康哲药业(00867) - 2025 - 中期财报

Company Information Board of Directors and Governance Structure This section details the company's board members, key officers, and committee compositions, along with essential corporate information like auditors and principal bankers - The Board of Directors includes Mr. Lin Gang and Ms. Chen Yanling as executive directors, Mr. Chen Hongbing (resigned) as a non-executive director, and Mr. Liang Chuangshun, Ms. Luo Ying, and Mr. Feng Zheng as independent non-executive directors[3] - The company has Audit, Remuneration, Nomination, and Environmental, Social and Governance Committees to strengthen corporate governance[3] - The company's auditor is Deloitte Touche Tohmatsu, and principal bankers include China Merchants Bank and The Hongkong and Shanghai Banking Corporation[3] Contact and Listing Information This section provides the company's main contact addresses in China and Hong Kong, share registrar details, and its stock codes and official website for Hong Kong and Singapore listings - The company's headquarters and principal place of business in Hong Kong are located in King's Road, North Point, Hong Kong, with the main contact address in China located in Nanshan District, Shenzhen, Guangdong Province[3][4] - The company's shares are listed on the Hong Kong Stock Exchange (stock code: 867) and the Singapore Exchange (stock code: 8A8)[5] Financial Highlights Interim Financial Performance Overview CMS Pharmaceutical achieved year-on-year growth in revenue and profit for the period in the first half of 2025, with basic earnings per share and interim dividends also increasing, indicating a return to an upward trend in operating performance 2025 H1 Key Financial Data | Indicator | 2025 H1 (RMB millions) | 2024 H1 (RMB millions) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,002.0 | 3,611.1 | 10.8% | | Revenue calculated based on pharmaceutical sales income | 4,669.6 | 4,287.5 | 8.9% | | Gross Profit | 2,891.9 | 2,696.5 | 7.2% | | Gross Profit calculated based on pharmaceutical sales income | 2,881.7 | 2,686.9 | 7.2% | | Profit for the Period | 931.5 | 903.4 | 3.1% | | Basic Earnings Per Share (RMB) | 0.3892 | 0.3734 | 4.2% | | Bank Balances and Cash (as of June 30) | 3,454.1 | N/A | N/A | | Bank Acceptance Bills readily convertible to cash (as of June 30) | 178.6 | N/A | N/A | | Interim Dividend Per Share (RMB) | 0.1555 | 0.1507 | 3.2% | Business Highlights 2025 H1 Business Highlights CMS Pharmaceutical's operating performance continued to rise in the first half of 2025, primarily due to the fading negative impact of national procurement products and strong growth in exclusive/branded and innovative products, with significant progress in innovation, specialized focus, and industrial internationalization - Operating performance returned to an upward trend, with continuous sales growth of key exclusive/branded and innovative products, accounting for 62.1% of total revenue (calculated based on pharmaceutical sales income) (56.1% in the same period last year)[7] - Continuous innovation achievements: 5 approved innovative drugs accelerated commercialization, 3 NDAs under review, 2 self-developed product IND applications approved, 1 consumer healthcare product approved, 2 new co-developed innovative products added, and approximately 20 self-developed projects progressing smoothly[7][8][9][10][11][12] - Focus on specialized fields, especially the dermatology health track, where 'Dermira Pharmaceuticals' has grown into a leading innovative pharmaceutical company in China and is proposed for a separate listing on the Main Board of the Hong Kong Stock Exchange[7] - The industrial internationalization strategy reached a significant milestone with a secondary listing on the SGX in July 2025, positioning Singapore as an international hub to facilitate the development of the entire 'R&D-Production-Sales' ecosystem[7] Management Discussion and Analysis Company Overview CMS Pharmaceutical is an open platform enterprise connecting pharmaceutical innovation with commercialization, managing the entire product lifecycle, and committed to providing competitive products and services to meet unmet medical needs, driven by a "collaborative R&D + independent R&D" dual-engine approach and an active industrial internationalization strategy - The company is positioned as an open platform enterprise connecting pharmaceutical innovation with commercialization and managing the entire product lifecycle[14] - Adopting a "collaborative R&D + independent R&D" dual-engine model, focusing on FIC and BIC innovative products, and has expanded to approximately 40 differentiated innovative pipelines[14] - Focusing