华康生物医学(08622) - 2024 - 中期财报

Corporate Information The report provides core corporate information including board members, committee compositions, principal office addresses, and legal advisors as of mid-2024, noting changes such as Mr. Chan Kin Sang's resignation and Dr. Bu Su's appointment - The report provides core corporate information as of mid-2024, including board members, committee compositions, principal office addresses, and legal advisors, with changes noted such as Mr. Chan Kin Sang's resignation and Dr. Bu Su's appointment[6][7] Management Discussion and Analysis Business Review The Group's core operations are divided into Biologics and Assisted Reproductive Products, and Health Products and Supplements, with core In Vitro Diagnostic (IVD) reagent revenue growing by 4.5% driven by male infertility IVD reagents, alongside plans to diversify into enzyme-based products via online and B2B platforms - The Biologics and Assisted Reproductive Products segment is the company's core business, focusing on the Chinese male infertility In Vitro Diagnostic (IVD) reagent market with a portfolio of 30 biologics[9][12] Biologics Segment Revenue Performance | Item | Change Amount (RMB) | Growth Rate | | :--- | :--- | :--- | | Revenue Growth during the period | Approx. 516,000 | 4.5% | - The Health Products and Supplements segment has expanded to China, Hong Kong, and Canada, with plans to develop e-commerce and B2B trade for enzyme-based products to seek new growth opportunities[10][13] Future Prospects Looking ahead, the Group's strategic focus is on continuous R&D for diagnostic tests, especially immunoassay-based Point-of-Care Testing (POCT), while actively seeking partnerships to strengthen the health products business and advance enzyme-based product trade to diversify operations and enhance shareholder returns - The Group's future strategic priorities include: * Continuous research and development of Point-of-Care Testing (POCT) technology * Seeking partnerships to strengthen the health products business * Developing trade in enzyme-based products[14][16] Financial Review In H1 2024, the Group's total revenue slightly increased by 4.0% to RMB 11.9 million, driven by biologics sales, with gross profit up 5.9% and gross margin at 67.0%, but a 25.0% surge in R&D expenses led to an expanded loss of RMB 1.8 million and basic loss per share of RMB 0.38 cents Key Financial Indicators for H1 2024 (RMB) | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. 11.9 million | Approx. 11.5 million | +4.0% | | Gross Profit | Approx. 8.0 million | Approx. 7.5 million | +5.9% | | Gross Margin | 67.0% | 65.8% | +1.2 p.p. | | R&D Expenses | Approx. 2.0 million | Approx. 1.6 million | +25.0% | | Loss for the Period | Approx. 1.8 million | Approx. 1.5 million | +20.0% | | Basic Loss Per Share | 0.38 cents | 0.35 cents | +8.6% | Use of Proceeds from Placing In H1 2024, the company completed three share placings, raising a net of approximately HKD 8.13 million (RMB 7.5 million) primarily for the Group's working capital outside China, with proceeds from the first two placings fully utilized and the third partially used, expected to be fully deployed by year-end 2024 Overview of 2024 Placing Activities | Placing Order | Completion Date | Number of Shares Placed | Net Proceeds (HKD) | Use and Status | | :--- | :--- | :--- | :--- | :--- | | First | January 31, 2024 | 20,000,000 | Approx. 1.99 million | Fully utilized for general working capital outside China | | Second | March 21, 2024 | 31,000,000 | Approx. 3.18 million | Fully utilized for general working capital outside China | | Third | April 23, 2024 | 31,000,000 | Approx. 2.96 million | Partially utilized, expected to be fully utilized by year-end | Liquidity, Financial Resources and Capital Structure As of June 30, 2024, the Group's financial position remained robust, with cash and bank balances increasing to RMB 36.7 million due to share placings, the capital gearing ratio (based on lease liabilities) decreasing from 4.5% to 3.1%, indicating lower financial leverage, and total equity rising to RMB 56.5 million Financial Position Summary (RMB) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Bank Balances | Approx. 36.7 million | Approx. 32.9 million | | Lease Liabilities | Approx. 1.7 million | Approx. 2.3 million | | Capital Gearing Ratio | 3.1% | 4.5% | | Total Equity | Approx. 56.5 million | Approx. 51.0 million | Other Disclosures During the reporting period, no share options were granted, exercised, or forfeited, with 19,504,000 outstanding options; the company had no significant acquisitions, disposals, investments, or asset pledges, and the board did not recommend an interim dividend, while the number of full-time employees decreased to 90 as of June 30, 2024 - As of June 30, 2024, the company had 19,504,000 outstanding share options, with no changes during the reporting period[29][30] - During the reporting period, the Group had no significant acquisitions or disposals, no major investments, no asset pledges, and no material capital commitments or contingent liabilities[48] - The Board did not recommend the payment of any dividend for the six months ended June 30, 2024[49] - As of June 30, 2024, the Group had 90 full-time employees, a decrease from 96 at the end of 2023[39] Other Information Directors' and Shareholders' Interests As of June 30, 2024, Chairman Mr. Zhang Shuguang held 28.5% of the company's shares through his controlled corporation, Crystal Grant Limited, making him the largest shareholder, while Kokusai Limited held 24.1%, and TGGA, LLC held