雅各臣科研制药(02633) - 2020 - 中期财报

Company and Financial Overview This section provides an overview of the company's financial performance and strategic positioning Financial Highlights For the six months ended September 30, 2019, total revenue grew 6.8% to HKD 872 million, gross profit increased 12.5% to HKD 359 million, and profit attributable to shareholders rose 30.5% to HKD 127 million 2019 Interim Financial Highlights (For the six months ended September 30) | Indicator | 2019 Interim (HKD '000) | 2018 Interim (HKD '000) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 871,686 | 816,260 | +6.8% | | - Generic Drugs | 626,867 | 595,227 | +5.3% | | - Branded Drugs | 130,340 | 110,743 | +17.7% | | - Wholesale & Retail | 114,479 | 110,290 | +3.8% | | Gross Profit | 358,517 | 318,694 | +12.5% | | Gross Margin | 41.1% | 39.0% | +2.1 p.p. | | Profit Attributable to Company Shareholders | 127,218 | 97,531 | +30.5% | | Adjusted EBITDA | 255,968 | 211,516 | +21.0% | Balance Sheet Summary | Indicator | September 30, 2019 (HKD '000) | March 31, 2019 (HKD '000) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 4,657,259 | 4,260,594 | +9.3% | | Total Liabilities | 1,921,901 | 1,573,456 | +22.1% | | Total Equity | 2,735,358 | 2,687,138 | +1.8% | Company Profile and Competitive Advantages Jacobson Pharma is a leading Hong Kong pharmaceutical company with integrated R&D, production, and sales capabilities across generic, specialized, and branded drugs, leveraging its market leadership and strong R&D - The company is a major generic drug supplier in Hong Kong, with an extensive sales and distribution network covering public and private markets, actively expanding into strategic Asian markets[20] - The company owns several well-known branded medicines, such as Po Chai Pills, Ho Chai Kung, and Tang Tai Zong Medicated Oil, which enjoy high consumer recognition and a solid market position[20][22] - Core competitive advantages include: leadership in multiple therapeutic areas, recognized branded medicines, leading R&D capabilities, and a comprehensive sales and distribution network[21][22][23] Management Discussion and Analysis This section details the company's operational performance, financial results, and strategic initiatives during the reporting period Business Review Despite economic pressures from social unrest in Hong Kong, the Group achieved a modest 6.8% revenue growth and a strong 30.5% increase in profit attributable to shareholders in H1 2019 - Amidst social unrest in Hong Kong, the company's total revenue grew 6.8% to HKD 871.7 million, and profit attributable to shareholders increased by 30.5%, primarily driven by stable sales performance, operating leverage, and cost control[27] - The generic drug business recorded 5.3% growth, with sales revenue reaching HKD 626.9 million, mainly driven by product portfolio expansion and demand from an aging population[28] - The branded drug business achieved moderate growth, with both Po Chai Pills and Ho Chai Kung brands showing good performance in the Hong Kong and Macau markets[27] - The company successfully engaged in strategic collaborations with multinational partners involving high-end generic drug licensing, technology transfer, and branded product agency, while actively pursuing regional expansion plans[27] Generic Drug Business Performance The generic drug business achieved robust 5.3% growth, with sales reaching HKD 626.9 million, driven by strong performance in cardiovascular, CNS, and oral antidiabetic products Key Therapeutic Product Sales Growth | Therapeutic Category | Product Examples | Sales Growth Rate | | :--- | :--- | :--- | | Cardiovascular | β-blockers / Calcium Channel Blockers | +25.0% / +21.1% | | Central Nervous System | Antipsychotics / Hypnotics | +15.1% / +9.4% | | Oral Antidiabetics | - | +32.2% | - During the period, several new products were launched, including Diltiazem sustained-release tablets and Dihydrocodeine tablets, with multiple new products also approved for registration[34] - Production efficiency improved, with solid dosage forms like tablets and capsules reaching 1.598 billion units, a 13.5% year-on-year increase[35] Business Development and New Market Potential The company actively expanded its high-value product portfolio through strategic collaborations, signing exclusive licensing agreements for 19 specialty drugs with international manufacturers - Signed exclusive licensing agreements for 19 specialty drugs with manufacturers from Greece, Spain, South Korea, and Taiwan, covering cardiovascular, central nervous system, anti-infective, and