158.6 million in the previous year[17]. - The Group's revenue for the year was approximately HK$59.1 million, a decrease of about HK$13.5 million from HK$72.6 million in 2023, while gross profit was about HK$28.8 million, down by approximately HK$2.4 million from HK$31.1 million in 2023[27][29]. - The Group's operating loss before income tax was about HK$159.5 million, compared to a profit of about HK$130.9 million last year, primarily due to non-cash items including a fair value loss of approximately HK$133.0 million on investments in convertible bonds[32]. - The loss attributable to owners of the Company was about HK$162.9 million, representing a decrease of about HK$292.2 million compared to a profit of about HK$129.3 million last year, mainly due to the non-cash loss from fair value changes[33]. - The Group's administrative, selling, and distribution expenses decreased to about HK$35.3 million, a reduction of about HK$7.1 million or 16.7% compared to HK$42.4 million last year[31]. - The Group reported a net loss of approximately HK$131.9 million in other income and gains, a decrease of about HK$293.5 million compared to a gain of HK$161.7 million in 2023, primarily due to a non-cash loss from fair value changes of financial assets[72]. Market and Industry Trends - China's economy achieved a full-year growth of 5.2% in 2023, up from 3% in 2022, indicating a steady recovery supported by national policies[11][12]. - The pharmaceutical industry in China is undergoing reforms aimed at optimizing centralized procurement and expanding medical insurance coverage, which may impact sales margins in the short term[12]. - The pharmaceutical industry in China is experiencing stable and positive development, driven by healthcare reforms, centralized procurement optimization, and expanded medical insurance coverage[26][28]. - The pharmaceutical industry in China is expected to navigate quality development through structural transformation and efficiency improvement, driven by increasing market demand and public health awareness[80]. - The market demand for quality diabetes drugs in China is expected to be enormous due to the aging population and increasing prevalence of diabetes[65]. Strategic Focus and Development - The Group is focusing on enhancing its core competitiveness in response to intensified market competition by optimizing manufacturing strengths[16]. - The Group aims to capitalize on the increasing demand for quality pharmaceuticals due to the aging population and rising healthcare needs in China[20]. - The Group continues to seek potential growth opportunities while managing business challenges in a competitive market environment[20][26]. - The Group remains cautiously optimistic about its long-term development while adopting flexible strategies to address challenges[18]. - The Group is focused on enhancing production capability and capacity in the pharmaceutical manufacturing sector to strengthen fundamentals and pursue sustainable development[44]. - The Group is committed to high standards of corporate governance, adhering to the Corporate Governance Code during the year ended March 31, 2024[142]. Research and Development - The Group holds a 49% equity interest in Smart Ascent Limited, which is involved in an in-process R&D project for an oral insulin product currently in clinical trials[53]. - The commercialization timeline for the Product has been reassessed and is now expected around the first quarter of 2026[61]. - The ongoing R&D for a diabetes product is expected to generate economic benefits over a ten-year period post-commercialization, with significant market potential[69]. - The clinical trial for the Product faced delays due to the Covid-19 pandemic, but patient selection and enrollment are ongoing as the situation improves[60]. - The Group's share of loss related to the Product's R&D expenses decreased by approximately HK$1.5 million, primarily due to reduced research and development expenditures[62]. Corporate Governance and Management - The Company has not established a dividend policy, believing it more appropriate to determine dividend payments based on financial performance, operating and capital requirements, and market conditions[147]. - The Company has adopted the Model Code for Securities Transactions by Directors, and all directors have complied with the required standards throughout the year ended March 31, 2024[149]. - The Company has established three Board committees: the Nomination Committee, Remuneration Committee, and Audit Committee, with all INEDs as members[153]. - The Company believes that adequate balance of power exists despite the roles of Chairman and Chief Executive Officer being held by the same person, as major decisions are made in consultation with the Board[144]. - The Company will continue to review and improve its corporate governance practices as circumstances demand[148]. Workforce and Employee Management - As of March 31, 2024, the Group employed 159 staff, a decrease from 181 in 2023, reflecting a reduction in production labor and operational streamlining[105]. - Employee costs for the year ending March 31, 2024, were approximately HKD 19.7 million, down from HKD 21.1 million in 2023, indicating a cost reduction strategy[105]. - The Group's operational adjustments have led to a decrease in both employee numbers and costs, aligning with industry practices for remuneration and benefits[105]. - The Group continues to provide various training opportunities for employees, ensuring compliance with current labor laws[105]. - The Group's management emphasizes the importance of high-caliber professionals for long-term growth, supported by the share option scheme[108].
精优药业(00858) - 2024 - 年度财报