东瑞制药(02348) - 2025 - 中期业绩

Interim Results Announcement This section presents the key financial performance, profit or loss, comprehensive income, and financial position for the six months ended June 30, 2025 Financial Highlights This section outlines the company's key financial performance for the six months ended June 30, 2025, including revenue growth, decreased gross profit, significant reductions in profit before tax and profit for the period, and a notable decline in earnings per share | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Revenue | 630,424 | 577,447 | 9.2% | | Gross Profit | 313,978 | 337,912 | -7.1% | | Gross Profit Margin | 49.8% | 58.5% | -8.7 percentage points | | Profit Before Tax | 130,317 | 556,752 | -76.6% | | Profit for the Period | 101,708 | 491,583 | -79.3% | | Net Profit Margin | 16.1% | 85.1% | -69.0 percentage points | | Profit Attributable to Owners of the Parent (excluding 2024 non-recurring profit) | 104,572 | 126,127 | -17.1% | | Basic Earnings Per Share | 0.06961 | 0.3286 | -78.8% | Condensed Consolidated Statement of Profit or Loss This section presents the group's condensed consolidated statement of profit or loss for the six months ended June 30, 2025, detailing revenue, cost of sales, gross profit, other income and gains, various expenses, finance costs, share of loss of associates, profit before tax, income tax, and profit for the period, allocated to owners of the parent and non-controlling interests | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Revenue | 630,424 | 577,447 | | Cost of Sales | (316,446) | (239,535) | | Gross Profit | 313,978 | 337,912 | | Other Income and Gains | 30,861 | 421,636 | | Selling and Distribution Expenses | (56,830) | (68,911) | | Administrative Expenses | (67,491) | (54,148) | | Research and Development Costs | (56,816) | (43,883) | | Other Expenses | (33,071) | (29,498) | | Finance Costs | (314) | (2,660) | | Profit Before Tax | 130,317 | 556,752 | | Income Tax | (28,609) | (65,169) | | Profit for the Period | 101,708 | 491,583 | | Profit Attributable to Owners of the Parent | 104,572 | 493,046 | | Profit Attributable to Non-controlling Interests | (2,864) | (1,463) | | Basic Earnings Per Share | RMB 0.06961 | RMB 0.3286 | Condensed Consolidated Statement of Comprehensive Income This section discloses the group's condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, showing profit for the period and other comprehensive (loss)/income, primarily from exchange differences on translation of foreign operations and the company's financial statements, leading to the total comprehensive income for the period after tax | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Profit for the Period | 101,708 | 491,583 | | Exchange Differences Arising from Translation of Foreign Operations | (4,848) | 2,516 | | Exchange Differences Arising from Translation of the Company's Financial Statements | (10,350) | 8,473 | | Total Other Comprehensive (Loss)/Income for the Period After Tax | (15,198) | 10,989 | | Total Comprehensive Income for the Period After Tax | 86,510 | 502,572 | | Attributable to Owners of the Parent | 89,374 | 504,035 | | Attributable to Non-controlling Interests | (2,864) | (1,463) | Condensed Consolidated Statement of Financial Position This section provides the group's condensed consolidated statement of financial position as of June 30, 2025, and December 31, 2024, detailing non-current assets, current assets, current liabilities, non-current liabilities, and total equity, reflecting the composition and period-end changes in assets, liabilities, and shareholders' equity | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Total Non-current Assets | 1,748,101 | 1,807,035 | | Total Current Assets | 2,134,581 | 2,202,241 | | Total Current Liabilities | 446,960 | 554,603 | | Net Current Assets | 1,687,621 | 1,647,638 | | Total Non-current Liabilities | 132,726 | 128,005 | | Net Assets | 3,302,996 | 3,326,668 | | Total Equity | 3,302,996 | 3,326,668 | Notes to the Financial Statements This section provides detailed notes to the financial statements, covering company information, basis of preparation, changes in accounting policies, segment information, revenue, other income and gains, finance costs, profit before tax, income tax, dividends, earnings per share, inventories, trade and bills receivables, and trade and bills payables Company Information, Basis of Preparation, Changes in Accounting Policies This section explains Dawnrays Pharmaceutical (Holdings) Limited's registration, group restructuring history, main business scope, the basis for preparing interim financial information (IAS 34 and HKEX Listing Rules), and changes in accounting policies adopted during the period, particularly the impact of IAS 21 amendments on currencies lacking exchangeability - The company was incorporated in the Cayman Islands on September 20, 2002, and listed on the Main Board of the Stock Exchange on July 11, 2003, primarily engaging in the development, manufacturing, and sale of generic drugs, including intermediates, APIs, and finished drugs[10][11] - The interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and all applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, presented in RMB[12] - The amendments to IAS 21 regarding lack of exchangeability