pledged share interests from both Crystal Grant and Kokusai as a chargee Major Directors' Shareholdings (Long Position) | Director Name | Nature of Interest | Total Interest | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Zhang Shuguang | Interest of controlled corporation/Beneficial owner | 142,672,000 | 28.5% | | Mr. Zhang Chunguang | Beneficial owner | 4,000,000 | 0.8% | | Mr. Pan Lixian | Beneficial owner | 4,000,000 | 0.8% | | Mr. He Jiaming | Beneficial owner | 4,000,000 | 0.8% | Major Shareholders' Shareholdings (Long Position) | Shareholder Name | Nature of Interest | Total Interest | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Crystal Grant | Beneficial owner | 142,672,000 | 28.5% | | Kokusai Limited | Beneficial owner | 120,752,000 | 24.1% | | TGGA, LLC | Person with security interest in shares | 259,424,000 | 51.8% | Corporate Governance The company complied with the GEM Listing Rules' Corporate Governance Code during the reporting period, with the Board committed to maintaining high standards and reviewing internal control systems, and the Audit Committee having reviewed the unaudited interim financial results, deeming their preparation compliant with applicable accounting standards and disclosure requirements - The company adopted and complied with the Corporate Governance Code during the reporting period, and the Board will continue to monitor and review related practices[64] - The company adopted a standard code for directors' securities transactions no less exacting than required by the GEM Listing Rules, and all directors confirmed compliance with this standard[66] - The Audit Committee reviewed this interim financial report, deeming its preparation compliant with accounting standards and listing rules, with adequate disclosures made[79][80] Unaudited Condensed Consolidated Financial Statements Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the company reported revenue of RMB 11.918 million, a 4.0% YoY increase, with gross profit at RMB 7.989 million; however, increased selling, administrative, and R&D expenses led to an expanded loss before tax of RMB 1.779 million, and a loss attributable to owners of the company of RMB 1.779 million, compared to RMB 1.455 million in the prior period Condensed Consolidated Statement of Profit or Loss Summary (RMB thousands) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 11,918 | 11,465 | | Gross Profit | 7,989 | 7,544 | | Selling and Distribution Expenses | (3,901) | (3,763) | | Administrative Expenses | (4,258) | (4,206) | | Research and Development Expenses | (1,998) | (1,599) | | Loss Before Tax | (1,779) | (1,399) | | Loss for the Period | (1,779) | (1,455) | | Total Comprehensive Expenses | (2,015) | (1,780) | Statement of Financial Position As of June 30, 2024, the Group's total assets were RMB 66.786 million and total liabilities were RMB 10.289 million; net current assets increased to RMB 46.664 million from RMB 40.340 million at year-end 2023, and total equity rose to RMB 56.497 million due to share placings Statement of Financial Position Summary (RMB thousands) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 10,444 | 11,879 | | Current Assets | 56,342 | 53,436 | | Total Assets | 66,786 | 65,315 | | Current Liabilities | 9,678 | 13,096 | | Non-current Liabilities | 611 | 1,200 | | Total Liabilities | 10,289 | 14,296 | | Net Assets/Total Equity | 56,497 | 51,019 | Statement of Cash Flows In H1 2024, the Group experienced a net cash outflow of RMB 2.819 million from operating activities and RMB 0.122 million from investing activities; however, financing activities generated a net cash inflow of RMB 6.897 million due to share placings, resulting in an increase in cash and cash equivalents to RMB 36.655 million at period-end Statement of Cash Flows Summary (RMB thousands) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | (2,819) | 39 | | Net Cash from Investing Activities | (122) | (516) | | Net Cash from Financing Activities | 6,897 | (356) | | Net Increase in Cash and Cash Equivalents | 3,956 | (833) | | Cash and Cash Equivalents at Beginning of Period | 32,935 | 33,303 | | Cash and Cash Equivalents at End of Period | 36,655 | 32,142 | Notes to the Financial Statements The notes to the financial statements provide detailed explanations of key accounting items, with Note 4 disclosing revenue composition, showing male infertility IVD reagents as the primary source, accounting for approximately 80.6% of total revenue; segment information indicates the Biologics segment contributed all revenue and most profit, while the Health Products segment recorded a loss, and Note 14 reveals a long aging of trade receivables, with over 32.6% outstanding for more than 181 days H1 2024 Revenue Composition (RMB thousands) | Product Category | Revenue | Percentage | | :--- | :--- | :--- | | Male Infertility IVD Reagents | 9,606 | 80.6% | | Parasite Series Test Reagents | 1,358 | 11.4% | | EB Virus Test Reagents | 310 | 2.6% | | Assisted Reproductive Products and Equipment | 644 | 5.4% | | Total | 11,918 | 100.0% | Segment Results (RMB thousands) | Segment | H1 2024 Revenue | H1 2024 Results | | :--- | :--- | :--- | | Biologics and Assisted Reproductive Products | 11,918 | 547 | | Health Products and Supplements | – | (705) | - Trade receivables aging analysis shows that as of June 30, 2024, net receivables over 181 days old amounted to RMB 3.146 million, representing 32.6% of the total[125] - The company issued 82,000,000 new shares through three placings in H1 2024, bringing the total number of issued shares to 500,472,000[132]