瑛泰医疗(01501) - 2025 - 中期业绩

Financial Highlights The Group achieved significant revenue growth in H1 2025, primarily driven by increased sales of interventional medical devices and agency business, leading to profit growth despite a lower gross margin, while EPS slightly decreased and no interim dividend was declared 2025 H1 Key Financial Data Comparison (RMB thousands) | Indicator | 2025 H1 | 2024 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 461,075 | 392,322 | 17.52% | | Gross Profit | 270,661 | 246,768 | 9.68% | | Profit for the Period | 102,436 | 99,178 | 3.29% | | Basic EPS (RMB) | 0.57 | 0.58 | -1.72% | | Diluted EPS (RMB) | 0.57 | 0.58 | -1.72% | - Revenue growth primarily due to increased sales of interventional medical devices (growth of 13.57% to RMB 392.37 million) and agency business (growth of 118.69% to RMB 32.41 million)[4] - Gross margin decreased from 62.90% to 58.70%, mainly due to increased sales of lower-margin agency business[4] - The Board resolved not to declare any interim dividend for the reporting period[4] Consolidated Statement of Profit or Loss This section presents the unaudited consolidated statement of profit or loss for the six months ended June 30, 2025, detailing key financial metrics such as revenue, cost of sales, gross profit, various expenses, and profit for the period, with comparative figures for the prior year Key Data from Consolidated Statement of Profit or Loss (RMB thousands) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue | 461,075 | 392,322 | | Cost of sales | (190,414) | (145,554) | | Gross profit | 270,661 | 246,768 | | Other income | 30,468 | 23,941 | | Operating profit | 124,207 | 111,781 | | Profit before tax | 120,707 | 110,749 | | Income tax | (18,271) | (11,571) | | Profit for the period | 102,436 | 99,178 | - Profit attributable to equity holders of the Company was RMB 98,528 thousand, and profit attributable to non-controlling interests was RMB 3,908 thousand[6] Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, showing the impact of profit for the period and other comprehensive income, primarily exchange differences, on total comprehensive income Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit for the period | 102,436 | 99,178 | | Exchange differences on translation of financial statements of an overseas subsidiary | (569) | 249 | | Total comprehensive income for the period | 101,867 | 99,427 | | Total comprehensive income attributable to equity holders of the Company | 97,959 | 100,787 | | Total comprehensive income attributable to non-controlling interests | 3,908 | (1,360) | Consolidated Statement of Financial Position This section provides the consolidated statement of financial position as of June 30, 2025, detailing the composition of non-current assets, current assets, current liabilities, non-current liabilities, and capital and reserves, with comparative figures as of December 31, 2024 Key Data from Consolidated Statement of Financial Position (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total non-current assets | 2,007,781 | 1,367,748 | | Total current assets | 869,338 | 892,133 | | Total current liabilities | 695,537 | 434,456 | | Total non-current liabilities | 222,208 | 38,933 | | Net assets | 1,959,374 | 1,786,492 | | Total equity attributable to equity holders of the Company | 1,875,900 | 1,774,227 | | Non-controlling interests | 83,474 | 12,265 | - Non-current assets significantly increased, mainly due to increases in intangible assets (from RMB 168,739 thousand to RMB 422,777 thousand) and goodwill (new RMB 306,100 thousand), related to the acquisition of a subsidiary[10][53] - Current liabilities substantially increased, primarily driven by growth in loans and borrowings (from RMB 227,261 thousand to RMB 373,472 thousand) and trade and other payables (from RMB 163,740 thousand to RMB 205,623 thousand)[11] Notes This section provides detailed notes to the interim financial report, covering the basis of preparation, changes in accounting policies, revenue and segment reporting, details of various income and expenses, income tax, earnings per share calculation, balance sheet items, and explanations for subsidiary acquisitions and capital structure changes Basis of Preparation This interim financial report is prepared in accordance with HKAS 34 and the Listing Rules, unaudited but reviewed by KPMG - The interim financial report is prepared in accordance with HKAS 34 "Interim Financial Reporting" and authorized for issue[12] - The report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[14] Changes in Accounting Policies The Group applied HKAS 21 (amended) "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability" in this period, but it had no material impact - The Group has applied HKAS 21 (amended) "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability"[15] - The amendment had no material impact on this interim report as the Group did not undertake foreign currency transactions where foreign currency is not exchangeable into another currency[15] Revenue and Segment Reporting This section details the Group's revenue classification by major products and geographical locations, and provides performance reports and reconciliation information for the interventional cardiology business and other segments Revenue Disaggregation The Group's revenue primarily comes from sales of interventional medical devices, medical standard parts, agency business, molds and others, with minor rental income, and a diversified