Business Operations - The Group is primarily engaged in providing medical equipment finance leasing services, maternal and child postpartum care industry services, and trading of medical equipment and consumables in the PRC[21]. - The healthcare industry is expected to become a new economic breakthrough post-epidemic, with significant potential for value addition, prompting the Group to focus on medical equipment finance leasing and trading[22]. - China's medical equipment industry has maintained a high growth rate, becoming the second largest market globally, supported by national policies and the 14th Five-Year Plan[23]. - The Group's revenue from finance leasing services was RMB 9.2 million during the year, serving approximately 5,000 SMEs across 30 provinces in China[37][41]. - The Group plans to increase investment in research and development to enhance competitiveness in technology and products[30][33]. - By 2027, equipment investment in healthcare is expected to increase by over 25% compared to 2023, as outlined in the "Action Plan for Promoting Large-Scale Equipment Renewal" issued by the State Council[27][29]. - The medical device industry in China is projected to experience significant growth, supported by national policies and increasing health awareness among citizens[25][28]. - The Group's focus on the medical equipment and consumables trading business aligns with national policies aimed at promoting the medical equipment industry[30][36]. - The "Pharmaceutical Industry High-Quality Development Action Plan (2023-2025)" aims to enhance the supply capacity of high-end medical equipment and key technologies[26][29]. Financial Performance - The Group's revenue increased by approximately RMB 54.3 million or approximately 10.9%, from approximately RMB 498.0 million for the prior year to approximately RMB 552.3 million for the current year[82]. - The cost of sales increased from approximately RMB 375.0 million for the prior year to approximately RMB 465.7 million for the current year, driven by higher costs of medical equipment and consumables sold[83]. - Revenue from medical equipment and consumables trading rose from approximately RMB 417.0 million in the prior year to approximately RMB 493.2 million in the current year[85]. - The Group recorded a loss attributable to owners of approximately RMB 53.0 million for the year, compared to a profit of approximately RMB 14.6 million in the prior year[96]. - As of December 31, 2024, bank balances and cash were approximately RMB 13.0 million, down from RMB 108.3 million in the prior year[97]. - The Group's total equity as of December 31, 2024, was approximately RMB 302.1 million, down from RMB 315.3 million in 2023[101]. - The gearing ratio increased to approximately 37.7% in 2024 from 29.6% in 2023, attributed to the expansion of the Group's trading of medical equipment and consumables business[104]. - The Group's finance lease receivables increased to approximately RMB 112.2 million in 2024 from RMB 72.1 million in 2023, which were pledged to secure bank borrowings[112]. Risk Management - The Group recognizes the importance of an effective risk management system to mitigate various risks associated with finance leasing services[39][42]. - The risk management department conducts thorough due diligence on each customer, including on-site interviews and document reviews, to assess their financial standing and repayment ability[43]. - The Group's receivables are 100% secured and guaranteed as of December 31, 2024, compared to 99.5% in 2023[51]. - The approval process for finance leasing transactions involves a multi-level review system to evaluate potential risks and issues associated with each transaction[43]. - Post-drawdown management includes routine inspections and ongoing monitoring of leased assets to identify potential defaults early[45]. - The Group's risk management committee plays a crucial role in evaluating significant business decisions and ensuring compliance with entry criteria for customers[43]. - The Company has established risk management policies and rules to mitigate potential risks associated with its operations[149]. Maternal and Child Postpartum Care - The maternal and child postpartum care industry services recorded a revenue of RMB 24.2 million during the Year, reflecting a decline attributed to adverse macroeconomic conditions and intense price competition among postpartum care centers[54][58]. - The Group acquired a 51% equity interest in Wuhan Desheng Meimei Health Management Co., Ltd. for RMB 3.4 million, which provides postpartum care services in the PRC[55][57]. - Desheng Meimei was guaranteed to achieve a net profit after tax of no less than RMB 1.8 million for the period ending December 31, 2022, and RMB 2.2 million for the year ending December 31, 2023[58][60]. - The