Financial Performance - Revenue from the pharmaceutical products business decreased by 15.39% to approximately RMB 85.05 million, down from approximately RMB 100.52 million in 2023[19]. - Profit from the pharmaceutical products business fell to RMB 3.68 million, representing a decrease of approximately 81.43% compared to RMB 19.82 million for the corresponding period in 2023[19]. - The Group generated total revenue from continuing operations of approximately RMB85.22 million for the year ended 31 December 2024, representing a decrease of approximately 20.92% compared to RMB107.77 million for the year ended 31 December 2023[47]. - Gross profit for the Group's continuing operations was approximately RMB16.86 million, with a gross profit margin of 19.78% for the year ended 31 December 2024, down from RMB29.22 million and 27.12% in 2023, respectively[52]. - Profit attributable to owners of the Company was approximately RMB4.89 million for the year ended 31 December 2024, representing a decrease of approximately 73.75% compared to RMB18.63 million in the corresponding period in 2023[59]. - Distribution costs for the Group's continuing operations increased to approximately RMB6.25 million in 2024 from approximately RMB0.78 million in 2023, an increase of approximately RMB5.47 million[50]. - Administrative expenses for the Group's continuing operations amounted to approximately RMB26.05 million for the year ended 31 December 2024, an increase of approximately RMB12.66 million from RMB13.39 million in 2023[51]. - The company's profit attributable to owners for the year ended December 31, 2024, was approximately RMB 4.89 million, a decrease of about 73.75% compared to RMB 18.63 million for the same period in 2023[64]. - Basic and diluted earnings per share for the year ended December 31, 2024, were approximately RMB 3.37, down from RMB 14.52 and RMB 12.73 in 2023[65]. Business Operations - The management decided to downsize the production capacity of Fujian Rui Chuang in 2025 due to continuous deterioration in gross profit margin and decreasing sales volume[17]. - A write-off of RMB 1,780,000 and RMB 731,000 was made for Fujian Rui Chuang's property, plant and equipment and right-of-use assets, respectively[17]. - The genetic testing and molecular diagnostic services business was ceased as of June 1, 2024, and reclassified as a discontinued operation[17]. - Fujian Rui Chuang remains the core production center and exclusive sales channel for the Group's developed pharmaceutical products[17]. - The increase in general costs and supply shortages of traditional Chinese herbal materials adversely affected gross profit margins and sales volumes[17]. - The company is focusing on its pharmaceutical products and finance leasing businesses moving forward[17]. - The management is exploring new strategies to mitigate the impact of rising costs and supply chain issues[17]. - Future outlook includes potential market expansion and product development initiatives[17]. - The revenue from the finance leasing business for the Reporting Period was RMB0.17 million, a significant decrease from RMB7.25 million in 2023, due to the expiration of existing contracts and no new contracts being entered into[22]. - As of December 31, 2024, the Group had no customers in the finance leasing business, down from 2 customers on December 31, 2023[22]. - The Group's finance leasing services primarily target the medical, pharmaceutical, and public infrastructure industries, but are not limited to these sectors[23]. - The Group has not entered into any new finance leasing agreements during the Reporting Period, making the weighted average term of finance leases not applicable (2023: 1.6 years)[34]. - The Group completed the disposal of 59% of its shareholding in Zentrogene Bioscience Laboratory Limited for HK$22 million, becoming a 41%-owned associate, to reallocate resources towards its core pharmaceutical business[36]. - Following the divestment of Zentrogene, genetic testing and molecular diagnostic services have been discontinued as a main business segment effective June 1, 2024[37]. - The Group anticipates challenges in business performance due to slower-than-expected economic recovery in China post-Covid, despite a focus on sustainable growth[38]. - The Group will continue to implement cost control measures and maintain a flexible approach to strengthen its revenue base and optimize financial performance[38]. Corporate Governance - The Group's corporate governance practices comply with the Corporate Governance Code during the year ended December 31, 2024, with a noted deviation from provision C.2.1[109]. - The Company has adopted the Model Code for Securities Transactions by Directors, confirming compliance by all Directors during the year ended December 31, 2024[110]. - The Board consisted of eight members as of December 31, 2024, including five executive Directors and three independent non-executive Directors[114]. - The Board convened a total of 5 Board meetings and 2 general meetings during the year ended December 31, 2024[124]. - All independent non-executive Directors confirmed their independence, satisfying the requirements under the Listing Rules[131]. - The Company has complied with the requirements under Rules 3.10 and 3.10A of the Listing Rules, ensuring at least three independent non-executive Directors have appropriate professional qualifications[131]. - The attendance record for executive Directors showed that Mr. She Hao attended all 5 Board meetings, while Mr. Chen Chengqing and Professor Zhang Rongqing did not attend any[127]. - The Board is responsible for enhancing shareholders' value through strategic planning and oversight of the Group's management[115]. - The Company has developed, reviewed, and