on specialized fields such as cardiovascular, digestive, ophthalmology, and dermatology health, with the dermatology health business proposed for separate listing[14] - Actively promoting the "industrial internationalization" strategy, with Singapore as a hub to deeply cultivate emerging markets such as Southeast Asia and the Middle East, and has completed its secondary listing in Singapore[15] Business Review In the first half of 2025, China's pharmaceutical industry developed steadily under policy reforms and innovation, with CMS Pharmaceutical achieving transformation and upgrading through "product innovation, commercial reform, and international expansion" strategies, leading to increased revenue and profit, an expanding innovative product portfolio, and successful advancements in business spin-offs and secondary listings - China's pharmaceutical industry is steadily advancing along a path of high-quality development, driven by deepening policy reforms and innovation, with optimized medical insurance payment reforms, more refined and scientific national procurement, and a harvest period for innovative drugs[16] - Since 2018, CMS Pharmaceutical has outlined a "New CMS" transformation blueprint, driven by three major strategies: "product innovation, commercial reform, and international expansion," upgrading from "China's largest CSO" to a "full-chain innovative pharmaceutical enterprise"[16] 2025 H1 Core Financial Performance | Indicator | 2025 H1 (RMB millions) | 2024 H1 (RMB millions) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,002.0 | 3,611.1 | 10.8% | | Revenue calculated based on pharmaceutical sales income | 4,669.6 | 4,287.5 | 8.9% | | Profit for the Period | 931.5 | 903.4 | 3.1% | - New innovative products ZUNVEYL and MG-K10, consumer healthcare product Lizhenran® approved for market, and commercialization of already listed innovative drugs progressing steadily[18] - Dermatology health business "Dermira Pharmaceuticals" is proposed for a separate listing on the Main Board of the Hong Kong Stock Exchange, and the group successfully completed its secondary listing on the SGX in July 2025, accelerating the "industrial internationalization" strategy[18] I. Innovation Engine Driving High-Quality Growth CMS Pharmaceutical continuously expands its high-value pipeline through a three-dimensional innovation mechanism of "license-in + strategic cooperation + independent R&D," having established approximately 40 differentiated innovative pipeline products, with 5 innovative drugs already approved and commercialized in China, and multiple products under NDA review or clinical development, laying the foundation for the company's medium-to-long-term growth - The company relies on a three-dimensional innovation mechanism of "overseas licensing + domestic cooperation + independent R&D" to continuously inject high-value pipelines, covering the entire lifecycle management system from "target discovery - clinical development - registration and listing - commercialization"[20] - As of the end of the reporting period, approximately 40 differentiated innovative pipeline products have been established, of which 5 innovative drugs (Yilvqu, Weifurui, Meitaitong, Weituke, Laifulan) have been approved and commercialized in China[21] - 2 innovative drugs (Dexidustat Tablets, Ruxolitinib Cream - vitiligo indication) are under China NDA review, approximately 10 projects are about to start/are progressing with registrational RCT clinical trials, and approximately 20 self-developed projects are steadily advancing[21] 1. CMS Pharmaceutical Innovative Products CMS Pharmaceutical has multiple listed and pipeline innovative products in cardiovascular, digestive, and other fields, with listed products demonstrating excellent clinical value and market potential, and pipeline products progressing smoothly in clinical trials, continuously expanding the innovative pipeline - Weifurui (Sucroferric Oxyhydroxide Chewable Tablets): China's first iron-based, non-calcium phosphate binder, effectively reducing phosphorus and improving patient nutritional status, included in National Medical Insurance Class B[22] - Meitaitong (Methotrexate Injection): China's first subcutaneous pre-filled MTX injection for psoriasis and RA, RA indication approved in China, significantly more effective than oral tablets, included in National Medical Insurance Class A[23][24] - Weituke (Diazepam Nasal Spray): China's first diazepam nasal spray for acute treatment of epileptic seizures, proposed for expansion to children aged 2 and above and adults, included in National Medical Insurance Class B[25] - Laifulan (Methylene Blue Enteric-Coated