have no impact on this interim condensed consolidated financial information, as the group's transaction and functional currencies are all exchangeable[13] Company and Group Information This section introduces Dawnrays Pharmaceutical (Holdings) Limited's place of incorporation, listing date, and primary business of developing, manufacturing, and selling generic drugs - Dawnrays Pharmaceutical (Holdings) Limited was incorporated in the Cayman Islands on September 20, 2002, and listed on the Main Board of the Stock Exchange on July 11, 2003[10][11] - The Group is primarily engaged in the development, manufacturing, and sale of generic drugs, including intermediates, APIs, and finished drugs[11] Basis of Preparation This section states that the interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and the HKEX Listing Rules, presented on a historical cost basis, with RMB as the presentation currency - The interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and all applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[12] - The financial information is prepared on a historical cost basis, except for financial assets and liabilities measured at fair value through profit or loss[12] Changes in Accounting Policies and Disclosures This section notes that the accounting policies adopted in this period are consistent with the previous year, with the only new adoption being the revised IAS 21 "Lack of Exchangeability," which has no material impact on the Group's financial information - The accounting policies adopted in the preparation of this interim condensed consolidated financial information are consistent with those used in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[13] - The amendments to IAS 21 "Lack of Exchangeability" were first adopted in this period's financial information, but as the Group's transaction currencies are all exchangeable, these amendments have no impact on the interim condensed consolidated financial information[13] Segment Information The Group's business is divided into two reportable segments: finished drugs (including antibiotic and non-antibiotic preparations) and intermediates and APIs; management assesses segment performance based on adjusted profit before tax, with finished drugs accounting for the largest share of external sales and significant growth in intermediates and APIs sales - The Group's business is divided into two reportable segments: manufacturing and sale of finished drugs ("Finished Drugs" segment) and manufacturing and sale of intermediates and APIs ("Intermediates and APIs" segment)[14][16] Segment Revenue (External Sales) | Segment Revenue (External Sales) | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Finished Drugs | 590,208 | 560,878 | | Intermediates and APIs | 40,216 | 16,569 | | Total | 630,424 | 577,447 | Segment Results | Segment Results | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Finished Drugs | 250,864 | 264,462 | | Intermediates and APIs | (25,216) | (25,858) | | Total | 225,648 | 238,604 | Revenue, Other Income and Gains During the reporting period, the Group's revenue primarily came from contracts with customers, totaling RMB 630,424 thousand, with finished drug sales accounting for the vast majority; total other income and gains were RMB 30,861 thousand, a significant decrease from the prior year, mainly due to large gains from the disposal of an associate and government grants in the previous period Revenue Sources | Revenue Source | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 630,424 | 577,447 | Other Income and Gains | Other Income and Gains | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Bank Interest Income | 16,649 | 15,498 | | Government Grants | 6,375 | 113,567 | | Gain on Disposal of an Associate | - | 286,670 | | Exchange Gain, Net | 1,103 | - | | Fair Value Gain on Financial Assets at Fair Value Through Profit or Loss, Net | 4,474 | 4,093 | | Total Other Income and Gains | 30,861 | 421,636 | - In the first half of 2025, the Mainland China market contributed RMB 619,773 thousand in revenue, while other countries contributed RMB 10,651 thousand[20] Finance Costs Total finance costs for the period were RMB 314 thousand, a significant decrease from RMB 2,660 thousand in the prior period, primarily due to a notable reduction in bank loan interest Finance Cost Items | Finance Cost Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Interest on Bank Loans | 157 | 2,492 | | Interest on Discounted Bills Receivable | 155 | 144 | | Interest on Lease Liabilities | 2 | 24 | | Total | 314 | 2,660 | Profit Before Tax Profit before tax was RMB 130,317 thousand, a significant decrease from the prior period; this section details various expenses and income affecting profit before tax, including cost of sales, depreciation, R&D costs, employee benefit expenses, inventory write-downs, impairment loss on intangible assets, and government grants Expense/Income Items | Expense/Income Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Cost of Sales | 316,446 | 239,535 | | Depreciation of Property, Plant and Equipment | 37,518 | 33,451 | | Research and Development Costs | 56,816 | 43,883 | | Employee Benefit Expenses | 108,715 | 106,147 | | Write-down of Inventories to Net Realizable Value | 21,569 | 24,492 | | Impairment Loss on Intangible