Revenue Performance - For the six months ended June 30, 2021, the revenue from the sales of biological reagents and auxiliary reproductive supplies and equipment increased by approximately 45.3% compared to the corresponding period in 2020[18]. - The Group's revenue increased by approximately RMB5.0 million, or approximately 68.9%, to approximately RMB12.2 million during the Reporting Period compared to approximately RMB7.2 million during the Corresponding Period[33]. - Sales of male fertility IVD reagents accounted for approximately 80.9% of total revenue in the biological reagents and auxiliary reproductive supplies segment, generating approximately RMB10.5 million, a 45.3% increase from RMB7.2 million in the Corresponding Period[34]. - The healthcare products and supplements segment generated approximately RMB1.7 million in revenue during the Reporting Period, marking its first contribution as there was no such business in the Corresponding Period[35]. - Revenue for the three months ended June 30, 2021, was RMB 7,284,000, compared to RMB 5,152,000 for the same period in 2020, representing an increase of 41.3%[165]. - Revenue from biological reagents sales was RMB 8,473,000, up from RMB 6,109,000 in the previous year, reflecting a growth of 38.8%[191]. - Revenue from healthcare products and supplements amounted to RMB 1,697,000, compared to zero in the same period last year, indicating a new revenue stream[191]. - Distributors contributed RMB 7,334,000 to total revenue for the six months ended June 30, 2021, compared to RMB 3,655,000 in 2020, marking a 100.5% increase[192]. - Non-distributors generated RMB 4,838,000 in revenue, up from RMB 3,553,000, representing a growth of 36.1%[192]. Financial Performance - The significant revenue increase during the Reporting Period was attributed to the absence of production and sales halts that occurred in the previous year due to the COVID-19 epidemic[18]. - The financial performance reflects a recovery from the impacts of the COVID-19 pandemic experienced in the previous year[18]. - The Group recorded a gross profit of approximately RMB7.6 million, representing a significant increase of approximately RMB2.4 million, or approximately 46.6%, from approximately RMB5.2 million during the Corresponding Period[42]. - The gross profit margin decreased from approximately 71.6% in the Corresponding Period to approximately 62.2% during the Reporting Period, primarily due to lower margins in the healthcare products and supplements segment[43]. - The loss for the period attributable to owners of the Company was approximately RMB2.0 million, a decrease from approximately RMB6.1 million in the Corresponding Period, mainly due to increased revenue and no equity-settled share-based expenses[56]. - Basic loss per share for the reporting period was RMB 0.51, compared to RMB 1.53 in the corresponding period[61]. - The total comprehensive expense attributable to the owners of the Company for the six months ended June 30, 2021, was RMB 2,026,000, compared to RMB 6,110,000 for the same period in 2020, showing a reduction of 66.9%[165]. - The overall loss before taxation decreased to RMB 1,926,000 in 2021 from RMB 6,107,000 in 2020, reflecting an improvement of 68.4%[198]. - The loss for the period was reported at RMB 2,049,000 in 2021, down from RMB 6,107,000 in 2020, indicating a reduction of 66.5%[198]. Expenses and Costs - Selling and distribution expenses increased by approximately RMB963,000 or approximately 34.4%, from approximately RMB2.8 million to approximately RMB3.8 million during the Reporting Period, driven by increased sales and marketing activities[47]. - Research and development expenses increased slightly from approximately RMB1.1 million to approximately RMB1.3 million during the Reporting Period[54]. - Administrative expenses decreased slightly from approximately RMB4.4 million in the previous year to approximately RMB4.3 million during the reporting period[58]. - The company incurred administrative expenses of RMB 1,657,000 in 2021, a decrease from RMB 2,544,000 in 2020, showing a reduction of 34.8%[198]. - Research and development expenses for the six months ended June 30, 2021, were RMB 1,270,000, compared to RMB 1,112,000 for the same period in 2020, an increase of 14.2%[165]. - The company did not report any equity-settled share-based payment expenses in 2021, while it had expenses of RMB 2,660,000 in 2020[198]. Corporate Governance and Management - The Company was listed on GEM of the Stock Exchange on December 13, 2018, offering 100,000,000 new shares at HK$0.5 per share[16]. - The Board is committed to high corporate governance standards and has adopted the Corporate Governance Code during the reporting period[149]. - The Board conducted reviews of the internal control system to ensure its effectiveness and adequacy[150]. - The company has adopted a code of conduct regarding securities transactions by the Directors, confirming compliance during the Relevant Period[154]. - The company will continue to monitor and review its corporate governance practices to ensure compliance with the Corporate Governance Code[149]. Future Outlook and Strategy - The Group continues to focus on research and development to expand its product range in the IVD sector[17]. - The management is optimistic about future growth prospects in the male fertility IVD market in the PRC[18]. - The Group plans to optimize product design and develop more healthcare-related products, including a children's gummy series and essential nutrients for pregnancy in powder form[28]. - The Group expects greater demand for male fertility IVD reagents and fertility supplements due to the PRC government's three-child policy implemented in May 2021[32]. Cash Flow and Financial Position - As of June 30, 2021, the Group recorded total cash and bank balances of approximately RMB39.8 million, a decrease from approximately RMB41.9 million as of December 31, 2020, primarily due to operating and R&D expenses[83]. - The net cash used in operating activities was RMB 1,889,000 for the six months ended June 30, 2021, an improvement from RMB 5,021,000 in the same period of 2020[171]. - Cash and cash equivalents at the end of the period were RMB 39,800,000, down from RMB 41,944,000, reflecting a decrease of 5.1%[171]. - Total equity decreased to RMB 59,833,000 from RMB 61,859,000, representing a decline of 3.3%[168]. - The company incurred a loss for the period amounting to RMB 2,049,000 for the six months ended June 30, 2021[170]. - The company’s lease liabilities decreased to RMB 1,659,000 from RMB 1,406,000, indicating an increase of 17.9%[167]. - The company’s reserves decreased to RMB 56,324,000 from RMB 58,350,000, a decline of 3.5%[168]. Shareholding and Directors - As of June 30, 2021, Mr. Zhang Shuguang held 240,000,000 ordinary shares and 4,000,000 share options, representing a total interest of 61.0% in the Company[124]. - Mr. Zhang Chunguang, Mr. Poon Lai Yin Michael, and Mr. He Jiaming each held 4,000,000 share options, representing 1.0% of the total shareholding[124]. - The total number of shares in issue as of June 30, 2021, was 400,000,000[125]. - The interests of the Directors and chief executive in the shares and debentures of the Company must be notified to the Company and the Stock Exchange under the Securities and Futures Ordinance[129]. - No significant transactions or contracts involving Directors or controlling shareholders were reported during the reporting period[117][119]. - The company has no changes in Directors' information that require disclosure[141].
华康生物医学(08622) - 2021 - 中期财报