Sustained-Release Tablets): China's first methylene blue enteric-coated sustained-release tablets, significantly improving colonoscopy lesion detection rate, promoting multi-channel access and academic promotion[26] - Dexidustat Tablets: Innovative oral HIF-PHI for anemia treatment in non-dialysis CKD patients, China NDA under CDE review, positive Phase III clinical trial results[27][28] - Y-3 Injection: The world's only non-peptide PSD95/nNOS uncoupler entering clinical research, expected to be the first dual-function neuroprotective drug for ischemic stroke and prevention of post-stroke depression and anxiety, China Phase III completed[29][30] - ABP-671: Urate transporter 1 (URAT1) inhibitor for gout and hyperuricemia, China Phase IIb/III clinical trials progressing, Phase IIa clinical trials showed good efficacy and safety[31][32] - Self-developed pipeline includes CMS-D002 Capsules (GnRH receptor antagonist), CMS-D005 Injection (GLP-1R/GCGR dual agonist), and CMS-D003 Capsules (cardiac myosin inhibitor), all in Phase I clinical or IND approved stages[33][34][35] - Added ZUNVEYL (Benzogallamine Gluconate Enteric-Coated Tablets) and MG-K10 (Anti-IL-4Rα Humanized Monoclonal Antibody Injection) to the innovative pipeline, ZUNVEYL China NDA accepted, MG-K10 asthma indication China Phase III clinical trial and seasonal allergic rhinitis indication China Phase II clinical trial progressing orderly[36][37][38][39][40] 2. Dermira Pharmaceuticals Innovative Products Dermira Pharmaceuticals, as an innovative pharmaceutical company in the dermatology health field, has launched Yilvqu and has multiple innovative drugs under NDA review or clinical development, such as Ruxolitinib Cream, Povorcitinib, and self-developed CMS-D001 Tablets, while MG-K10 in collaboration with Maiji Bio is progressing smoothly in clinical trials, continuously expanding the dermatology health innovative pipeline - Yilvqu (Tiragolumab Injection): Specific anti-IL-23 p19 subunit monoclonal antibody, only 4 doses per year for psoriasis maintenance, excellent efficacy and good safety, recommended by multiple domestic and international guidelines[41][42] - Ruxolitinib Cream: The first and only topical JAK inhibitor for non-segmental vitiligo repigmentation approved by US FDA and European EMA, China NDA under CDE review, and pilot programs in Hainan Boao Lecheng and Greater Bay Area[43][44][45] - Ruxolitinib Cream for atopic dermatitis (AD) China Phase III bridging trial is progressing, overseas studies show good efficacy and safety[46] - Povorcitinib: Selective small molecule oral JAK1 inhibitor, non-segmental vitiligo and hidradenitis suppurativa (HS) indications China IND applications accepted, overseas Phase III clinical trials progressing smoothly[47][48] - Self-developed CMS-D001 Tablets (highly selective TYK2 inhibitor) AD indication China IND application approved, psoriasis Phase I clinical research progressing[49] - MG-K10 (atopic dermatitis, prurigo nodularis, etc. indications): The world's only long-acting anti-IL-4Rα monoclonal antibody entering pivotal clinical stage, adult AD China Phase III clinical trial completed 16-week treatment, prurigo nodularis indication China Phase III clinical trial enrollment progressing steadily[50][51] 3. Innovative Pipeline List This section provides a detailed list of innovative pipelines for CMS Pharmaceutical and its Dermira Pharmaceuticals, including listed/under review products and products in development, covering multiple indication areas, with rights regions and clinical development stages marked - Innovative pipeline covers products already listed or under review for listing, such as Diazepam Nasal Spray, Tiragolumab Injection, Methotrexate Injection, Methylene Blue Enteric-Coated Sustained-Release Tablets, Ruxolitinib Cream, Dexidustat Tablets, ZUNVEYL, etc[52] - Products in development include SDN-037, PDP-716, CF101, Povorcitinib, CF102, XF-73, Y-3 Injection, ABP-671, Anti-IL-4Rα Humanized Monoclonal Antibody Injection (MG-K10), Anti-VEGFA+ANG2 Tetravalent Bispecific Antibody, TYK2 Inhibitor (CMS-D001), GnRH Receptor Antagonist (CMS-D002), GLP-1R/GCGR Dual Agonist (CMS-D005), Cardiac Myosin Inhibitor (CMS-D003), and approximately 15 self-researched innovative drugs[54] - Product rights regions include China, overseas, global, designated Asian regions, and mainland China, Hong Kong, Macau, Taiwan, etc., with some products already approved for listing in Macau and Hong Kong[52][53][54][55] II. Commercialization System CMS Pharmaceutical adheres to product academic and medical differentiation advantages to meet unmet treatment needs, driving the commercialization of innovative drugs and key