Company Overview - Lee's Pharmaceutical Holdings Limited has been operating in the pharmaceutical industry for over 25 years in China[9]. - The Group currently markets 23 proprietary and licensed-in pharmaceutical products across Mainland China, Hong Kong, Macau, and Taiwan[10]. - The Group has more than 60 products at various development stages, including internal R&D and licensed products from international companies[12]. - The manufacturing plant in Hefei, Anhui Province, includes four GMP-compliant workshops for producing various pharmaceutical forms[13]. - The new manufacturing site in Nansha District, Guangzhou, features complete solid dosage production lines for tablets and capsules[13]. - Extensive partnerships have been established with over 20 international companies to enhance product offerings[10]. - The mission of the Company is to become a leading biopharmaceutical group in Asia[16]. - The sales and distribution network covers most provinces and cities in Mainland China, ensuring broad market reach[13]. Financial Performance - Revenue for 2019 reached HK$1,218,913, an increase of 7.1% from HK$1,137,626 in 2018[24]. - Profit attributable to the owners of the Company decreased by 70.0% to HK$125,553 from HK$418,269 in 2018[24]. - Basic earnings per share fell to HK$21.22, a decrease of 70.0% from HK$70.67 in 2018[24]. - Total dividend per share for 2019 was HK$5.6, down 52.5% from HK$11.8 in 2018[24]. - Equity attributable to the owners of the Company increased by 3.9% to HK$2,295,900 from HK$2,210,543 in 2018[24]. - The dividend payout ratio for 2019 was 26.4%, compared to 16.7% in 2018[24]. - Revenue for the year ended 31 December 2019 was HK$1,218,913,000, representing an increase of 7.1% from HK$1,137,626,000 in 2018[37]. - Gross profit for 2019 was HK$798,256,000, up from HK$746,371,000 in 2018, indicating a gross margin improvement[37]. - Profit for the year was HK$63,345,000, a decrease from HK$389,763,000 in 2018, reflecting challenges in profit margins due to exchange rate instability and inflationary pressures[37]. Research and Development - The Company has a diverse portfolio of proprietary and licensed-in products targeting various medical applications, including blood clots, viral infections, and hypertension[21]. - New product developments include Livaracine® and Yallaferon® for blood clots and viral infections, respectively[21]. - The company invested nearly HK$326 million in R&D during the year, which accounted for 26.7% of its annual revenue in 2019[50]. - The Group's R&D expenditure was HK$325,985,000, representing 26.7% of revenue, which is among the highest in domestic pharmaceutical companies[88]. - The Group's commitment to addressing unmet medical needs is evident in its focus on R&D for innovative drugs, particularly for rare diseases and malignancies[79]. - The Group's pipeline includes 58 projects from early- to late-stage development across various therapeutic areas, with measurable progress made during the year[95][98]. - The company has 4 applications for Import Drug License (IDL) and 6 applications for Abbreviated New Drug Application (ANDA) pending review by the Centre for Drug Evaluation (CDE)[50]. - The company successfully completed the Phase II trial of Cyclosporine A Ophthalmic Gel for dry eye syndrome and met the study objectives for the Phase III trial of its acne treatment gel[53]. Market and Strategic Initiatives - The Group is expanding its market presence in Mainland China, Hong Kong, Macau, and Taiwan[21]. - The implementation of centralized bulk procurement in China has expanded nationwide, impacting pricing strategies for off-patent drugs[45]. - The new Drug Administrative Law in China focuses on accelerating the time-to-market for new products, benefiting the company's R&D efforts[77]. - The Group aims to separate its oncology and ophthalmology businesses into standalone biotech entities to enhance value[65]. - The Group's commitment to new drug development, sales organization reform, and cost containment is expected to chart a new growth path despite the challenges faced in 2020[173]. Challenges and Outlook - The company faced challenges from the trade war and exchange rate fluctuations, which affected profit margins throughout the year[43]. - The Group anticipates 2020 to be the most challenging year due to macroeconomic volatility, geopolitical complexities, and the ongoing coronavirus outbreak, which may lead to inflationary and foreign currency issues[173]. - The financial highlights indicate a significant shift in profitability, necessitating strategic adjustments moving forward[24]. - The Group's management remains optimistic about future growth opportunities despite the current economic challenges, emphasizing strategic investments in R&D and market expansion[173]. Corporate Governance and Management - The Group's Chief Financial Officer, Chow Yiu Ming, has over 23 years of experience in accounting, auditing, and corporate finance[196]. - Dr. Lau Lit-Fui, the Chief Operating Officer of China Ophthalmology Focus Limited, has over 23 years of experience in drug research and development[199]. - The Group established the Enterprise Development Department in 2012 to focus on strategic planning and development[196]. - The independent non-executive director, Dr. Chan Yau Ching, has extensive experience in corporate development and financial management of high-growth companies[188]. - The Group's management team includes professionals with significant experience in both public and private sectors in Hong Kong[196]. Investment and Financial Position - The Group's net cash position as of 31 December 2019 was HK$670,641,000, significantly higher than HK$346,884,000 in 2018[159]. - The current ratio as of 31 December 2019 was 1.59, compared to 1.48 in 2018, indicating improved liquidity[159]. - The Group's gearing ratio based on net borrowings to equity attributable to the owners of the Company was nil as of 31 December 2019[163]. - The Group believes it has adequate financial resources to meet future operational and development requirements[164]. - The Group plans to continue monitoring its investment portfolio and explore monetization opportunities for existing investments[157].
李氏大药厂(00950) - 2019 - 年度财报