oncology fields[39] - Entered the medical nutrition market, launching two products in Hong Kong: Aterinorm for cholesterol control and Gynositol for improving ovarian function[40] - Partnered with Smartfish of Norway to launch clinically tested health and sports nutrition beverages in Asia, with the first product, SMARTFISH REFLECT, already available in Hong Kong[41] Branded Drug Business Performance The branded drug segment's total revenue grew 17.7% to HKD 130.3 million, driven by strong performance of core brands like Po Chai Pills and Ho Chai Kung - The branded drug segment's total revenue reached HKD 130.3 million, a year-on-year increase of 17.7%[45] - Core brands showed strong performance: Po Chai Pills sales in Hong Kong and Macau grew 11.0%, and Ho Chai Kung pain relievers sales in Hong Kong and Macau increased significantly by 27.3%[45] - Actively expanded online channels, with Po Chai Pills now available on JD Worldwide and Tmall Global to explore the potential of the mainland China market[46] R&D Progress The company's R&D projects progressed well, with 4 products successfully registered during the period, and 103 products currently in various stages of development - As of September 30, 2019, the company had 103 products under development, of which 48 were approved for registration, 8 submitted for registration, and 27 undergoing stability testing[47] - Production facilities for an innovative home-use diagnostic product for prostate cancer screening are expected to be certified by end of 2019, with plans for launch in Hong Kong and Macau within 12-18 months[50] - The company invested USD 15 million in Fosun Pharma in December 2017, with the book value of this investment increasing to HKD 212.7 million as of September 30, 2019[54] Corporate Actions and Human Resources The company further acquired 43% equity in Orizen Capital Limited to accelerate branded Chinese medicine business expansion and fully redeemed HKD 500 million convertible bonds to save interest expenses - On August 6, 2019, the company further acquired a 43% equity interest in Orizen Capital Limited for HKD 113.4 million to expand its branded Chinese medicine business portfolio[57] - The company fully redeemed convertible bonds with a principal amount of HKD 500 million and a coupon rate of 3.5% ahead of schedule to reduce financing costs[58] - As of September 30, 2019, the Group had 1,911 employees, with total employee costs of HKD 225.3 million during the reporting period[59] Financial Review Total revenue increased by 6.8% to HKD 871.7 million this period, with growth across all business segments, while operating profit and profit attributable to shareholders also saw significant increases Revenue Analysis Total revenue increased by 6.8%, with generic drugs, branded drugs, and wholesale & retail segments growing by 5.3%, 17.7%, and 3.8% respectively Revenue by Operating Segment (HKD Million) | Segment | FY2020 Interim | FY2019 Interim | Growth Rate | | :--- | :--- | :--- | :--- | | Generic Drugs | 626.9 | 595.3 | +5.3% | | Branded Drugs | 130.3 | 110.7 | +17.7% | | Wholesale & Retail | 114.5 | 110.3 | +3.8% | | Total | 871.7 | 816.3 | +6.8% | - The Hong Kong market was the primary source of revenue, accounting for 94% of total revenue and contributing HKD 51.7 million in revenue growth[72][75] Cost and Profit Analysis Cost of sales increased by 4.6%, largely in line with sales growth, while operating profit rose 18.3% to HKD 187.7 million, driven by higher gross profit and fair value gains - Operating profit increased by 18.3% from HKD 158.6 million to HKD 187.7 million[84][85] - Finance costs decreased due to the early redemption of convertible bonds, saving interest expenses and amortization costs[86] - Profit attributable to shareholders increased by 30.5% to HKD 127.2 million[90] Assets and Liabilities Analysis Intangible assets significantly increased by HKD 274 million due to the acquisition of a branded Chinese medicine business subsidiary, while bank borrowings rose to HKD 1,478 million - Intangible assets increased by HKD 274 million due to the acquisition of a subsidiary[92] - Bank borrowings increased from HKD 829.6 million to HKD 1,478.1 million, primarily used for the early redemption of HKD 500 million convertible bonds[97] Use of Proceeds and Capital Structure The company detailed the use of proceeds from its initial public offering, convertible bond issuance, and new share issuance, with most funds utilized as planned - Of the net proceeds of HKD 695.5 million from the initial public offering, HKD 546.2 