exclusive/branded drugs through post-marketing clinical studies and academic platform building with medical evidence, having built an "in-hospital + out-of-hospital" full-channel and "online + offline" omni-channel marketing system, and actively deploying consumer healthcare products, with a promotion network covering over 50,000 hospitals and medical institutions and approximately 300,000 retail pharmacies in China - The company releases the commercial value of innovative drugs and key exclusive/branded drugs through post-marketing clinical studies (including RWS) and academic platform building, driven by medical evidence[56] - Building an "in-hospital + out-of-hospital" full-channel development model, an "online + offline" omni-channel marketing system, and a diversified "consumer healthcare" product portfolio strategy[56] - Promotion network covers over 50,000 hospitals and medical institutions and approximately 300,000 terminal retail pharmacies in China[57] 1. List of Products on Sale CMS Pharmaceutical's main products on sale cover cardiovascular, digestive, dermatology health, ophthalmology, and other fields, all possessing unique product advantages and market positions - Cardiovascular-related disease line products include Weifurui (innovative drug), Weituke (innovative drug), Xin Huosu, Bo Yiding, Dailixin, covering indications such as chronic kidney disease, epilepsy, acute decompensated heart failure, hypertension and stable angina pectoris, mild to moderate depression and anxiety[58] - Digestive/autoimmune-related disease line products include Meitaitong (innovative drug), Laifulan (innovative drug), Yousifu, Shaerfu, Yihuo, Kangbishen, Xidini, covering indications such as psoriasis, rheumatoid arthritis, colorectal lesion visualization, gallbladder cholesterol stones, ulcerative colitis, diarrhea and intestinal flora imbalance, indigestion, functional dyspepsia[59] - Dermatology-related products include Yilvqu (innovative drug), Xiliaotuo, Anshuxi, covering indications such as plaque psoriasis, blunt trauma, superficial phlebitis, varicose veins[60] - Dermatological skincare products include Xiliaotuo® Azelaic Acid product series and Heling Soothing product series, used for acne care and moisturizing and soothing sensitive skin[60] - Ophthalmology disease line products include Stulon Eye Drops, EyeOP1 Glaucoma Treatment Instrument, used for visual fatigue, fundus macular degeneration, glaucoma[60] - Other major products include Yigaining (pain caused by osteoporosis) and Vmonalisa (injectable modified sodium hyaluronate gel)[60] III. Dermatology Health Business (Proposed Spin-off for Separate Listing on the Stock Exchange) Dermira Pharmaceuticals, as a leading innovative pharmaceutical enterprise in China's dermatology health sector, has achieved dual leadership in the breadth of dermatology disease indications covered and the scale of dermatology prescription drug revenue, with the company proposing a separate listing on the Main Board of the Stock Exchange via introduction and in-specie distribution to unleash its high-growth potential and independent value, possessing a comprehensive and differentiated product portfolio, a diverse and efficient R&D engine, and industry-leading commercialization capabilities - Dermira Pharmaceuticals has grown into a leading innovative pharmaceutical enterprise in China's dermatology health sector, achieving dual leadership in "breadth of dermatology disease indications covered" and "scale of dermatology prescription drug revenue"[61] - The company proposes to spin off Dermira Pharmaceuticals for a separate listing on the Main Board of the Stock Exchange via introduction and in-specie distribution, to fully unleash its high-growth potential and independent value[61] 2025 H1 Revenue Contribution by Product Line | Product Line | Revenue (RMB millions) | YoY Growth (%) | % of Total Revenue | | :--- | :--- | :--- | :--- | | Cardiovascular-related Disease Line | 2,215.8 | 0.6% | 47.5% | | Digestive/Autoimmune-related Disease Line | 1,411.1 | 4.9% | 30.2% | | Dermatology Health Line (Dermira Pharmaceuticals) | 498.0 | 104.3% | 10.7% | | Ophthalmology Disease Line | 358.1 | 17.7% | 7.7% | | Other Products | 186.6 | -2.3% | 3.9% | 1. Comprehensive and Differentiated Product Portfolio, Deeply Cultivating Dermatology Disease Field Dermira Pharmaceuticals focuses on major dermatological diseases, deploying dermatology prescription drugs with different mechanisms of action and treatment methods, and extending to dermatological skincare products, providing comprehensive solutions from treatment to care, with a product portfolio covering major dermatological diseases - Dermira