Financial Performance - The Group recorded revenue of approximately HK$11.1 million for the Financial Period, an increase of approximately 10.7% from HK$10.1 million in the Previous Financial Period[8]. - Loss attributable to the owners of the Company decreased to approximately HK$110.48 million, representing a decrease of approximately 35.39% from the loss of HK$171.28 million in the Previous Financial Period[8]. - The comparative decrease in loss for the Financial Period was primarily due to less change in fair value of investments in convertible bonds and reduced impairment loss[18]. - Revenue from the trading of beauty equipment and products amounted to approximately HK$11.1 million, representing an increase of approximately 10.7% from HK$10.7 million in the previous financial period[20]. - The Group's total revenue for the financial period was approximately HK$11.1 million, up from approximately HK$10.1 million in the previous financial period, marking an increase of about 10.7%[21]. - Loss attributable to owners decreased to HK$110.48 million, down from HK$171.28 million in the previous financial year, primarily due to fair value changes of convertible bond investments and reduced impairment losses on an associate[21]. - The gross profit for the period was HK$1,052,000, compared to HK$906,000 in the previous year, indicating a gross profit margin improvement[85]. - The loss before tax for the period was HK$111,296,000, a decrease from a loss of HK$173,306,000 in the same period of 2018, reflecting a reduction in losses by approximately 35.7%[85]. - Total comprehensive expense for the period was HK$111,828,000, down from HK$173,969,000 in the prior year, showing a significant improvement[87]. - Basic loss per share for the period was HK(7.55), an improvement from HK(11.70) in the same period of 2018[89]. Business Development - The increase in revenue was primarily due to heightened business activity in the trading of beauty equipment and products segment during the Financial Period[18]. - The Group is developing a technology for oral insulin administration, currently in the research and development stage, with plans to commence Phase III clinical trials[12]. - The Group aims to commercialize the oral insulin product by early 2022[12]. - The Group expects the oral insulin product to commence generating revenue by January 2022[30]. - The Group will allocate additional human resources to the oral insulin project and strengthen the project team to ensure timely completion of the in-process R&D[33]. - The Group's management remains optimistic about long-term market recovery while being cautious about near-term market directions[33]. - The Group's trading segment has shown stable revenues and profit margins, but recent political issues and trade conflicts may impact future performance[33]. - The Group's revenue segments include trading of beauty equipment and products, securities investment, and research and development, indicating a diversified business model[118]. Risk Management - The recent political issues in Hong Kong and trade conflicts between China and the US are expected to impact the trading segment of the business[11]. - The Group will enhance its risk management policy and adopt timely measures to balance risk and return[11]. - The Group will reinforce its risk management policy and proactively adopt measures to balance risks and long-term returns in its trading business[33]. Financial Position - As of September 30, 2019, the Group had bank and cash balances of approximately HK$44.6 million, an increase from approximately HK$17.1 million as of March 31, 2019[37]. - Total borrowings of the Group were approximately HK$822.9 million as of September 30, 2019, up from approximately HK$755.5 million as of March 31, 2019[37]. - The current assets to current liabilities ratio decreased to 0.91 as of September 30, 2019, compared to 1.37 as of March 31, 2019[39]. - The Group's gearing ratio increased to 0.59 as of September 30, 2019, from 0.50 as of March 31, 2019, with total liabilities of approximately HK$901.4 million and total assets of approximately HK$1,584.4 million[39]. - The Group's total liabilities increased to approximately HK$901.4 million as of September 30, 2019, from approximately HK$783.9 million as of March 31, 2019[40]. - The company's total equity as of September 30, 2019, was HK$682,984,000, down from HK$794,812,000 as of March 31, 2019[98]. - Non-current liabilities increased to HK$818,992,000 from HK$751,540,000 as of March 31, 2019, primarily due to an increase in convertible bonds[93]. Corporate Governance - The company has not established a dividend policy, considering it more appropriate to determine dividend payments based on financial performance, operating and capital requirements, and market conditions[56]. - The company has adopted the Model Code for Securities Transactions by Directors and confirmed full compliance by all directors throughout the financial period[57]. - The Audit Committee, consisting of three independent non-executive directors, has reviewed the group's unaudited interim financial statements for the financial period[58]. - The company has complied with the Corporate Governance Code except for deviations in provisions A.2.1, A.4.1, and E.5.1[54]. - The role of chief executive officer remains vacant, and the company is actively seeking a suitable candidate for this position[54]. - Non-executive directors are subject to retirement by rotation and re-election at least once every three years, but were not appointed for specific terms[54]. - The company believes sufficient measures have been taken to represent the long-term interests of the company and its shareholders despite the absence of specified terms for non-executive directors[54]. - The company has established an audit committee with written terms of reference in compliance with the Listing Rules[58]. Shareholder Information - As of September 30, 2019, Tang Rong holds 396,200 shares, representing 0.03% of the issued share capital of the company[67]. - Dr. Mao Yumin holds 1,268,200,000 shares, representing 86.61% of the issued share capital of the Company[72]. - United Gene Holdings Limited owns 653,951,350 shares, accounting for 44.66% of the issued share capital[72]. - Chau Yiu Ting holds 302,600,000 shares, representing 20.67% of the issued share capital[72]. - The Company has not disclosed any other relevant interests or short positions of 5% or more in the issued share capital as of September 30, 2019[75]. Convertible Bonds - The Company has a convertible bond with an aggregate principal amount of HK$607,600,000, which can lead to the issuance of derivative shares[75]. - The Company issued Convertible Bonds III with an aggregate principal amount of HK$715,000,000 on July 28, 2014, to acquire a 51% equity interest in Smart Ascent, with a coupon rate of 3.5% per annum[182]. - The fair value of the liability component of Convertible Bonds III was HK$233,547,000 as of 28 July 2014, determined using the discounted cash flow approach[15]. - The conversion price for Convertible Bonds II is set at HK$0.40 per share, allowing bondholders to convert their bonds into shares within 10 years from the date of issue[171]. - The expected volatility for the Convertible Bonds II was recorded at 84.57% on April 24, 2014, decreasing to 79.49% by April 30, 2015, indicating a trend of reduced price fluctuations[173]. - The interest charge for Convertible Bonds II was HK$14,950,000 for the six months ended September 30, 2019, compared to HK$11,835,000 for the same period in 2018, reflecting an increase of approximately 26.5%[168]. Research and Development - The in-process research and development project for an oral insulin product has a carrying value of HK$1,373 million, with management performing impairment assessments at the end of each reporting period[26]. - The intangible assets include an in-process research and development project for an oral insulin product, with expected future economic benefits covering a 10-year period and a discount rate of 23.73% used for fair value calculations[153]. - The patents related to the oral insulin product are set to expire on 20 April 2021 and 12 April 2022, with Fosse Bio having exclusive rights for commercialization under a renewed collaboration arrangement with Tsinghua University until October 2023[153]. - The recoverable amount for the in-process R&D is estimated using a cash flow forecast over a 10-year period with a discount rate of 23.73%[156]. - The company believes that any reasonable changes in assumptions used for cash flow forecasting will not lead to an impairment of the in-process R&D[156].
领航医药生物科技(00399) - 2020 - 中期财报