Assets | 7,622 | - | | Government Grants | (6,375) | (113,567) | Income Tax Total income tax expense for the period was RMB 28,609 thousand, a decrease from RMB 65,169 thousand in the prior period, with no taxable profit generated in Hong Kong and taxes for Mainland China subsidiaries calculated at local applicable rates Income Tax Items | Income Tax Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Current Income Tax Expense | 19,527 | 41,256 | | Deferred Tax | 9,421 | 24,053 | | Total Tax Expense for the Period | 28,609 | 65,169 | - The Group generated no taxable profit in Hong Kong, and taxes for its Mainland China subsidiaries are calculated at local applicable tax rates[25] Dividends The Board resolved to declare an interim dividend of HKD 0.015 per share for the year ending December 31, 2025, consistent with the prior period; total final and special dividends declared for the previous year in this period amounted to RMB 112,229 thousand Dividend Types | Dividend Type | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Final Dividend: HKD 0.048 per ordinary share (2023: HKD 0.065) | 67,337 | 90,786 | | Special Dividend: HKD 0.032 per ordinary share (2023: Nil) | 44,892 | - | | Interim Dividend: HKD 0.015 per ordinary share | 20,710 | 20,594 | - The Board declared an interim dividend of HKD 0.015 per share for the year ending December 31, 2025, totaling approximately RMB 20,710 thousand[26] Earnings Per Share Attributable to Owners of the Parent This section details the calculation and results for basic and diluted earnings per share, with basic EPS for the first half of 2025 at RMB 0.06961, a significant decrease from RMB 0.3286 in the prior period Basic Earnings Per Share Basic earnings per share is calculated by dividing the profit attributable to owners of the parent for the period by the weighted average number of ordinary shares outstanding during the period | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Parent (thousand RMB) | 104,572 | 493,046 | | Weighted Average Number of Ordinary Shares Outstanding for Basic EPS (thousand shares) | 1,502,199 | 1,500,393 | | Basic Earnings Per Share (RMB) | 0.06961 | 0.3286 | Diluted Earnings Per Share Diluted earnings per share calculation considers the dilutive effect of ordinary shares, such as share options, and was RMB 0.06958 for the first half of 2025 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Parent (thousand RMB) | 104,572 | 493,046 | | Weighted Average Number of Ordinary Shares Outstanding for Basic EPS (thousand shares) | 1,502,199 | 1,500,393 | | Dilutive Effect – Weighted Average Number of Ordinary Shares: Share Options (thousand shares) | 822 | 1,935 | | Weighted Average Number of Ordinary Shares Adjusted for Dilutive Effect (thousand shares) | 1,503,021 | 1,502,328 | | Diluted Earnings Per Share (RMB) | 0.06958 | 0.3282 | Inventories As of June 30, 2025, the Group's total inventories amounted to RMB 254,100 thousand, a decrease from RMB 308,241 thousand as of December 31, 2024, primarily reflecting reductions in finished goods and raw materials Inventory Categories | Inventory Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Raw Materials | 87,275 | 98,128 | | Work-in-progress | 52,825 | 55,484 | | Finished Goods | 114,000 | 154,629 | | Total | 254,100 | 308,241 | Trade and Bills Receivables As of June 30, 2025, the net book value of trade and bills receivables was RMB 247,272 thousand, a decrease from RMB 267,886 thousand as of December 31, 2024; the Group primarily transacts with customers on credit, with a typical credit period of three months for major customers Receivables | Receivables | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade Receivables | 125,335 | 123,895 | | Bills Receivables | 123,534 | 145,588 | | Impairment | (1,597) | (1,597) | | Net Book Value | 247,272 | 267,886 | - The aging analysis of trade receivables shows that amounts due within 90 days account for the largest proportion, totaling RMB 97,322 thousand[31] Trade and Bills Payables As of June 30, 2025, total trade and bills payables amounted to RMB 204,884 thousand, a decrease from RMB 221,560 thousand as of December 31, 2024; trade payables are non-interest bearing and generally settled on a 90-day credit term Payables | Payables | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Within 90 days | 154,804 | 153,810 | | 91 to 180 days | 47,880 | 66,682 | | 181 to 270 days | 506 | 679 | | 271 to 360 days | 547 | 38 | | Over one year | 1,147 | 351 | | Total | 204,884 | 221,560 | - Trade payables are non-interest bearing and generally settled on a 90-day credit term[32] Management Discussion and Analysis This section provides management's discussion and analysis of the Group's performance, industry environment, business review, product R&D, new products, patent authorization, other matters, honors, and outlook Overview of Results The Group's revenue grew by 9.2% to RMB 630,424 thousand in the first half of 2025; however, profit attributable to owners of the parent significantly decreased by 78.8% to RMB 104,572 thousand, mainly due to non-recurring profits in the prior period from the disposal of an associate and government subsidies, with operating profit (excluding non-recurring items) decreasing by 17.1% | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Revenue | 630,424 | 577,447 | 9.2% | | Profit Attributable to Owners of the Parent | 104,572 | 493,046 | -78.8% | | Operating Profit (excluding non-recurring profit) | 104,572 | 126,127 | -17.1% | - The decline in profit is primarily attributed to the Suzhou Dawnrays Shanfeng Road plant and Lanzhou Dawnrays not yet achieving scaled commercial production, price reductions for "An" series products due to centralized procurement, and increased R&D expenses[33] Industry Environment In the first half of 2025, the pharmaceutical industry faced a complex landscape of policy changes, market competition, and quality enhancement; the National Healthcare Security Administration optimized drug centralized procurement policies, strengthening quality assessment and supervision, expanding procurement coverage, and increasing price transparency, while an aging population and rising incidence of chronic and severe diseases created a broad market for generic drugs, and AI technology profoundly impacted R&D, production, and marketing - In 2025, centralized procurement entered a new phase, with the National Healthcare Security Administration optimizing drug centralized procurement policies, strengthening quality assessment and supervision, and promoting special governance of drug online listing prices[34] - Global aging and the rising incidence of chronic diseases, tumors, and mental illnesses create a broad market space for generic drugs[34] - The application of AI technology has a significant impact on various aspects of the pharmaceutical industry, including R&D, production, and marketing, driving pharmaceutical enterprises towards transformation, innovation, and industrial collaboration[35] Business Review Overall sales increased by 9.2% year-on-year during the period; product line performance varied, with "An" series sales decreasing by 22.1% due to centralized procurement, antiviral drug Entecavir Dispersible Tablets sales growing by 8.7%, Fujian Dawnrays product series sales increasing by 16.6%, and Cefazolin powder injection sales growing by 55.7%, while intermediates and APIs sales significantly increased by 142.7% due to new plant operations - Overall sales increased by 9.2% compared to the same period last year[36] Product Category Sales Changes | Product Category | Sales Volume Change | Sales Value Change | | :--- | :--- | :--- | | "An" Series Products | Decreased by 5.7% | Decreased by 22.1% | | Entecavir Dispersible Tablets | Increased by 14.0% | Increased by 8.7% | | Fujian Dawnrays Product Series | Increased by 19.5% | Increased by 16.6% | | Cefazolin Powder for Injection | Increased by 47.9% | Increased by 55.7% | | Intermediates and APIs | Increased by 244.8% | Increased by 142.7% | - The significant increase in intermediates and APIs sales is primarily due to the successive commercial production at Suzhou Dawnrays Shanfeng Road plant and Lanzhou Dawnrays[37] Product Research and Development The Group leverages the Suzhou Dawnrays Advanced Technology Research Institute as a platform to coordinate R&D teams, undertaking generic drug R&D and technical optimization, continuously investing resources in technological improvements and product R&D innovation, and seeking external collaborations; to integrate R&D resources, the Group has divested its equity in Nanjing Fumeiruisin Technology Co., Ltd., a subsidiary with negative net book assets - The Group utilizes the Suzhou Dawnrays Advanced Technology Research Institute as a platform to coordinate and manage R&D technical teams, undertaking the research and development of raw materials and preparations for generic drugs[38] - The Group will continue to invest more resources in technological improvements and product R&D innovation, while actively seeking various forms of external cooperation opportunities[38] - To integrate R&D resources, the Group has sold all its equity in Nanjing Fumeiruisin Technology Co., Ltd., a subsidiary with negative net book assets, to an independent third party, which will not have a significant impact on R&D projects[38] New Products and Patent Authorization During the period, the Group received approval from the National Medical Products Administration's Center for Drug Evaluation for 2 specifications (Rivaroxaban Tablets 10mg and 15mg), submitted registration applications for 6 other specifications (3 APIs, 3 preparations) which were accepted, and obtained 2 patent certificates, including one utility model patent and one invention patent - During the period, 2 specifications (Rivaroxaban Tablets 10mg and Rivaroxaban Tablets 15mg) received approval from the National Medical Products Administration's Center for Drug Evaluation[39] - Additionally, 6 specifications (3 APIs, 3 preparations) have been submitted for registration to the Center for Drug Evaluation and accepted[39] - The Group obtained 2 patent certificates: "A Particle Counting Machine Vibration Device" (utility model patent) and "Tedizolid Phosphate for Injection Powder and its Preparation Method" (invention patent)[40] Other Matters The Group consistently adheres to a quality-first management policy, with product quality steadily improving; corporate governance, social responsibility, and environmental safety initiatives are progressing orderly, and significant advancements have been made in optimizing company