Pharmaceuticals' product portfolio extends from the "treatment" field to the "care" field of dermatology health, creating a product cluster of dermatology prescription drugs and dermatological skincare products[62] - Three listed products (Yilvqu, Xiliaotuo, Anshuxi), four clinical-stage pipeline products (Ruxolitinib Cream, MG-K10, Povorcitinib, CMS-D001), and multiple preclinical candidate products have been established[64] - In the dermatological skincare product field, Heling Soothing series products and Xiliaotuo® Azelaic Acid acne treatment product series have been launched[64] - The product pipeline covers major dermatological disease treatment areas such as psoriasis, atopic dermatitis, vitiligo, superficial phlebitis, varicose veins, prurigo nodularis, hidradenitis suppurativa, chronic spontaneous urticaria, and acne vulgaris[65] 2. Diverse and Efficient R&D Engine, Accelerating Innovation Process Dermira Pharmaceuticals adopts a dual-pronged R&D model of collaborative R&D and independent R&D to efficiently discover FIC and BIC products, advancing clinical development of MG-K10 for dermatological indications and independently developing the highly selective TYK2 inhibitor CMS-D001 Tablets, demonstrating strong clinical development and registration capabilities - Dermira Pharmaceuticals adopts a dual-pronged R&D model of collaborative R&D and independent R&D to efficiently discover FIC and BIC products[66] - Collaborating with Maiji Bio to advance the clinical development of the long-acting anti-IL-4Rα monoclonal antibody MG-K10 for dermatological indications in China, with the atopic dermatitis indication China Phase III clinical trial having completed 16 weeks of treatment[66] - Self-developed innovative drug, the highly selective TYK2 inhibitor CMS-D001 Tablets, is undergoing Phase I clinical trials in China and received new IND approval for atopic dermatitis in July 2025[67] 3. Industry-Leading Commercialization Capabilities, Building a Foundation for Scaled Sales Dermira Pharmaceuticals possesses an industry-leading dermatology specialist sales and academic promotion team, with a sales network covering mainstream in-hospital and out-of-hospital channels, leading the industry in both hospital dermatology department coverage and commercialization team size in China, continuously enhancing brand influence, market penetration, and multi-dimensional growth momentum through medical-driven promotion, post-marketing studies, RWS, new retail, and new media operations - Dermira Pharmaceuticals has an industry-leading dermatology specialist sales and academic promotion team, with a sales network covering mainstream in-hospital and out-of-hospital channels[68] - Through academic promotion, post-marketing studies, and RWS, accumulating evidence-based medicine to promote product inclusion in clinical guidelines and expert consensuses, Yilvqu, Xiliaotuo, and Ruxolitinib Cream have been recommended by multiple authoritative international guidelines[68] - Actively exploring innovation in the "new retail" model for pharmaceuticals, strengthening coverage of offline pharmacies and e-commerce channels, improving "new media" operational capabilities, and opening up multi-dimensional growth drivers[68] IV. Ophthalmology Business CMS Weisheng, as an independently operated specialized business company of the Group, focuses on the development and commercialization of ophthalmic drugs and medical devices, while also expanding into the ENT field, aiming to build a "leading ophthalmic pharmaceutical enterprise in China," continuously enriching patient treatment options through diversified solutions combining drugs and devices, and actively introducing innovative pipelines and collaborations - CMS Weisheng focuses on the development and commercialization of ophthalmic drugs and medical devices, while actively expanding into the ENT field, aiming to build a "leading ophthalmic pharmaceutical enterprise in China"[69] - Through diversified solutions combining drugs and devices, covering ophthalmic diseases such as visual fatigue, glaucoma, fundus neovascular diseases, and rhinitis indications[69] - Introduced Class 1 new drug Anti-IL-4Rα Humanized Monoclonal Antibody Injection MG-K10 (seasonal allergic rhinitis indication), and established ophthalmic collaboration with Jingze Bio, an innovation-driven biopharmaceutical company[69][70] 1. Main Products on Sale CMS Weisheng offers two core products: the exclusive drug Stulon Eye Drops, a representative professional anti-visual fatigue drug and a choice for treating fundus macular degeneration, whose active ingredient has been included in multiple authoritative guidelines; and