customer base Revenue by Major Product (RMB thousands) | Product Category | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Sales of interventional medical devices | 392,366 | 345,476 | | - Cardiovascular devices | 292,478 | 268,414 | | - Neuro, peripheral and other devices | 99,888 | 77,062 | | Sales of medical standard parts | 31,412 | 26,743 | | Agency business | 32,408 | 14,818 | | Molds and others | 3,154 | 3,728 | | Rental income | 1,735 | 1,557 | | Total revenue | 461,075 | 392,322 | Revenue by Geographical Location (RMB thousands) | Geographical Location | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Mainland China | 341,016 | 279,623 | | Europe | 25,188 | 28,248 | | United States | 29,348 | 21,157 | | Other countries and regions | 65,523 | 63,294 | | Total revenue | 461,075 | 392,322 | Segment Reporting The Group identifies interventional cardiology as a reportable segment, with other segments combined, both showing revenue and net profit growth Segment Performance (RMB thousands) | Indicator | Interventional Cardiology (2025) | All Other (2025) | Total (2025) | Interventional Cardiology (2024) | All Other (2024) | Total (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | External customer revenue | 392,823 | 68,252 | 461,075 | 343,842 | 48,480 | 392,322 | | Segment net profit | 91,422 | 11,297 | 102,719 | 95,487 | 6,724 | 102,211 | - External customer revenue for interventional cardiology business increased by 14.25% year-on-year, while external customer revenue for all other segments increased by 40.78%[24][25] - Total segment net profit increased from RMB 102,211 thousand in H1 2024 to RMB 102,719 thousand in H1 2025[26] Other Income The Group's other income significantly grew in the reporting period, primarily due to a substantial increase in government grants, while net gains from financial instruments and foreign exchange gains decreased Other Income Details (RMB thousands) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Government grants | 23,775 | 7,810 | | Interest income | 5,610 | 4,248 | | Realized and unrealized net gains from financial instruments measured at fair value through profit or loss | 1,941 | 8,131 | | Foreign exchange (loss)/gain | (739) | 2,029 | | Others | (119) | 1,723 | | Total | 30,468 | 23,941 | - Government grants are mainly for encouraging R&D projects and compensating capital expenditures for medical device production lines, with no unfulfilled conditions or contingencies during the reporting period[27] Profit Before Tax This section details the items deducted from and included in profit before tax, including finance costs, depreciation and amortization, impairment losses on trade and other receivables, inventory write-down provisions, and R&D expenses Profit Before Tax Impact Items (RMB thousands) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Finance costs | 2,915 | 1,032 | | - Interest on lease liabilities | 445 | 379 | | - Interest on loans and borrowings | 2,470 | 653 | | Depreciation and amortization | 44,426 | 42,134 | | - Property, plant and equipment | 37,553 | 38,287 | | - Right-of-use assets | 2,429 | 1,902 | | - Intangible assets | 4,444 | 1,945 | | Provision for/(reversal of) impairment losses on trade and other receivables | 239 | (652) | | Provision for inventory write-down | 1,787 | 700 | | R&D expenses (expensed) | 70,237 | 70,754 | | Total R&D costs | 91,672 | 85,931 | - Finance costs significantly increased, primarily due to higher interest on loans and borrowings[28] - Amortization of intangible assets substantially increased, reflecting the company's growing investment in intangible assets[28] Income Tax This section details the Group's income tax components, including current and deferred tax, and explains China's statutory corporate income tax rates, preferential rates for high-tech and small-profit enterprises, and additional deductions for R&D expenses, as well as Hong Kong profits tax rates Income Tax Details (RMB thousands) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Current tax | 16,536 | 10,670 | | Deferred tax | 1,735 | 901 | | Total | 18,271 | 11,571 | - China's statutory income tax rate is 25%, but eligible high-tech enterprises enjoy a 15% preferential rate, and small-profit enterprises enjoy a 5% preferential rate[32][33] - Qualified R&D expenses are 100% additionally deductible from taxable income[32] Earnings Per Share This section details the calculation methods for basic and diluted earnings per share, including adjusted profit attributable to equity holders and weighted average number of ordinary shares used Basic Earnings Per Share Calculation (RMB thousands/thousand shares) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Adjusted profit attributable to equity holders | 92,875 | 94,783 | | Weighted average number of ordinary shares | 164,307 | 164,707 | | Basic EPS (RMB) | 0.57 | 0.58 | Diluted Earnings Per Share Calculation (RMB thousands/thousand shares) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Adjusted profit attributable to equity holders (diluted) | 96,550 | 97,660 | | Weighted average number of ordinary shares for diluted EPS | 170,807 | 169,707 | | Diluted EPS (RMB) | 0.57 | 0.58 | Inventories This section lists the composition of inventories as of June 30, 2025, including raw materials, work-in-progress, finished goods, and goods in transit, and discloses inventory write-down provisions recognized during the period Inventory Composition (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | 94,839 | 71,310 | | Work-in-progress | 35,972 | 27,039 | | Finished goods | 64,189 | 63,204 | | Goods in transit | 2,456 | 786 | | Total | 197,456 | 162,339 | - For the six months ended June 30, 2025, an inventory write-down provision of RMB 1.8 million was recognized, an increase from RMB 0.7 million in the prior period[38] Trade and Other Receivables This section details the composition of trade and other receivables, including amounts due from third parties, related parties, investment deposits, government subsidies receivable, and other receivables, and provides an aging analysis of trade receivables Trade and Other Receivables, Net (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables, net | 85,861 | 115,073 | | Investment deposits | 14,201 | 496 | | Government subsidies receivable | 6,270 | – | | Other deposits and receivables | 17,910 | 3,357 | | Loss allowance for other receivables | (46) | (45) | | Trade and other receivables, net | 124,196 | 118,881 | Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 78,552 | 108,452 | | 3 to 6 months | 4,138 | 5,769 | | 6 to 9 months | 3,171 | 852 | | Total | 85,861 | 115,073 | Financial Assets at Fair Value Through Profit or Loss This section discloses the Group's financial assets at fair value through profit or loss, including non-current unlisted units in investment funds and unlisted equity investments, and current structured bank deposits, primarily in the life sciences and healthcare industry Financial Assets at Fair Value Through Profit or Loss (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current portion | 267,582 | 158,615 | | - Unlisted units in investment funds | 260,582 | 151,615 | | - Unlisted equity investments | 7,000 | 7,000 | | Current portion | – | 30,000 | | - Structured bank deposits | – | 30,000 | - Non-current financial assets are primarily invested in unlisted funds and a private Chinese entity, mainly for or further investment in the life sciences and healthcare industry[42] Cash and Cash Equivalents, Time Deposits and Restricted Bank Deposits This section lists the Group's period-end balances of cash and cash equivalents, time deposits, and restricted bank deposits, and explains the composition of bank cash and China's foreign exchange control regulations Cash and Deposits Details (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 480,212 | 521,954 | | - Bank balances | 480,163 | 521,928 | | - Cash on hand | 49 | 26 | | Time deposits and pledged deposits (current) | 10,641 | 2,560 | | - Time deposits | 10,641 | – | | - Restricted bank deposits | – | 2,560 | | Time deposits (non-current) | 10,216 | 40,106 | - Bank balances include deposits with banks in China with original maturities of less than three months, and outward remittances from Mainland China are subject to foreign exchange control regulations[44] - Non-current time deposits have a fixed return rate of 2.4% and a term of three years from the issue date[46] Trade and Other Payables This section lists the composition of the Group's trade and other payables, including trade payables, salaries payable, payables for property/plant/equipment purchases, amounts due to related parties, rebate liabilities, and other payables, and provides an aging analysis of trade payables Total Trade and Other Payables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 77,868 | 44,229 | | Salaries payable | 45,478 | 45,909 | | Payables for purchase of property, plant and equipment | 23,779 | 29,186 | | Amounts due to related parties | 407 | 86 | | Rebate liabilities | 9,452 | 6,962 | | Others | 48,639 | 37,368 | | Total | 205,623 | 163,740 | Aging Analysis of Trade Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 60,898 | 39,618 | | 3 to 6 months | 2,507 | 2,739 | | 6 months to 1 year | 6,353 | 98 | | Over 1 year | 8,110 | 1,774 | | Total | 77,868 | 44,229 | Loans and Borrowings This section discloses the Group's total bank loans and their repayment schedule analysis, including amounts, interest rates, and collateral for unsecured and secured bank loans Bank Loan Details (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unsecured bank loans | 283,359 | 217,249 | | Secured bank loans | 255,577 | 10,012 | | Total | 538,936 | 227,261 | Bank Loan Repayment Schedule (RMB thousands) | Repayment Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year or on demand | 373,472 | 227,261 | | After 1 year but within 2 years | 41,366 | – | | After 2 years but within 5 years | 93,074 | – | | After 5 years | 31,024 | – | | Total | 538,936 | 227,261 | - Of the secured bank loans, RMB 206.8 million is collateralized by the Company's equity interest in Hangzhou Weiqiang Medical Technology Co Ltd, with an annual interest rate of 2.70%[49] Acquisition of a Subsidiary This section details the Company's acquisition of a controlling interest in Hangzhou Weiqiang Medical Technology Co Ltd, including the acquisition agreement, consideration, assets and liabilities recognized at acquisition date, and resulting goodwill - The Company and Chenyue Weixin entered into a formal acquisition agreement on May 21, 2025, to acquire a total of 81.83% equity interest in Hangzhou Weiqiang for a total consideration of approximately RMB 512.8 million[51] - The Company will acquire a 51.70% controlling interest in Hangzhou Weiqiang for a consideration of approximately RMB 324.0 million[51] Assets and Liabilities Recognized on Acquisition of Hangzhou Weiqiang (RMB thousands) | Item | Amount Recognized on Acquisition