Financial Performance - The company's revenue increased by approximately 8.0% to about RMB 2,214.8 million for the year ended December 31, 2024[21]. - Profit attributable to equity holders of the parent decreased by approximately 41.5% to RMB 95.2 million[22]. - Pharmaceutical segment revenue grew by approximately 14.7% to RMB 1,624.3 million, accounting for 73.3% of total revenue[25]. - The retail pharmacy segment revenue declined by approximately 6.9% to RMB 590.5 million, representing 26.7% of total revenue[24]. - The annual gross profit increased by RMB 70.3 million or 5.8% to RMB 1,288.4 million for the year ended December 31, 2024, compared to RMB 1,218.1 million in 2023[28]. - The gross profit margin for the pharmaceutical segment decreased to 66.2% in 2024 from 69.0% in 2023, primarily due to changes in product mix[28]. - The gross profit for the retail pharmacy segment declined by 12.0% to RMB 212.3 million in 2024 from RMB 241.2 million in 2023, with a gross profit margin of 36.0%[29]. - Other income and gains decreased by approximately RMB 13.0 million to RMB 38.5 million in 2024, mainly due to reduced government subsidies[32]. - Selling and distribution expenses increased by approximately 11.3% to RMB 988.7 million in 2024, accounting for 44.6% of revenue[33]. - Research and development expenses rose by approximately 14.1% to RMB 57.0 million in 2024, attributed to increased external R&D costs[35]. - The profit attributable to equity holders of the parent decreased by 41.5% to RMB 95.2 million for the year ended December 31, 2024, with a net profit margin of 4.3%[38]. Strategic Focus and Development - The company plans to focus on the high-quality development opportunities in the biopharmaceutical industry in 2025[15]. - The company is expanding its product offerings, including traditional Chinese medicine and health products, to meet consumer demand[14]. - The modern Chinese medicine production park has been completed and is operational, showcasing new production capabilities[14]. - The company aims to enhance customer engagement through AI health self-testing devices and traditional Chinese medicine services[17]. - The company is committed to increasing market share and service quality to drive overall performance growth[18]. - The company is exploring new strategies to integrate health and wellness into daily life through herbal health products[17]. - The company aims to enhance its production capacity for traditional Chinese medicine to capture market share, anticipating continued growth in demand for its products[50]. Human Resources and Management - The total number of employees as of December 31, 2024, is 2,577, a decrease from 2,643 in 2023, with total compensation amounting to RMB 331.9 million, up from RMB 323.9 million in 2023[47]. - The company has adopted a competitive yet reasonable remuneration policy for directors to attract and retain qualified individuals[48]. - The total employee compensation includes salaries, retirement plan contributions, and other benefits, reflecting individual performance and industry standards[47]. - The company has no defined benefit plans as of the reporting period[49]. - The company appointed Mr. Lai Ying-sheng as Executive Director and CFO on March 24, 2022, who has been with the group since October 1, 2018[64]. - Mr. Cao Xiao-jun, with over 25 years of experience in the pharmaceutical industry, has been overseeing business development and sales activities since joining the group in March 2010[65]. - Ms. Jiang Li-xia, a non-executive director, has been with the group since February 24, 2009, and is responsible for overseeing business management and human resources[66]. - Mr. Wu Guan-yun, an independent non-executive director, has over 20 years of management experience and is the chairman of the audit committee[67]. - Mr. Huang Jin-hua, another independent non-executive director, has over 15 years of legal experience and has served on various committees within the company[69]. - Mr. Zhu Shang-heng, appointed as an independent non-executive director on April 10, 2025, has a background in both medicine and law, focusing on legal risk assessment for enterprises[70]. - Mr. Zhou Dai-han, with over 30 years of experience in the traditional Chinese medicine industry, has been involved in teaching and research at Guangzhou University of Chinese Medicine since 1976[74]. Corporate Governance - The board consists of four executive directors, one non-executive director, and three independent non-executive directors, ensuring over one-third independence[85]. - The company has applied the principles of the corporate governance code and complied with all applicable code provisions for the year ending December 31, 2024[84]. - The board is responsible for overseeing the company's strategy development and monitoring operational and financial performance[87]. - All directors participated in continuous professional development programs to enhance their knowledge and skills during the year ending December 31, 2024[89]. - The company has arranged training for all directors to ensure they contribute effectively to the board[89]. - The independent non-executive directors possess expertise in finance, law, and business, providing a necessary balance of skills and experience[85]. - The company has a risk management policy in place aligned with its strategic objectives[87]. - The board believes that its current structure ensures independence and objectivity, safeguarding the interests of shareholders[85]. - The company has a commitment to prudent management principles and corporate responsibility to enhance shareholder value in the long term[83]. - The board has authorized management to execute the group's strategies and daily operations[87]. - The roles of the Chairman and CEO are distinct, with Mr. Lai Chi Tin serving as Chairman and Mr. Lai Wing Fung as CEO as of December 31, 2024[94]. - All directors are appointed for a term of three years, with independent non-executive directors also serving a three-year term[95]. - The attendance rate for board meetings was 100% for all executive directors, with Mr. Lai Chi Tin and Mr. Lai Wing Fung attending all 4 regular board meetings[99]. - The Audit Committee, consisting of independent non-executive directors, reviewed the financial statements and related materials during the year[103]. - The Remuneration Committee held one meeting during the year to review and assess the performance of directors