Economic Performance - The Group reported a year-on-year growth of 18.3% in the first quarter of 2021, rebounding from a contraction of 6.8% in 2020[11]. - China's economy grew by 2.3% in 2020, marking the lowest growth rate in over four decades, but was the only major economy to achieve growth that year[11]. - The ongoing COVID-19 situation has caused far-reaching economic consequences impacting the global economy and ecosystems[11]. - The Group's financial performance reflects the broader economic recovery trends observed in China and globally[11]. - The first quarter of 2021 saw China's economy grow by 18.3%, marking a strong recovery following a 6.8% contraction in Q1 2020[24]. - The pharmaceutical industry in China maintained growth momentum despite the pandemic, focusing on high-quality and innovation-driven development[24]. Government Support and Policies - The Chinese government's continued fiscal and monetary support has been crucial in boosting domestic and global demand amid the ongoing COVID-19 pandemic[11]. - The adoption of the Fourteenth Five-Year Plan (2021-2025) focuses on high-quality and innovation-led growth, aiming to create new strengths for China's economic development[11]. - The new "dual circulation" development pattern emphasizes boosting domestic demand and further opening up the domestic market[11]. - The sustained implementation of major healthcare reform policies in China continues to impact the operating environment for pharmaceutical enterprises[12][14]. - The Chinese government's healthcare reforms have accelerated, leading to increased competition and pressure on the Group[28]. Group Strategy and Focus - The Group aims to achieve sustained and healthy economic development with a focus on higher quality growth in the coming years[11]. - The Group's strategic focus includes enhancing its market position through innovation and adapting to changing economic conditions[11]. - The Group aims to strengthen its core competitiveness in the manufacturing segment by enhancing production capabilities and developing self-manufactured products[21][22]. - The Group's strategic focus includes optimizing internal management and resource allocation to navigate challenges arising from the complex operating environment[21][22]. - The Group aims to enhance its distribution networks and adjust marketing strategies to respond to market challenges while investing in its own product development[60]. - The Group believes the manufacturing segment is well-positioned to seize growth opportunities under the Fourteenth Five-Year Plan[60]. Financial Performance - The Group's loss for FY2021 amounted to approximately HK$121.1 million, compared to a profit of HK$204.4 million in the previous year, primarily due to losses from fair value changes of investments in convertible bonds[19][20]. - The Group's loss attributable to owners was about HK$121.1 million, a decrease of approximately HK$204.4 million compared to a profit of about HK$83.3 million in the previous year, primarily due to non-cash losses from fair value changes in convertible bonds[34]. - The Group's revenue decreased to HK$94.7 million in 2021 from a gain of HK$106.1 million in 2020, a decline of approximately HK$200.8 million[54]. - The decrease in revenue was primarily due to a non-cash item loss of about HK$206.0 million from the fair value change of investments in convertible bonds[54]. - The Group's interest income from an associate decreased by approximately HK$5.2 million, and there was a net decrease in loan and imputed interest income of about HK$2.4 million[54]. - The Group's administrative expenses were approximately HK$23.9 million, a decrease of about HK$2.5 million or 9.7% compared to HK$26.4 million in the previous year[59]. Manufacturing and Trading Segments - The manufacturing segment continued to deliver positive results in FY2021, while the trading segment experienced a decrease in losses due to management's efforts in recovering impaired receivables and cost control[13][15]. - The Group's revenue from the manufacturing segment was approximately HK$78.8 million, representing an increase of about HK$1.2 million or 1.6% compared to HK$77.6 million in 2020[28]. - The gross profit for the manufacturing segment was HK$42.6 million, a slight decrease of about HK$0.3 million from HK$42.9 million in 2020, resulting in a gross margin drop from 55.3% to 54.0%[28]. - The self-manufactured pharmaceutical segment recorded a profit of about HK$4.0 million, down from HK$6.5 million in the previous year, representing a reduction of about HK$2.5 million[40]. - The imported pharmaceutical segment recorded a loss of about HK$4.4 million, a decrease in loss of about HK$10.5 million or 70.5% compared to HK$14.9 million in the previous year[40]. Research and Development - Research and development expenses for the segment increased to approximately HK$3.0 million from HK$0.6 million in the previous year, aimed at enhancing product competitiveness[40]. - The Group's research and development focus is aimed at improving product quality and efficacy amidst ongoing market uncertainties[59]. - The Group will continue to monitor the progress of the oral insulin project to facilitate the successful launch of the product in the market[52]. - The expected future economic benefits from the In-process R&D are assumed to cover a 10-year period from the commercialization of the product[52]. Leadership and Governance - Dr. Xie Yi is the Chairman and CEO, responsible for the group's strategic planning and overall management[72]. - The company has a strong leadership team with diverse expertise in pharmaceuticals, finance, and management[85]. - The Company has complied with the Corporate Governance Code provisions as set out in the Listing Rules on The Stock Exchange of Hong Kong Limited during the year ended 31 March 2021[96]. - The Company believes that there is an adequate balance of power and authority despite the roles of Chairman and Chief Executive Officer being held by the same person[96]. - The Company has established a Remuneration Committee consisting of three Independent Non-Executive Directors (INEDs) to review and approve the remuneration packages of directors[137]. Risk Management and Internal Controls - The Audit Committee adopted a risk-based approach to review the effectiveness and adequacy of the Company's financial controls, risk management, and internal control systems during the year ended March 31, 2021[157]. - The Group's risk management systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatement or loss[156]. - The Audit Committee is responsible for regularly reviewing the effectiveness of the Company's systems to assist the Board in fulfilling its oversight role[157]. Environmental, Social, and Governance (ESG) - The Group's Environmental, Social and Governance (ESG) Report covers the period from April 1, 2020, to March 31, 2021, and adheres to the ESG Reporting Guide under Appendix 27 of the Listing Rules[198]. - The Board is responsible for the ESG strategy and conducts regular reviews of the Group's ESG-related policies and risks to ensure effective risk management and internal control systems are in place[199]. - An "Environmental Protection, Occupational Health and Safety Management Committee" has been established to manage environmental protection and ensure a safe work environment, particularly for manufacturing activities in China[199]. - The Group recognizes the importance of sustainable development as a member of the global business community[200].
精优药业(00858) - 2021 - 年度财报