structure, employee training, performance appraisal reform, digitalization, and risk control - The Group adheres to a quality-first management policy, with product quality steadily improving[41] - Corporate governance, social responsibility, and environmental safety initiatives are progressing orderly, and the company structure has been further optimized[41] - Significant progress has been made in employee training, performance appraisal reform, digitalization, and risk control[41] Honors In the first half of 2025, several of the Group's subsidiaries received multiple honors, including "Special Award for Outstanding Economic Contribution Enterprise," "Outstanding Employer" recognition, "Fujian Province New Excellent Pharmaceutical and Classic Traditional Chinese Medicine Products" certification, and "Specialized, Refined, Unique, and Novel" SME certification - Fujian Dawnrays Pharmaceutical Co., Ltd. was awarded the "2024 Special Award for Outstanding Economic Contribution Enterprise" by the Licheng District People's Government and the "2024 Outstanding Economic Contribution (Taxation of RMB 50 million - 100 million)" honor by the Putian Municipal People's Government[42] - Suzhou Dawnrays Pharmaceutical Co., Ltd. was awarded the "2025 Outstanding Employer" honor by 51job[42] - Lanzhou Dawnrays Pharmaceutical Co., Ltd. was recognized as a "Specialized, Refined, Unique, and Novel" SME by the Gansu Provincial Department of Industry and Information Technology[42] Outlook Facing intensifying competition in the generic drug industry and deepening healthcare cost control policies, the Group will continue to increase R&D investment, focus on core areas, combine imitation with innovation, and actively explore the broader health and non-medical insurance consumer goods markets to create a second growth curve; simultaneously, it will uphold quality-first principles, optimize production processes, reduce costs, expand domestic and international markets through multiple channels, apply AI and other digital technologies to enhance operational efficiency, and improve talent development and incentive mechanisms - The Group will continue to increase R&D investment, leverage the Advanced Technology Research Institute platform, focus on core areas, combine imitation with innovation, and strengthen cooperation with universities and research institutions[43] - Actively explore the broader health sector and non-medical insurance healthcare consumer goods, seek external partners, expand new businesses, and create a second growth curve[43] - Continue to uphold the business philosophy of customer-first and quality-first, organize production strictly in accordance with GMP requirements, and optimize production processes, introduce advanced equipment and technology, and reduce production costs[43] - For the domestic market, actively participate in centralized drug procurement to expand market share; for the international market, systematically carry out international certification work[44] - Formulate a five-year plan, from business digitalization and digital empowerment to AI intelligent integration and innovation, applying new technologies to R&D, production, sales, and management to build a digital technology platform[44] - Improve talent recruitment plans, implement three major human resource systems, establish a scientific and reasonable talent development and career progression system, and enhance performance management and incentive mechanisms[45] Financial Review This section provides a financial review of the Group's sales, gross profit, expenses, segment profit, profit attributable to owners of the parent, and asset profitability analysis Sales and Gross Profit During the period, turnover increased by 9.2% to RMB 630,424 thousand, with finished drug sales growing by 5.2% and intermediates and APIs sales significantly increasing by 142.7%; finished drug sales accounted for 93.6% of total turnover, while gross profit decreased by 7.1% year-on-year to RMB 313,978 thousand, and gross profit margin declined by 8.7 percentage points to 49.8%, mainly due to high production costs for intermediates and APIs that have not yet reached full capacity and decreased gross profit for "An" series products | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Turnover | 630,424 | 577,447 | 9.2% | | Finished Drug Sales | 590,208 | 560,878 | 5.2% | | Intermediates and APIs Sales | 40,216 | 16,569 | 142.7% | | Gross Profit | 313,978 | 337,912 | -7.1% | | Gross Profit Margin | 49.8% | 58.5% | -8.7 percentage points | - Finished drug sales accounted for approximately 93.6% of total sales, a 3.5 percentage point decrease from the previous year[46] - Export sales amounted to approximately RMB 10,651 thousand, accounting for 1.7% of total turnover, a year-on-year increase of 229.0%[46] Expenses Total expenses for the period were approximately RMB 214,522 thousand, accounting for 34.0% of turnover, a 0.5 percentage point decrease from the prior period; selling expenses decreased, while administrative expenses, R&D expenses, and other expenses all increased Expense Categories | Expense Category | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 56,830 | 68,911 | -12,081 (Decreased by 17.5%) | | Administrative Expenses | 67,491 | 54,148 | +13,343 (Increased by 24.6%) | | Research