Date | | :--- | :--- | | Property, plant and equipment | 18,208 | | Intangible assets | 236,132 | | Right-of-use assets | 15,398 | | Trade and other receivables | 7,988 | | Inventories | 38,538 | | Cash and cash equivalents | 12,770 | | Other current assets | 4,261 | | Trade and other payables | (134,634) | | Loans and borrowings | (122,080) | | Contract liabilities | (11,058) | | Lease liabilities | (17,610) | | Deferred tax liabilities | (13,211) | | Total identifiable net assets | 34,702 | | Goodwill | 306,100 | | Total consideration | 340,802 | - Goodwill is primarily attributable to Hangzhou Weiqiang's human skills, technical talent, and synergies from integration with the Group's existing vascular interventional business[54] Capital, Reserves and Dividends This section details the Company's share capital composition, share repurchases, dividend policy, and non-controlling interests' capital contributions Share Capital As of June 30, 2025, the Company had 176,000 thousand issued and fully paid ordinary shares, including domestic and H shares, consistent with year-end 2024 Issued and Fully Paid Ordinary Shares (thousand shares/RMB thousands) | Item | June 30, 2025 (thousand shares) | June 30, 2025 (RMB thousands) | December 31, 2024 (thousand shares) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Issued at beginning/end of period/year | 176,000 | 176,000 | 171,000 | 171,000 | | Shares issued during period/year | – | – | 5,000 | 5,000 | | Total ordinary shares issued at end of period/year | 176,000 | 176,000 | 176,000 | 176,000 | | - Domestic shares issued | 71,787 | 71,787 | 71,787 | 71,787 | | - H shares issued | 104,213 | 104,213 | 104,213 | 104,213 | Repurchase of Own Shares The Company did not repurchase shares on the HKEX for the six months ended June 30, 2025, but repurchased 800,000 H shares in 2024 - For the six months ended June 30, 2025, the Company did not repurchase any shares on the HKEX[56] 2024 Share Repurchase Details | Year/Month | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Price Paid (HKD thousands) | Total Price Paid (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2024 April | 800,000 | 26.00 | 26.00 | 20,875 | 18,919 | Dividends The Board does not recommend an interim dividend for the six months ended June 30, 2025, but a final dividend of RMB 0.27 per share was paid in 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[56] - In 2024, a final cash dividend of RMB 0.27 per share, totaling RMB 47.5 million, was paid for the year ended December 31, 2023, as approved by shareholders[60] Capital Contribution from Non-Controlling Interests The Company and Chenyue Weixin contributed capital to Hangzhou Weiqiang in June 2025, holding approximately 53.84% and 31.37% equity respectively, and Lingfeng Investment contributed RMB 4.0 million to Zhuhai Purui - The Company and Chenyue Weixin contributed RMB 94.8 million and RMB 55.2 million respectively to Hangzhou Weiqiang, after which the Company holds approximately 53.84% equity interest in Hangzhou Weiqiang[61] - Lingfeng Investment contributed RMB 4.0 million to Zhuhai Purui Intelligent Manufacturing Co Ltd[61] Management Discussion and Analysis This section provides management's detailed discussion and analysis of the Group's operating results and financial position for the first half, covering business overview, operational review, financial performance, liquidity, capital resources, use of proceeds, employees, investments, acquisitions, risk management, and corporate governance Business Overview The Group is a leading Chinese interventional medical device manufacturer with a complete industry chain, benefiting from healthcare reforms, achieving revenue growth, expanding product registrations, enhancing R&D, and broadening its distribution network - The Group is a leading interventional medical device manufacturer in China, possessing a complete industry chain covering mold and equipment design and development, product injection molding, assembly, packaging, and sterilization[62] - The Chinese government is deepening healthcare security system reforms and promoting DRG/DIP payment reforms; the Company, with its comprehensive medical device registration certificates, strong R&D capabilities, and leading brand marketing system, holds a competitive advantage[63] - Revenue for the reporting period was approximately RMB 461.08 million, a year-on-year increase of 17.52%, primarily due to a 13.57% increase in interventional medical device sales and a 118.69% increase in agency business sales[64][65] - As of June 30, 2025, the Group holds 43 NMPA Class III medical device registration certificates, 68 provincial/municipal NMPA Class II medical device registration certificates, 27 CE certifications, and 25 FDA approvals[66] - As of June 30, 2025, the Group holds 657 registered patents, 281 pending patent applications, and 28 registered software copyrights[67] - The distribution network covers 23 provinces, 4 municipalities, and 5 autonomous regions in China, reaching 3,735 domestic hospitals, and serves 313 overseas customers across 91 countries and regions[68] Review of Activities This section reviews key operating activities during the reporting period, including an increase in subsidiaries, establishment of new joint ventures, re-election and appointment of directors and supervisors, and the acquisition and subsequent capital contribution for a controlling interest in a target company Subsidiaries As of June 30, 2025, the Group owned 24 