million has been utilized[99] - Of the net proceeds of HKD 490.4 million from the issuance of convertible bonds, HKD 449.1 million has been utilized[100][101] - The net gearing ratio increased from 24.8% as of March 31, 2019, to 27.8%, primarily due to additional bank borrowings[109] Key Risks and Uncertainties The company faces key risks including regulatory compliance in pharmaceutical manufacturing, uncertainties in future M&A integration, and potential product liability - Key risks include: failure to comply with pharmaceutical regulations, inability to successfully integrate M&A projects, delays in new product development, and product liability risks[115] Other Information This section covers corporate governance, shareholder information, and employee incentive schemes Corporate Governance and Compliance The company is committed to maintaining high corporate governance standards, though the Chairman and CEO roles are held by the same individual, Mr. Sum - The company's Chairman and Chief Executive Officer are held by the same person, Mr. Sum, which does not comply with Rule A.2.1 of the Corporate Governance Code regarding segregation of duties[123] - The Audit Committee, comprising three independent non-executive directors, has reviewed these interim results[127][129] Dividends and Shareholder Information The Board recommended an interim dividend of 2.0 HK cents per share, and the report details the interests of directors, chief executives, and substantial shareholders - The Board recommended an interim dividend of 2.0 HK cents per ordinary share, totaling approximately HKD 40.3 million[131] - Controlling shareholder Mr. Sum holds a total of 1,289,826,000 shares, representing approximately 63.99% of the issued share capital, through beneficial ownership, controlled corporations, and trusts[143][150] - Yunnan Baiyao Group holds 200,000,000 shares, representing approximately 9.92% of the issued share capital[150][155] Share Options and Share Award Scheme The company has a share option scheme and a share award scheme to incentivize and retain talent, with 22,980,000 outstanding share options as of September 30, 2019 - As of September 30, 2019, there were 22,980,000 outstanding share options under the share option scheme, primarily granted to directors and other employees[162][166] - The company adopted a share award scheme in October 2018; as of the period-end, the trustee had purchased 7,700,000 company shares, but no shares had been awarded to any participants[170][172] Financial Reports and Notes This section presents the unaudited consolidated financial statements and their detailed explanatory notes Unaudited Consolidated Financial Statements This section contains the company's unaudited consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and condensed consolidated statement of cash flows for the six months ended September 30, 2019 Consolidated Statement of Profit or Loss Key Data (For the six months ended September 30, 2019) | Indicator | Amount (HKD '000) | | :--- | :--- | | Revenue | 871,686 | | Gross Profit | 358,517 | | Operating Profit | 187,693 | | Profit Before Tax | 160,081 | | Profit for the Period | 131,879 | | Profit Attributable to Company Shareholders | 127,218 | Consolidated Statement of Financial Position Key Data (As of September 30, 2019) | Indicator | Amount (HKD '000) | | :--- | :--- | | Non-current Assets | 3,280,211 | | Current Assets | 1,377,048 | | Current Liabilities | 974,781 | | Non-current Liabilities | 947,120 | | Net Assets | 2,735,358 | | Total Equity Attributable to Company Shareholders | 2,666,898 | Notes to the Unaudited Interim Financial Report The notes provide detailed explanations of the financial statements, including the impact of HKFRS 16, segment reporting, business combinations, and fair value measurements - The company first applied HKFRS 16 (Leases) from April 1, 2019, using a modified retrospective approach, adjusting the opening equity balance and recognizing right-of-use assets and lease liabilities[198] - Segment reporting shows the generic drug segment contributed HKD 198.7 million in reportable segment profit (adjusted EBITDA), while the branded drug segment contributed HKD 52.7 million[238] - The company completed the further acquisition of Orizen Capital on August 6, 2019, with this business combination resulting in HKD 56.191 million in goodwill[276][280] - Subsequent to the reporting period, a 50%-owned joint venture of the company acquired a company with generic and branded Chinese medicine production facilities for approximately HKD 89 million[294]