and Development Expenses | 56,816 | 43,883 | +12,933 (Increased by 29.5%) | | Other Expenses | 33,071 | 29,498 | +3,573 (Increased by 12.1%) | | Total Expenses | 214,522 | 199,140 | +15,382 (Increased by 7.7%) | - The decrease in selling expenses is mainly due to the increased proportion of centralized procurement products; the increase in administrative expenses is primarily due to the reclassification of surtaxes and intangible asset amortization expenses; R&D expenses increased by 29.5%; the increase in other expenses is mainly due to inventory write-downs and idle capacity losses from high unit costs of Suzhou Dawnrays and Lanzhou Dawnrays products, as well as impairment loss on intangible assets of Nanjing Fumeiruisin[49] Segment Profit Finished drug segment profit decreased to RMB 250,864 thousand, mainly due to the impact of centralized procurement policies leading to a decline in gross profit; the intermediates and APIs segment reported a loss of approximately RMB 25,216 thousand, similar to the prior period, primarily due to increased costs from the Suzhou Dawnrays Shanfeng Road plant and Lanzhou Dawnrays not yet reaching full production capacity Segment Profit/Loss | Segment Profit/Loss | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Finished Drugs Segment | 250,864 | 264,462 | -13,598 | | Intermediates and APIs Segment | (25,216) | (25,858) | +642 | - The decrease in finished drug segment profit is mainly due to the impact of centralized procurement on "An" series products, leading to a decline in gross profit[50] - The loss in the intermediates and APIs segment is primarily due to increased costs resulting from the Suzhou Dawnrays Shanfeng Road plant and Lanzhou Dawnrays not yet reaching full production capacity[50] Profit Attributable to Owners of the Parent Profit attributable to owners of the parent for the period was RMB 104,572 thousand, a year-on-year decrease of 78.8%; excluding the net gain from the disposal of Kangrong Dongfang equity and government subsidies for Suzhou Dawnrays in 2024, operating profit decreased by 17.1% year-on-year | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Parent | 104,572 | 493,046 | -78.8% | | Excluding Non-recurring Profit | 104,572 | 126,127 | -17.1% | - Non-recurring profit in 2024 included a net gain of approximately RMB 277,627 thousand from the disposal of a 35% equity interest in Kangrong Dongfang and a net gain of approximately RMB 89,292 thousand from government subsidies for equipment validation at Suzhou Dawnrays Tianling Road[51] Asset Profitability Analysis As of June 30, 2025, the return on net assets was 3.2%, a significant decrease from 15.1% in 2024; the current ratio and quick ratio were 4.78 and 4.21, respectively; accounts receivable turnover period was approximately 74 days, a 22-day reduction year-on-year, and inventory turnover period was approximately 160 days, an 8-day reduction year-on-year, indicating improved management of receivables and inventories | Metric | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Return on Net Assets | 3.2% | 15.1% | | Current Ratio | 4.78 | - | | Quick Ratio | 4.21 | - | | Accounts Receivable (including trade and bills receivables) Turnover Period | Approx. 74 days | (Decreased by 22 days year-on-year) | | Inventory Turnover Period | Approx. 160 days | (Decreased by 8 days year-on-year) | - The decrease in accounts receivable turnover period is mainly due to strengthened management of accounts receivable[52] - The decrease in inventory turnover period is mainly due to Suzhou Dawnrays' lean production activities reducing inventory[52] Liquidity and Financial Resources This section details the Group's cash and financial assets, cash flow, bank facilities, debt ratio, and inventory balance, providing an overview of its liquidity and financial health Cash and Financial Assets As of June 30, 2025, the Group held cash and bank balances of approximately RMB 1,139,131 thousand, and financial assets at fair value through profit or loss totaling approximately RMB 281,353 thousand, including investments in listed shares and principal-protected floating-rate structured deposits Asset Categories | Asset Category | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Cash and Bank Balances | 1,139,131 | 1,158,261 | | Financial Assets at Fair Value Through Profit or Loss | 281,353 | 227,135 | | Bills Receivable | 123,534 | 145,588 | - Financial assets at fair value through profit or loss include approximately RMB 15,356 thousand in Hong Kong listed share investments and approximately RMB 245,200 thousand in principal-protected floating-rate structured deposits[53][55] Cash Flow During the period, net cash inflow from operating activities was approximately RMB 201,983 thousand, net cash outflow from investing activities was approximately RMB 439,071 thousand, and net cash outflow from financing activities was approximately RMB 127,398 thousand, resulting in a net decrease in cash and cash equivalents of approximately RMB 364,486 thousand Cash Flow Activities | Cash Flow Activity | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 201,983 | 171,454 | | Net Cash Outflow from Investing Activities | (439,071) | 29,185 (Inflow) | | Net Cash Outflow from Financing Activities | (127,398) | (31,428) | | Net Change in Cash and