and senior management[104]. - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, to oversee specific areas of governance[102]. - The company ensures that all independent non-executive directors are independent and possess extensive professional knowledge and experience[97]. - The company provides sufficient resources for all committees to fulfill their responsibilities and seek independent professional advice when necessary[102]. - The company has received written confirmations of independence from all independent non-executive directors as per listing rules[97]. - The company’s senior management annual salary ranges were disclosed, indicating a structured compensation framework[106]. - The Nomination Committee was established on June 8, 2015, and consists of five members, including three independent non-executive directors, ensuring a majority of independent members[107]. - The company adopted a nomination policy on August 29, 2018, to enhance board diversity and governance standards, considering factors such as qualifications, skills, integrity, and experience[109]. - The company secretary, Ms. Ho, has confirmed participation in at least 15 hours of relevant professional training for the fiscal year ending December 31, 2024[114]. - The board emphasizes risk management and has established effective risk management and internal control systems to manage risks impacting business objectives[118]. - The Audit Committee serves as the highest level of risk management within the company, reporting directly to the board[122]. - The company has a structured process for identifying potential board candidates, including recommendations from board members and professional recruitment firms[115]. - The board is committed to maintaining high standards of corporate governance and regularly reviews its governance policies[113]. - The company ensures compliance with the Listing Rules and has adopted the standard code for securities trading by directors[117]. - The Nomination Committee held one meeting during the fiscal year ending December 31, 2024, with all members receiving the meeting records for review and approval[107]. - The company has established a comprehensive organizational structure for managing risks faced by the group[119]. - The company has established a comprehensive risk management procedure to identify, assess, and manage significant risks, ensuring the effectiveness of the risk management and internal control systems[125]. - In 2024, the risk management team will conduct risk identification and assessment across five dimensions: strategic, market, operational, compliance, and financial[134]. - The internal audit department will evaluate the effectiveness of the risk management and internal control systems, ensuring they are sufficient to control risks that may impact the company's objectives[136]. ESG and Sustainability - The report covers the period from January 1, 2024, to December 31, 2024, focusing on the group's sustainable development policies and performance[168]. - The group has committed to ensuring the accuracy and completeness of the report, with the board reviewing and approving it on March 26, 2025[163]. - The ESG work committee is responsible for coordinating ESG management and identifying ESG risks and opportunities, adhering to relevant guidelines from the Hong Kong Stock Exchange[174]. - The group has engaged Riskory Consultancy Limited as an independent ESG consultant to assist in writing the ESG report and providing carbon offset consulting services[178]. - Stakeholder engagement is crucial for understanding risks and opportunities, with various communication channels used to gather feedback, including interviews and site visits[179]. - The report follows the mandatory disclosure requirements of the ESG Reporting Guidelines set by the Hong Kong Stock Exchange[164]. - The group has established key performance indicators for environmental and social aspects to monitor and assess progress in fulfilling its responsibilities[167]. - The board is responsible for decision-making regarding ESG matters, including reviewing strategies and assessing the effectiveness of ESG management[171]. - The report emphasizes the importance of a balanced presentation of the group's performance in environmental, social, and governance areas[167]. - The group aims to enhance its ESG management system to drive sustainable development and further business growth[170]. - The company emphasizes the importance of effective resource usage, ecological protection, and compliance management as key sustainability issues[187]. - The company has established multiple internal systems and codes, including the "Integrity System" and "Code of Conduct for Directors and Management," to ensure compliance and ethical behavior[190]. - The company has not been aware of any corruption lawsuits or significant violations related to bribery, fraud, or money laundering during the reporting period[190]. - The company prioritizes product quality and safety, as well as the protection of intellectual property rights, as critical responsibilities[187]. - The company encourages employees to report any misconduct through various channels, including a reporting mailbox and hotline[193]. - The company has identified key ESG issues for the year, focusing on stakeholder expectations and regulatory trends[185]. - The company is committed to maintaining a transparent and compliant operational environment, adhering to relevant laws and regulations[190]. - The company has implemented a green procurement policy, emphasizing the use of environmentally friendly materials[187]. - The company aims to promote health products and services as part of its community contribution efforts[187]. - The company emphasizes product quality and safety, aiming to provide healthy products to the public[197]. - Several products received accolades, including "Guangdong Province Pharmaceutical Industry Brand Product" for Zhongzhi Ke Kuaipian and Yinhuang Granules[197]. - The core brand "Caojinghua" was included in the "Guangdong Province Key Trademark Protection Directory" and won the "Xipu Gold Award" in the pharmaceutical industry[197]. - The company adheres to various quality management regulations, including GMP and GSP, to ensure the safety and effectiveness of its products[198]. - The company has established a comprehensive quality management system across its subsidiaries to ensure product reliability[200].
中智药业(03737) - 2024 - 年度财报