actual profit after tax for Desheng Meimei from the completion date to December 31, 2022, was approximately RMB 0.9 million, resulting in a failure to meet the profit guarantee[59][61]. - The Group exercised its right to request the Vendor to repurchase the 51% equity interest in Desheng Meimei due to unmet profit guarantees, leading to a lawsuit against the Vendor[59][61]. - In December 2023, the Shenzhen Nanshan District People's Court ordered the Vendor to repurchase the equity interest in Desheng Meimei, which was settled for RMB 1.3 million in June 2024[59][61]. - The Group also acquired a 54% equity interest in Wuhan Jiaenbei Health Management Co., Ltd. for RMB 3.24 million, which also provides postpartum care services[63][66]. - Jiaenbei was guaranteed to achieve a net profit after tax of no less than RMB 1.0 million for each year from the completion date to December 31, 2023, and for the year ending December 31, 2024[64][66]. - The actual profit after tax for Jiaenbei for the year ended December 31, 2022, was approximately RMB 0.3 million, resulting in a failure to meet the profit guarantee for that year[65]. - The Group entered into a supplemental agreement with Jiaenbei's vendors to revise the profit guarantee for future periods[65]. - Jiaenbei's actual profit after tax for the year ended 31 December 2023 was approximately RMB 0.3 million, resulting in the failure to meet the profit guarantee[68]. - The Group decided not to exercise the option to repurchase the 54% equity interest in Jiaenbei nor to request compensation for the profit guarantee shortfall for the year ended 31 December 2023[68]. - Jiaenbei's profit guarantee was revised, requiring a net profit after tax of no less than RMB 1.0 million for each of the years ending 31 December 2024 and 31 December 2025[68]. - The actual profit after tax for Jiaenbei for the year ended 31 December 2024 was approximately RMB 1.0 million, thus meeting the profit guarantee[69]. - The Group recognized an impairment loss on goodwill of approximately RMB 9.9 million and on trademarks of approximately RMB 8.5 million due to continuous operating losses at Dunnan Group[70]. - The acquisition of Wuhan Meikangmao Health Management Co., Ltd. was completed in April 2024 for a consideration of RMB 40.0 million[74]. - The Meikangmao Postpartum Care Center has been operating at a loss since its opening, leading to an agreement to transfer its site to another postpartum care center for five years[76]. - The Group recognized a goodwill impairment loss of approximately RMB 7.1 million related to the acquisition of Meikangmao[79]. Corporate Governance - The Company adopted and complied with the Corporate Governance Code to ensure proper regulation of business activities and decision-making processes[156]. - The Board is responsible for promoting the success of the Company by providing effective leadership and ensuring transparency and accountability in operations[158]. - The Company has implemented corporate governance practices appropriate for the growth of its business, ensuring compliance with GEM Listing Rules[160]. - The Board reserves decisions for all major matters, including financial information and material transactions, to maintain oversight and accountability[158]. - The Company has independent non-executive directors with extensive experience in finance, accounting, and corporate governance to guide its strategic direction[144][146]. - The Company has a balanced Board composition with two executive Directors, one non-executive Director, and three independent non-executive Directors, ensuring independent judgment[171]. - The Company has arranged appropriate liability insurance coverage for all Directors, which is reviewed regularly by the Board[166]. - The Nomination Committee ensures the Board's composition maintains a balance of skills, experiences, and diversity[171]. - The Board meets at least four times a year to review financial statements, operating performance, and overall strategies, with additional meetings arranged as necessary[198]. - Continuous professional development is mandated for all directors to ensure their contributions remain informed and relevant[190]. - Newly appointed directors receive comprehensive induction training to understand the group's structure, operations, and regulatory obligations[191]. - The Board regularly reviews the delegated functions and responsibilities of management to ensure effective oversight[167]. - Directors are appointed for an initial term of three years, with provisions for re-election and rotation at annual general meetings[186][187]. - The company adheres to the corporate governance code, ensuring a balance of power and authority between the board and management despite the dual role of the Chairman and CEO[184].
紫元元(08223) - 2024 - 年度财报