monitored the code of conduct applicable to directors and employees[122]. - The Board reviewed the Company's policies and practices on corporate governance and made recommendations during the year[122]. - The roles of chairman and chief executive officer are separated, with Mr. She Hao serving as Deputy Chief Executive Officer during the reporting period[128]. - The Board meets at least 4 times a year to review financial performance and other significant matters[117]. - The Board comprises 5 executive Directors and 3 independent non-executive Directors, with male Directors representing approximately 87.5% and female Directors approximately 12.5%[141]. - The Company has maintained and renewed Directors' and Officers' liabilities insurance for all Directors and senior management for the year ended December 31, 2024[152]. - The Board Diversity Policy was adopted in August 2013, aiming to achieve diversity through various factors including age, gender, and professional experience[139]. - The Nomination Committee has set measurable goals regarding age, professional qualification, term of service, and independence to implement the Board Diversity Policy[140]. - The dividend policy emphasizes continuity, stability, and sustainability, with recommendations subject to the Board's discretion based on the Group's earnings per share and financial conditions[151]. - All independent non-executive Directors confirmed their independence in accordance with the Listing Rules[135]. - The Company has achieved gender diversity requirements at the Board level as per Rules 13.92 of the Listing Rules[141]. - The responsibilities of non-executive Directors include regular attendance at meetings and providing independent opinions[136]. - The Company encourages continuous professional development for Directors through training and relevant reading materials[147]. Risk Management and Internal Control - The Group has established risk management and internal control systems to manage strategic, operational, financial, and compliance risks[191]. - An independent professional firm was engaged to assist in the internal audit function and evaluate the effectiveness of the Group's risk management and internal control systems for the year ended December 31, 2024[192]. - The Group conducted an annual risk assessment to identify and prioritize risks for internal audit projects[193]. - The Board acknowledges its responsibility for preparing consolidated financial statements that provide a true and fair view of the Company's state of affairs for the year ended December 31, 2024[185]. - The Nomination Committee reviewed the composition of the Board and the independence of all independent non-executive directors during the review year[178]. - The Company has taken steps to enhance its risk management and internal control systems based on identified control weaknesses[194]. - The Nomination Committee is responsible for evaluating the diversity policy and the appointment of new directors[178]. - The Board is committed to reviewing the effectiveness of the Group's risk management and internal control systems at least annually[196]. - An independent professional internal audit firm has been appointed to assist in evaluating the effectiveness of the risk management and internal control systems for the year ending December 31, 2024[197]. - The Group has conducted an annual risk assessment to identify strategic, operational, financial, and compliance risks associated with its main business operations[196]. - The Audit Committee and the Board believe that the Group has maintained effective and adequate risk management and internal control systems during the year ended December 31, 2024[199]. - The Group has established procedures for handling and disseminating inside information to prevent mishandling within the organization[198]. - All external publications and presentation materials must be reviewed by management before release to ensure accuracy[198]. - The internal audit plan prioritizes identified risks for relevant annual internal audit projects[196]. - The Group aims to enhance its risk management and internal control systems based on findings from the risk assessment and internal control checks[197]. Employee and Shareholder Information - The total staff cost for the group was approximately RMB 16.82 million for the year ended December 31, 2024, compared to RMB 8.14 million in 2023, with an increase in employees from 68 to approximately 164[86]. - The Group employed approximately 164 employees during the reporting period, with total employee costs amounting to RMB 16.82 million[92]. - The Company does not recommend any final dividend for the year ended December 31, 2024, consistent with the previous year[105]. - The total issued shares of the Company was 152,898,695 Consolidated Shares as of December 31, 2024, following a share consolidation effective on 13 August 2024[62]. - As of December 31, 2024, male employees accounted for approximately 59.76% and female employees for approximately 40.24% of the total workforce[142]. - The entire issued share capital of Sanai International was charged as security for the Convertible Notes issued in February 2022[90]. - The initial conversion price of the Convertible Notes was set at HK$0.119 per share, later amended to HK$0.098 per share[99]. - The maturity date of the Convertible Notes was extended by 3 years to February 9, 2026[99]. - The total remuneration paid to the external auditor, Forvis Mazars CPA Limited, for audit services was HK$1,200,000 for the year ended December 31, 2024[184]. - The remuneration for non-audit services related to interim results was HK$100,000, with other non-audit services totaling HK$200,000[184].
三爱健康集团(01889) - 2024 - 年度财报