Financial Performance - For the year ended December 31, 2020, the Group recorded revenue of approximately RMB 14.0 million, a slight increase from RMB 13.8 million in the corresponding period of 2019[18]. - For the year ended December 31, 2020, the Group's revenue decreased by approximately RMB3.5 million, or approximately 13.7%, from approximately RMB25.5 million in 2019 to approximately RMB22.0 million in 2020[45]. - The Group recorded revenue of approximately RMB14.0 million in the second half of 2020 in China, slightly up from approximately RMB13.8 million in the same period of 2019[21]. - Revenue for the year ended December 31, 2020, decreased by approximately RMB3.5 million or approximately 13.7% to approximately RMB22.0 million from approximately RMB25.5 million for the year ended December 31, 2019[48]. - Gross profit for the year ended December 31, 2020, was approximately RMB14.7 million, a decrease of approximately RMB3.2 million or approximately 17.9% from approximately RMB17.9 million in 2019[52]. - The gross profit margin remained stable at approximately 67.0% for the year ended December 31, 2020, compared to approximately 70.2% in 2019[53]. - Other income increased by approximately RMB390,000 or approximately 150.0% to approximately RMB650,000 for the year ended December 31, 2020, primarily due to government grants related to COVID-19[54]. - The loss attributable to owners of the Company was approximately RMB11.6 million for the year ended December 31, 2020, compared to approximately RMB284,000 in 2019[70]. - Basic loss per share for the year was RMB2.91 cents, compared to RMB0.07 cents for the year ended December 31, 2019[71]. - The adjusted loss before tax for the year ended December 31, 2020, was approximately RMB6.2 million, compared to RMB284,000 for the previous year[74]. Impact of COVID-19 - The COVID-19 epidemic caused a halt in production and sales for over five weeks, significantly impacting business in the first half of 2020[18]. - The Group's factory in China halted production and sales for over five weeks due to the Epidemic, significantly affecting sales from ultimate end customers[33]. - Sales of biological reagents, including male fertility IVD reagents, decreased sharply to approximately RMB19.8 million in 2020 compared to approximately RMB24.2 million in 2019, reflecting a significant impact from the Epidemic[46]. Research and Development - The Group intends to purchase equipment for research and development of the supporting test platform in the future[19]. - The Group has ten recent research projects focused on diagnosing male and female infertility, with plans to complete medical device registration for some projects to be launched in 2021[39]. - The Group intends to further invest in the research and development of POCT, including purchasing raw materials and setting up a new production line for expansion[42]. - The Group completed clinical trials for the sperm nuclear DNA integrity reagent and is proceeding with Class II medical device registration[124]. - The Group submitted Class II medical device registration for improved products, including the "seminal plasma fructose quantitative assay kit" and "seminal plasma neutral alpha-glucosidase quantitative assay kit," which are currently under approval[126]. Sales and Distribution - The Group recognized strong demand for rapid Point-Of-Care diagnostic testing (POCT) and began preliminary selection and evaluation of a supporting test platform in the second half of 2020[19]. - The Group sold products to 22 new direct sale customers and 73 new distributors during the year ended December 31, 2020, expanding its sales channels despite the challenges posed by the Epidemic[37]. - The Group established a new company, Smartronic Limited, holding 49% equity, to facilitate the sales and distribution of Nutronic's supplements through cross-border e-commerce channels in the PRC[25]. - The Group has been granted a total of 23 natural health product licenses for its registered brand "Nutronic" in Canada, with products distributed through various e-commerce platforms[38]. Employee and Management - The Group had 80 full-time employees as of December 31, 2020, an increase from 73 in 2019, with staff costs recognized in profit or loss amounting to approximately RMB 13.7 million[86]. - The Group's existing staff temporarily took on additional responsibilities due to the inability to hire suitable personnel[128]. - The Group recruited 4 sales and marketing personnel and 2 technicians by December 31, 2020, but was unable to meet the expected hiring numbers due to market constraints[132]. - As of December 31, 2020, the Group filled positions for 2 R&D personnel, 2 technicians, and 2 production workers, but faced challenges in hiring due to a limited supply of suitable candidates in the market[128]. Share Options and Financial Management - The Company adopted a Share Option Scheme on January 13, 2020, to incentivize employees and assist in recruitment and retention[135]. - A total of 26,008,000 share options were granted on April 9, 2020, at an exercise price of HK$0.125 per share, with options exercisable until April 8, 2030[136]. - The fair value of the share options granted on April 9, 2020, was approximately RMB 2,660,000, recognized as equity-settled share-based payment expenses[145]. - The expected life of the share options is ten years, with an expected volatility of 103.1%[145]. - The actual utilization of net proceeds included RMB 4,710,000 for developing new products, which accounted for 41.5% of the total proceeds[115]. - The Group allocated RMB 4,011,000 (27.3% of total proceeds) for expanding its sales network and enhancing marketing activities[115]. Corporate Governance - The Group did not recommend payment of a final dividend for the year ended December 31, 2020, consistent with the previous year[78]. - As of December 31, 2020, the Group had no significant contingent liabilities or outstanding corporate guarantees[103]. - As of December 31, 2020, the Group had no outstanding company guarantees or significant contingent liabilities, consistent with the previous year[108]. - No significant events affecting the company occurred from December 31, 2020, to the date of the report[146]. Management Experience - The company’s executive directors have extensive experience in the IVD reagents industry, with over 15 years for Mr. Zhang Shuguang and over 10 years for Mr. Zhang Chunguang[151][154]. - Mr. Pan, the CFO, has over 20 years of experience in financial reporting, business advisory, auditing, accounting, tax, and mergers and acquisitions[161]. - Dr. Chow has more than 20 years of experience in biomedical testing and molecular diagnostics technology, leading commercialization efforts at Thunderbio[169]. - Dr. Cheng has over 25 years of experience in financial reporting, business advisory, auditing, accounting, tax investigation, and liquidation[174]. - Mr. Chan has over 30 years of experience in legal practice in Hong Kong and is currently a partner at Peter K.S. Chan & Co.[181].
华康生物医学(08622) - 2020 - 年度财报