wholly-owned or controlled subsidiaries, an increase from 19 at year-end 2024, focusing on design and development of interventional/implantable medical devices - As of June 30, 2025, the Group owned 24 wholly-owned or controlled subsidiaries, an increase from 19 as of December 31, 2024[69] - Subsidiaries focus on the design and development of interventional/implantable medical devices for cardiovascular, neurological, peripheral, ENT, urological, and other fields, as well as related production equipment and molds[69] Establishment of Joint Ventures The Group established Shanghai Yingtai Investment Management Co Ltd and Shanghai Yingtai Shenghuo Trading Co Ltd, and invested RMB 100.0 million as a limited partner in Chenyao Xinchen Fund - The Company established Shanghai Yingtai Investment Management Co Ltd and Shanghai Yingtai Shenghuo Trading Co Ltd with related parties, constituting connected transactions but exempted from circular and independent shareholders' approval requirements[70] - The Company invested RMB 100.0 million as a limited partner in Chenyao Xinchen Fund, constituting a discloseable transaction but exempted from shareholders' approval requirements[71] Re-election and Appointment of Directors and Supervisors The Company held its AGM on May 23, 2025, re-electing and appointing members of the fourth Board of Directors (including executive, non-executive, and independent non-executive directors) and the Supervisory Committee - Dr. Liang Dongke and Mr. Lin Sen were re-elected as executive directors; Dr. Song Yuan, Mr. Wang Ruiqin, and Ms. Chen Hongqin were re-elected as non-executive directors; Mr. Zhang Hong was appointed as a non-executive director; Mr. Jian Xigao, Mr. Xu Hongqun, and Mr. Xu Congli were re-elected as independent non-executive directors[72] - Ms. Chen Jie was re-elected as employee representative supervisor, and Ms. Ma Huifang and Mr. Shen Xiaoru were re-elected as shareholder representative supervisors[73] Acquisition of Controlling Interest in Target Company The Company completed the acquisition of a 51.70% equity interest in Hangzhou Weiqiang Medical Technology Co Ltd on May 21, 2025, making it a non-wholly owned subsidiary, and subsequently made further capital contributions, now holding approximately 53.84% - The Company completed the acquisition of a 51.70% equity interest in Hangzhou Weiqiang Medical Technology Co Ltd on May 21, 2025, for a consideration of approximately RMB 324.04 million[74] - Following the acquisition, Hangzhou Weiqiang became a non-wholly owned subsidiary of the Company, with the Company entitled to appoint three of its five board directors; further capital contributions increased the Company's equity interest to approximately 53.84% as of the announcement date[74][75] Outlook For H2 2025, the Group plans to combine M&A with organic growth for synergistic development, expand product pipelines, increase R&D investment, accelerate core product development and new product approvals, broaden market reach, enhance market share and brand value, and further leverage automation and scaled production potential - Combine external M&A with organic growth to promote synergistic development across the Group's businesses and achieve high-quality sustainable growth[76] - Continue to expand product pipelines, increase R&D investment, and accelerate the development of core products and approval of new products[76] - Comprehensively expand market footprint, increase product market share, and strengthen brand building[76] - Leverage R&D centers to deeply explore the potential for automation and scaled production, laying a solid foundation for efficient production[76] Financial Review This section provides a detailed review of the Group's financial performance during the reporting period, including changes in revenue, cost of sales, gross profit and margin, other income, finance costs, distribution costs, administrative expenses, R&D expenses, income tax expense, and profit for the period, along with their main reasons Revenue Revenue for the reporting period was approximately RMB 461.08 million, a 17.52% year-on-year increase, primarily due to a 13.57% increase in interventional medical device sales and a 118.69% increase in agency business sales - The Group's revenue for the reporting period was approximately RMB 461.08 million, an increase of 17.52% compared to the same period last year[77] - Interventional medical device revenue increased by 13.57% to RMB 392.37 million, and agency business revenue increased by 118.69% to RMB 32.41 million[77] Cost of Sales Cost of sales for the reporting period was approximately RMB 190.41 million, a 30.82% year-on-year increase, primarily related to revenue growth - Cost of sales was approximately RMB 190.41 million, an increase of 30.82% or approximately RMB 44.86 million compared to the same period last year[78] Gross Profit and Gross Margin Gross profit for the reporting period was approximately RMB 270.66 million, a 9.68% year-on-year increase, but gross margin decreased from 62.90% to 58.70% due to increased sales of lower-margin agency business - Gross profit was approximately RMB 270.66 million, an increase compared to RMB 246.77 million in the same period last year[79] - Gross margin decreased from 62.90% to 58.70%, mainly due to increased sales of lower-margin agency business[79] Other Income Other income for the reporting period was approximately RMB 30.47 million, a 27.28% year-on-year increase, primarily driven by increased government