Cash Equivalents | (364,486) | 169,211 (Increase) | Bank Facilities and Debt Ratio As of June 30, 2025, the Group's total bank facilities amounted to RMB 1,713,000 thousand, interest-bearing bank and other borrowings were approximately RMB 8,995 thousand, and the debt ratio was 0.2%, indicating low financial leverage Bank Facilities and Debt Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Bank Facilities | RMB 1,713,000 thousand | RMB 1,613,000 thousand | | Interest-bearing Bank and Other Borrowings | RMB 8,995 thousand | RMB 29,864 thousand | | Debt Ratio | 0.2% | 0.7% | Inventory Balance As of June 30, 2025, the Group's inventory balance was approximately RMB 254,100 thousand, a decrease from RMB 308,241 thousand as of December 31, 2024 Inventory Balance | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Inventory Balance | 254,100 | 308,241 | Major Investments and Asset Changes This section outlines the Group's major investments and asset changes, including the Lanzhou Dawnrays project, Suzhou Dawnrays relocation project, divestment of Fumeiruisin equity, and goodwill and capital expenditure commitments Lanzhou Dawnrays Project Lanzhou Dawnrays, an API and intermediate production base, has a registered capital of RMB 540,344 thousand, with Suzhou Dawnrays investing RMB 34,594 thousand in subscribed capital during the period; Phase I of the project is completed and in production, while Phase II plans an investment of RMB 29,000 thousand for new product equipment additions and process improvements - Lanzhou Dawnrays has a registered capital of RMB 540,344 thousand, with Suzhou Dawnrays investing RMB 34,594 thousand in subscribed capital during the period[57] - Phase I of the project has been completed and put into production, and Phase II plans an investment of RMB 29,000 thousand for new product equipment additions and process improvements[57] Suzhou Dawnrays Relocation Project The overall relocation project of Suzhou Dawnrays Tianling Road plant is completed, with RMB 175,595 thousand in demolition compensation received, and the remaining balance being pursued; currently, the Shanfeng Road environmental protection building and Minfeng Road plant workshop renovation projects are underway, with an investment of approximately RMB 27,000 thousand - The overall relocation project of Suzhou Dawnrays Tianling Road plant has been completed, and RMB 175,595 thousand in demolition compensation has been received[57] - Currently, the Shanfeng Road environmental protection building project and Minfeng Road plant workshop renovation project are underway, with a total investment of approximately RMB 27,000 thousand[57] Divestment of Fumeiruisin Equity To integrate R&D resources, the Group transferred its 65% equity interest in Nanjing Fumeiruisin Technology Co., Ltd., a controlled subsidiary with negative net book assets, to an independent third party for RMB 100 thousand on June 9, 2025 - On June 9, 2025, the Group transferred its 65% equity interest in Nanjing Fumeiruisin Technology Co., Ltd. to an independent third party for RMB 100 thousand[58] - The reason for the disposal is to integrate R&D resources, as Fumeiruisin's net book assets had become negative due to continuous losses over the years[58] Goodwill and Capital Expenditure Commitments As of June 30, 2025, the goodwill of RMB 241,158 thousand arising from the acquisition of Fujian Dawnrays Pharmaceutical Co., Ltd. showed no signs of impairment; the Group had contracted but unprovided capital expenditure commitments for plant and machinery totaling approximately RMB 41,513 thousand, mainly related to the Lanzhou Dawnrays and Suzhou Dawnrays projects - As of June 30, 2025, the goodwill of RMB 241,158 thousand arising from the acquisition of Fujian Dawnrays Pharmaceutical Co., Ltd. showed no signs of impairment[58] - Contracted but unprovided capital expenditure commitments for plant and machinery totaled approximately RMB 41,513 thousand, mainly involving the Lanzhou Dawnrays project and the Suzhou Dawnrays relocation and renovation projects[58] Other Disclosures This section covers other disclosures, including foreign currency and treasury policy, employees and remuneration policy, asset pledges, contingent liabilities, future major investments and expected funding sources, and purchase, redemption, or sale of listed securities Foreign Currency and Treasury Policy During the period, the Group recorded an exchange gain of approximately RMB 1,103 thousand, with most business transactions settled in RMB, indicating limited foreign exchange risk, primarily related to HKD dividend payments; the Group will continue to monitor foreign exchange and interest rate market conditions and hedge risks when necessary - An exchange gain of approximately RMB 1,103 thousand was recorded during the period (2024: loss of approximately RMB 2,689 thousand)[59] - Most of the Group's business transactions are settled in RMB, so foreign exchange risk is not significant, primarily related to HKD dividend payments[59] - The Group will continue to monitor foreign exchange and interest rate market conditions and, when necessary, hedge foreign exchange risk with forward foreign exchange contracts and interest rate risk with interest rate swap contracts[59] Employees and Remuneration Policy As of June 30, 