Revenue and Profitability - Revenue of the Group increased by 40.1% or RMB436.8 million to RMB1,526.9 million for the Reporting Period (six months ended 30 June 2023: RMB1,090.1 million) [5] - Revenue from sales of pharmaceutical products increased by approximately RMB439.7 million, while revenue from medical beauty services decreased by RMB2.9 million [6] - Net profit increased by approximately RMB4.3 million to RMB23.9 million (six months ended 30 June 2023: RMB19.6 million) [6] - Net profit attributable to owners of the Company amounted to RMB23.9 million, representing an increase of RMB4.3 million [6] - Basic and diluted earnings per share amounted to RMB1.17 cent for the Reporting Period (six months ended 30 June 2023: RMB0.965 cent) [6] - Revenue for the six months ended June 30, 2024, was RMB 1,526.9 million, an increase of 40.0% compared to RMB 1,090.1 million in the same period of 2023 [9] - Gross profit for the same period was RMB 173.2 million, up 13.6% from RMB 152.5 million year-on-year [17] - The net profit margin decreased slightly to 1.6% in 2024 from 1.8% in 2023, while the gross margin also fell to 11.3% from 14.0% [9] - Profit before tax increased to RMB 67,994,000, compared to RMB 42,769,000 in the previous year, reflecting a growth of about 58.9% [136] - Profit attributable to owners of the company was RMB 23,870,000, an increase from RMB 19,595,000, which is a rise of approximately 21.6% [136] Expenses and Costs - Gross profit increased by RMB20.7 million to RMB173.2 million for the Reporting Period, while the gross profit margin decreased from 14.0% to 11.3% due to increased purchase costs from RMB depreciation against the US dollar [6] - Selling and distribution expenses decreased to approximately RMB36.5 million, down by RMB10.6 million compared to the same period in 2023, mainly due to reduced market promotion expenses [37] - Administrative expenses increased to RMB61.2 million, up by RMB12.8 million from the corresponding period of 2023, primarily due to increased research and development expenses for medical beauty products [38] - The Group recorded a cost of sales of RMB1,353.6 million, an increase of RMB416.0 million or 44.4% compared to RMB937.6 million in the corresponding period of 2023 [34] - The depreciation of property, plant, and equipment increased to RMB 5,684,000 in the first half of 2024 from RMB 3,501,000 in the same period of 2023, reflecting a 62.3% increase [142] - The total current tax expense for the six months ended June 30, 2024, was RMB 45,846, significantly higher than RMB 23,924 for the same period in 2023, reflecting an increase of 92% [176] Assets and Liabilities - The Group's total assets as of June 30, 2024, were RMB 1,819.4 million, a decrease from RMB 1,890.7 million at the end of 2023 [9] - Total liabilities decreased to RMB 1,174.7 million from RMB 1,262.6 million, indicating improved financial stability [9] - As of June 30, 2024, trade receivables amounted to RMB688.1 million, an increase of RMB152.1 million from RMB536.0 million at the end of 2023, reflecting increased sales of pharmaceutical products [49] - Trade and bills payables decreased to RMB722.1 million, down by RMB144.5 million from RMB866.6 million at the end of 2023, mainly due to reduced payables for human albumin solution purchases [55] - The inventory balance decreased to RMB44.2 million, down by RMB63.8 million from RMB108.0 million at the end of 2023, attributed to a decrease in human albumin inventory [48] - The Group's total current liabilities decreased to RMB 1,144,743,000 as of June 30, 2024, down from RMB 1,232,037,000 at December 31, 2023, a reduction of about 7.1% [138] Cash Flow and Financing - The net cash used in operating activities during the reporting period was approximately RMB 268.0 million, a significant decrease from a net cash inflow of RMB 425.8 million in the same period of 2023 [62] - The net cash outflow in investing activities was approximately RMB 21.5 million, reduced by RMB 26.1 million compared to the corresponding period in 2023 [63] - The net cash from financing activities amounted to approximately RMB 115.6 million, a turnaround from a net cash outflow of RMB 188.5 million in the same period of 2023 [67] - Cash and cash equivalents at the end of the period were RMB 282.0 million, down from RMB 520.8 million at the end of 2023 [61] - The Group's liquidity management includes strict control over outstanding receivables and ongoing assessment of customer creditworthiness [69] - The Group's gearing ratio increased to 52.6% as of June 30, 2024, compared to 47.2% at the end of 2023 [60] Research and Development - The Group is actively expanding its presence in the medical aesthetics industry, with ongoing R&D projects and a focus on safety and effectiveness [13] - A collaboration with Beijing Nuokangda for developing polycaprolactone fillers has initiated clinical trials at nine research centers, with over 50% of subjects enrolled [20] - The Secret Needle project has completed preclinical animal tests and is progressing towards safety evaluation studies [21] - The clinical trials for the Girl Needle project are ongoing, with expected completion of subject enrollment in July 2024 and registration submission anticipated in the second half of 2025 [28] - The Group's R&D efforts will focus on safety, effectiveness, and reliability while diversifying its product pipeline [28] Corporate Governance and Compliance - The Group will continue to strengthen its internal control system and enhance risk management as part of its corporate governance strategy [30] - The Group has complied with all applicable laws and regulations in the Cayman Islands, British Virgin Islands, Hong Kong, and the PRC during the reporting period [92][94] - The Audit Committee reviewed the unaudited condensed interim results of the Group, ensuring oversight of the financial reporting system and internal control procedures [99] - The Group's risk management identifies key risks including reliance on a limited number of suppliers and exchange rate fluctuations, particularly as purchases from overseas suppliers are denominated in USD [85][89] Shareholder Information - The Directors resolved not to declare any interim dividend for the Reporting Period (six months ended 30 June 2023: Nil) [7] - The Group's total number of shares issued as of June 30, 2024, is 2,032,890,585 [113] - Mr. Huang holds a long position of 1,050,000,000 shares, representing approximately 51.65% of the total shares [109] - The Share Option Scheme allows for a maximum of 160,000,000 shares to be issued upon exercise of options, which is 7.87% of the issued share capital as of the report date [120] - The remaining life of the Share Option Scheme is approximately 1 year and 8 months as of June 30, 2024 [120]
兴科蓉医药(06833) - 2024 - 中期财报