grants - Other income was approximately RMB 30.47 million, an increase of 27.28% or approximately RMB 6.53 million compared to the same period last year[80] - The increase was primarily due to increased government grants[80] Finance Costs Finance costs for the reporting period were approximately RMB 2.92 million, a significant increase from RMB 1.03 million in the prior period, mainly due to interest from bank loans and lease liabilities - Finance costs were approximately RMB 2.92 million, a significant increase compared to RMB 1.03 million in the same period last year[81] - Finance costs primarily consisted of interest generated from bank loans and lease liabilities[81] Distribution Costs Distribution costs for the reporting period were approximately RMB 41.53 million, a 23.56% year-on-year increase, with its proportion to total revenue rising from 8.57% to 9.01% - Distribution costs were approximately RMB 41.53 million, an increase of 23.56% or approximately RMB 7.92 million compared to the same period last year[82] - Distribution costs as a percentage of total revenue increased from 8.57% in the same period last year to 9.01%[82] Administrative Expenses Administrative expenses for the reporting period were approximately RMB 64.92 million, a 17.57% year-on-year increase, mainly due to depreciation, amortization, and additional taxes for the Shandong Yingtai Innovation Medical Device Industrial Park - Administrative expenses were approximately RMB 64.92 million, an increase of 17.57% or approximately RMB 9.70 million compared to the same period last year[83] - The increase was due to depreciation, amortization, and additional taxes for the Shandong Yingtai Innovation Medical Device Industrial Park[83] Research and Development Expenses Total R&D expenses for the reporting period were approximately RMB 91.67 million, with expensed R&D expenses of approximately RMB 70.24 million and capitalized R&D expenses of approximately RMB 21.44 million - Total R&D expenses were approximately RMB 91.67 million, an increase compared to RMB 85.93 million in the same period last year[84] - Expensed R&D expenses were approximately RMB 70.24 million, and capitalized R&D expenses were approximately RMB 21.44 million[84] Income Tax Expense Income tax expense for the reporting period was approximately RMB 18.27 million, a 57.91% year-on-year increase, with the effective income tax rate rising from 10.45% to 15.14% due to increased income tax from a related subsidiary - Income tax expense was approximately RMB 18.27 million, an increase of 57.91% or approximately RMB 6.70 million compared to the same period last year[85] - The effective income tax rate increased from 10.45% to 15.14%, primarily due to increased income tax (at a 25% rate) from a related subsidiary[85] Profit for the Period The Group's profit for the reporting period was approximately RMB 102.44 million, a 3.29% year-on-year increase - The Group's profit for the reporting period was approximately RMB 102.44 million, an increase of 3.29% compared to the same period last year[86] Liquidity and Financial Resources This section outlines the Group's liquidity and financial resources, including cash and cash equivalents, net cash flow from operating activities, current assets and liabilities, and current ratio, and analyzes changes in borrowings and gearing ratio Liquidity and Financial Resources The Group maintained a sound financial position with increased net cash flow from operating activities, but the current ratio decreased from 2.05 to 1.25 due to increased bank loans - As of June 30, 2025, cash and cash equivalents were approximately RMB 480.21 million (December 31, 2024: RMB 521.95 million)[87] - Net cash flow from operating activities was approximately RMB 122.66 million, an increase compared to RMB 104.82 million in the same period last year[87] - The current ratio decreased from approximately 2.05 as of December 31, 2024, to approximately 1.25 as of June 30, 2025, mainly due to increased bank loans[87] Borrowings and Gearing Ratio As of June 30, 2025, the Group's bank borrowings were approximately RMB 538.94 million, and the gearing ratio increased from 13.64% at year-end 2024 to 29.08% - As of June 30, 2025, the Group's loans borrowed from banks were approximately RMB 538.94 million[88] - The gearing ratio (loans and borrowings plus lease liabilities divided by total equity) was 29.08%, a significant increase from 13.64% as of December 31, 2024[88] Capital Structure As of June 30, 2025, total equity attributable to equity holders of the Company was approximately RMB 1,875.90 million, an increase from year-end 2024 - As of June 30, 2025, total equity attributable to equity holders of the Company was approximately RMB 1,875.90 million, compared to approximately RMB 1,774.23 million as of December 31, 2024[89] Interim Dividend The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[90] Use of Proceeds from Global Offering This section details the allocation and use of proceeds from the Company's global offering; as of June 30, 2025, most funds were utilized, with remaining unutilized funds primarily for the Shandong Yingtai Innovation Medical Device Industrial Park construction - Net proceeds from the global offering were approximately RMB 797.62 million, of which approximately RMB 786.46 million had been utilized as of June 30, 2025[91] Use of Proceeds from Global Offering (RMB millions) | Purpose | Revised Allocation | Utilized as of June 30, 2025 | Unutilized