2025, the Group had 1,116 employees, with total staff costs for the period amounting to approximately RMB 108,715 thousand, mainly due to annual salary adjustments; the Group values talent, offering market-competitive remuneration, retirement plans, share option schemes, and medical benefits Employees and Remuneration Policy | Metric | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Number of Employees | 1,116 | - | | Total Staff Costs (thousand RMB) | 108,715 | 106,147 | - The increase in staff costs is primarily due to annual salary adjustments[60] - Remuneration policy refers to market compensation benchmarks and employee qualifications, offering defined contribution retirement plans, share option schemes, and medical benefits[60] Asset Pledges As of June 30, 2025, the Group had no assets pledged to banks to secure credit facilities - As of June 30, 2025, the Group had no assets pledged to banks to secure credit facilities granted to its subsidiaries[61] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[62] Future Major Investments and Expected Funding Sources Apart from disclosed capital expenditure commitments, increased registered capital for subsidiaries, and capital investments in relocation projects, the Group has no other future major investment plans; the Group possesses sufficient financial and internal resources but may still use bank loans or internal resources to fund capital expenditures - Apart from disclosed capital expenditure commitments, increased registered capital for subsidiaries, and capital investments in relocation projects, the Group has no other future major investment plans[63] - The Group has sufficient financial and internal resources, but may still use bank loans or its internal resources to fund the aforementioned capital expenditure commitments[58] Purchase, Redemption or Sale of Listed Securities For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[64] Corporate Governance This section details the Company's compliance with the Corporate Governance Code, adherence to the Standard Code for Securities Transactions, and the role of the Audit Committee Compliance with Corporate Governance Code For the six months ended June 30, 2025, the Company consistently complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, with one exception where a non-executive director was unable to attend the annual general meeting due to other business arrangements - The Company has consistently complied with the Corporate Governance Code in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[65] - There was one deviation: Mr. Liang Kangmin, a non-executive director, was unable to attend the annual general meeting due to other business arrangements[65] Standard Code for Securities Transactions The Company has adopted the Standard Code in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the Company's securities and confirms that directors have complied with this code during the reporting period - The Company has adopted the Standard Code in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the Company's securities[66] - During the six months ended June 30, 2025, the directors have complied with the standards set out in the Standard Code[66] Audit Committee The Company has established an Audit Committee in compliance with Listing Rule 3.21 to oversee the financial reporting system, risk management, and internal control systems; the Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the period - The Company established an Audit Committee in compliance with Listing Rule 3.21 to oversee the Group's financial reporting system, risk management, and internal control systems[67] - The Audit Committee has reviewed the Company's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, prior to their submission to the Board for approval[67] Dividends and Others This section covers the interim dividend declaration, suspension of share transfer registration for dividend entitlement, and an acknowledgement of gratitude Interim Dividend The Board resolved to declare an interim dividend of HKD 0.015 per share for the year ending December 31, 2025, totaling approximately HKD 22,546 thousand - The Board resolved to declare an interim dividend of HKD 0.015 per share for the year ending December 31, 2025, totaling approximately HKD 22,546 thousand (equivalent to approximately RMB 20,710 thousand)[68] Suspension of Share Transfer Registration To determine eligibility for the interim dividend, the Company will suspend share transfer registration from September 18 to September 19, 2025, with the record date being September 19, 2025 - To determine eligibility for the interim dividend, the Company will suspend share transfer registration from September 18 to September 19, 2025 (both dates inclusive)[69] - The record date for determining shareholders' entitlement to receive the interim dividend is Friday, September 19, 2025[70] Acknowledgement The Chairman, on behalf of the Board, expresses sincere gratitude to shareholders, directors, business partners, management, and employees for their support to the Group during the period - The Chairman, on behalf of the Board, expresses sincere gratitude to the Company's shareholders, directors, and all business partners, management, and employees of the Group for their support during the period[71]