as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Construction of Shanghai Jiading R&D Center and production facilities | 328.38 | 328.38 | – | | Purchase of production equipment and automated production lines | 110.07 | 110.07 | – | | Expansion of distribution network and marketing | 13.00 | 13.00 | – | | General corporate purposes and working capital | 79.84 | 79.84 | – | | Construction of Zhuhai Derui new factory project | 110.00 | 110.00 | – | | Construction of Shandong Yingtai Innovation Medical Device Industrial Park | 156.33 | 145.17 | 11.16 | | Total | 797.62 | 786.46 | 11.16 | - Unutilized net proceeds of approximately RMB 11.16 million are primarily for the remaining payment of the Shandong Yingtai Innovation Medical Device Industrial Park construction project, expected to be paid by end of 2025[93] Employees' Remuneration and Relationships As of June 30, 2025, the Group had 2,007 employees, with total employee costs of approximately RMB 167.82 million, offering competitive compensation, share schemes, and training to attract and retain talent - As of June 30, 2025, the Group had 2,007 employees, an increase from 1,735 as of December 31, 2024[94] - Total employee costs for the reporting period were approximately RMB 167.82 million, an increase compared to RMB 147.92 million in the same period last year[94] - The Group has adopted three share schemes (Share Incentive Scheme, 2023 Equity Incentive Scheme, and H Share Award and Trust Scheme) to incentivize and retain employees[94] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, the trustee of the H Share Award and Trust Scheme did not repurchase H shares, the Company held no treasury shares, and no other listed securities were purchased, sold, or redeemed - During the reporting period, the trustee of the H Share Award and Trust Scheme did not repurchase any H shares[95] - As of June 30, 2025, the Company did not hold any treasury shares[96] Investments or Capital Assets This section discloses the Group's significant minority equity investments as of June 30, 2025, primarily in funds focused on medical devices, pharmaceuticals, biotechnology, and other life sciences and healthcare industries, aimed at promoting strategic development and enhancing competitiveness Significant Minority Equity Investments (RMB thousands) | Fund Name | Equity Percentage (%) | Investment Cost (2025) | Fair Value (2025) | Cumulative Gain (2025) | Investment Cost (2024) | Fair Value (2024) | Cumulative Gain (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ruixin Fund | 15.83 | 50,000 | 57,636 | 7,636 | 50,000 | 54,696 | 4,696 | | Yingtai Fund | 25.00 | 50,000 | 48,245 | 13,634 | 50,000 | 49,047 | 14,436 | | Chengdu Huaige Fund | 12.14 | 25,000 | 30,016 | 5,016 | 25,000 | 29,790 | 4,790 | | Hainan Renzhe Fund | 27.62 | 25,000 | 25,174 | 174 | 17,500 | 18,082 | 582 | | Chenyao Xinchen Fund | 32.26 | 100,000 | 99,511 | (489) | – | – | – | | Total | | 250,000 | 260,582 | 25,971 | 142,500 | 151,615 | 24,504 | - These funds primarily invest in life sciences and healthcare industries such as medical devices, pharmaceuticals, biological preparations, medical services, and biotechnology, aiming to promote the Company's strategic development, enhance competitiveness, and consolidate market position[99][100] Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures This section reiterates the Company's completion of the acquisition of a 51.70% equity interest in Hangzhou Weiqiang Medical Technology Co Ltd in May 2025, and subsequent further capital contributions, making it a non-wholly owned subsidiary - The Company completed the acquisition of a 51.70% equity interest in Hangzhou Weiqiang Medical Technology Co Ltd in May 2025, for a consideration of RMB 324 million[102] - Following the acquisition, the Company held a 51.70% equity interest in Hangzhou Weiqiang and gained control; after subsequent further capital contributions, the shareholding increased to approximately 53.84%[103] Contingent Liabilities As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[104] Financial Instruments As of June 30, 2025, the Group had not entered into any foreign exchange forward contracts, nor did it have any other open hedging contracts or financial derivatives - As of June 30, 2025, the Group had not entered into any foreign exchange forward contracts[105] - As of June 30, 2025, the Group had no other open hedging contracts or financial derivatives[105] Capital Expenditure During the reporting period, the Group's capital expenditure for property, plant and equipment, construction in progress, intangible assets, prepaid lease payments, and deposits for property, plant and equipment totaled approximately RMB 53.84 million - During the reporting period, the Group's capital expenditure for property, plant and equipment, construction in progress, intangible assets, prepaid lease payments, and deposits for property, plant and equipment totaled approximately RMB 53.84 million[106] Foreign Exchange Risk The Group's operations are primarily in China, with assets, liabilities, and transactions denominated in RMB, and overseas assets and transactions mainly in USD; the Board believes there is no significant foreign exchange risk currently and has no formal hedging policy, but will monitor and consider future hedging - The Group's domestic assets, liabilities, and transactions in China are denominated in RMB, while overseas assets and transactions are primarily denominated in USD[107] - The Directors believe the Group currently has no significant foreign exchange risk, thus no formal hedging or policy was implemented during the reporting period[107] Pledged Group Assets As of June 30, 2025, the Group obtained secured bank loans of RMB 206.8 million by pledging the Company's equity interest in Hangzhou Weiqiang - As of June 30, 2025, the Group obtained secured bank loans of RMB 206.8 million by pledging the Company's equity interest in Hangzhou Weiqiang[108] Capital Commitments As of June 30, 2025, the Group's authorized but not contracted capital commitments were approximately RMB 13.06 million, and contracted but not provided for capital commitments were approximately RMB 57.49 million Capital Commitments (RMB millions) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Authorized but not contracted | 13.06 | 202.15 | | Contracted but not provided for | 57.49 | 89.05 | Significant Events After Reporting Period After the reporting period, on August 6, 2025, the Company conditionally entered into a partnership agreement to establish and invest in Ningbo Huaige Guangtai Equity Investment Partnership (Limited Partnership), with a total committed capital of RMB 110.0 million - On August 6, 2025, the Company conditionally entered into a partnership agreement to establish and invest in Ningbo Huaige Guangtai Equity Investment Partnership (Limited Partnership)[110] - The Company will invest in Huaige Guangtai Fund as a limited partner, with a total committed capital of RMB 110.0 million, of which the first contribution is RMB 50.0 million[111] Corporate Governance and Others This section covers the Company's corporate governance practices, including compliance with the Model Code for Securities Transactions by Directors and Supervisors, adherence to the Corporate Governance Code (with an explanation for the combined roles of Chairman and CEO), the composition and responsibilities of the Audit Committee, and information on the independent review and announcement of the interim financial report Compliance with the Model Code for Securities Transactions by Directors and Supervisors The Company adopted the Model Code for securities transactions by directors and supervisors and confirmed all directors and supervisors complied with it during the reporting period - The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the code of conduct for securities transactions by its Directors and Supervisors[113] - All Directors and Supervisors confirmed, upon enquiry, that they have complied with the required standards set out in the Model Code during the reporting period[113] Compliance with the Corporate Governance Code The Company complied with all code provisions of the Corporate Governance Code during the reporting period, except for the combined roles of Chairman and CEO, which the Board believes benefits group management and is balanced by strong independent board composition - The Company complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the reporting period, except for code provision C.2.1[114] - Dr. Liang Dongke serves as both the Chairman of the Board and the General Manager (equivalent to Chief Executive Officer) of the Company; the Board believes this arrangement benefits group management, and the Board's composition (2 executive directors, 4 non-executive directors, 3 independent non-executive directors) ensures strong independence and a balance of power[114] Audit Committee The Company has an Audit Committee of three members, chaired by Mr. Xu Hongqun with professional qualifications, which reviewed the unaudited interim results and discussed risk management, internal controls, and financial reporting - The Audit Committee comprises Mr. Xu Hongqun (Chairman, independent non-executive director), Mr. Xu Congli (independent non-executive director), and Dr. Song Yuan (non-executive director)[115] - The Audit Committee has reviewed the Company's unaudited interim results for the reporting period and confirmed compliance with applicable accounting principles, standards, and requirements, with adequate disclosures[115] Independent Review of Interim Financial Report KPMG, the Company's auditor, reviewed the unaudited interim financial report in accordance with HKSRS 2410 and issued an unmodified review report - The Company's auditor, KPMG, has reviewed the unaudited interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[116] - KPMG has issued an unmodified review report, which will be included in the interim report dispatched to shareholders[116] Publication of Interim Results and Interim Report The interim results announcement has been published on the HKEX and Company websites, and the interim report will be available for shareholders and published on these websites in due course - The interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the **Company's website (www.int-medical.com)**[117](index=117&type=chunk) - The Group's 2025 interim report will be available for shareholders' inspection and published on the aforementioned websites in due course[117] Acknowledgements Dr. Liang Dongke, Chairman of the Board, expressed gratitude to all employees, management, users, and business partners, looking forward to continued support to lead the Group to new milestones - Dr. Liang Dongke, Chairman of the Board, extended sincere gratitude to all employees, management team, users, and business partners[118] - The Group will continue to work closely with shareholders and employees to lead the Group's development to new milestones[118]