the innovative medical device EyeOP1 Glaucoma Treatment Instrument, which applies high-intensity focused ultrasound technology to provide a scalpel-free, minimally invasive, and precisely focused glaucoma treatment solution - Exclusive drug Stulon Eye Drops: A representative professional anti-visual fatigue drug, a safe and convenient choice for treating fundus macular degeneration, with its active ingredient, Aescin, included in multiple authoritative guidelines[71] - Innovative medical device EyeOP1 Glaucoma Treatment Instrument: Applies high-intensity focused ultrasound technology, featuring scalpel-free, minimally invasive, precise focusing, and convenient operation, providing a safe and effective innovative treatment solution for glaucoma patients[71] 2. Main Products in Development CMS Weisheng has added the pipeline product Anti-IL-4Rα Humanized Monoclonal Antibody Injection MG-K10, which will be developed for the treatment of seasonal allergic rhinitis, and is expected to be the first long-acting anti-IL-4Rα monoclonal antibody launched in China, with its seasonal allergic rhinitis indication China Phase II clinical trial progressing orderly - Added pipeline product Anti-IL-4Rα Humanized Monoclonal Antibody Injection MG-K10, which will be developed for the treatment of seasonal allergic rhinitis[72] - MG-K10 can simultaneously block IL-4 and IL-13 signal transduction, with Fc mutation effectively extending its half-life, expected to be the first long-acting (once every four weeks injection) anti-IL-4Rα monoclonal antibody launched in China[72] - The product's seasonal allergic rhinitis indication China Phase II clinical trial is progressing orderly[72] V. International Business CMS Pharmaceutical successfully completed its secondary listing on the SGX in July 2025, marking a new stage in its "industrial internationalization" strategy, positioning Singapore as its business hub for emerging markets in Asia Pacific, building a business company covering the entire "R&D, production, sales" ecosystem, aiming to capture growth dividends in emerging markets and achieve a multi-regional growth pattern, with Rxilient as a commercialization platform actively introducing products and promoting registration and listing, while PharmaGend as a production platform possesses high-standard pharmaceutical manufacturing capabilities - The Group successfully completed its secondary listing on the SGX on July 15, 2025, which will enhance global visibility and market position, build an Asia-Pacific synergistic platform, and close the loop of the "R&D-Production-Sales" "industrial internationalization" development value chain[73] - Pharmaceutical demand in emerging markets such as Southeast Asia and the Middle East is accelerating, and CMS Pharmaceutical is extending its differentiated product resources and commercialization capabilities from the Chinese market to these markets[74] - Since launching the "industrial internationalization" strategy in 2022, with Singapore as a hub, the company has established an R&D system "CMS R&D," a production system "PharmaGend," and a commercialization system "Rxilient"[74] 1. Internationalization of Commercialization System Rxilient, as CMS Pharmaceutical's international commercialization platform, is headquartered in Singapore for emerging markets and has established subsidiaries or offices in multiple Asian countries, having obtained exclusive rights for the improved new drug ZUNVEYL in Asia, submitted registration applications for Tiragolumab Injection in Taiwan, successfully included Sucroferric Oxyhydroxide Chewable Tablets in the Hong Kong Hospital Authority Drug Formulary, and approved Ruxolitinib Cream for listing in Macau and Hong Kong - Rxilient is a platform for drug introduction, development, marketing, and promotion, headquartered in Singapore for emerging markets, and has established subsidiaries or offices in Hong Kong, Taiwan, Malaysia, Vietnam, Philippines, Indonesia, Thailand, and UAE[75] - Newly obtained exclusive rights for the improved new drug ZUNVEYL in Asia (excluding mainland China, Japan, and the Middle East) and submitted registration applications for Tiragolumab Injection in Taiwan[75] - Sucroferric Oxyhydroxide Chewable Tablets were successfully included in the "Special Drugs" category of the Hong Kong Hospital Authority Drug Formulary[75] - As of the end of the reporting period, Rxilient has submitted nearly 20 drug and medical device listing applications in Southeast Asia, the Middle East, Hong Kong, Macau, and Taiwan, with Ruxolitinib Cream already approved for listing in Macau and Hong Kong[76] 2. Internationalization of Production System PharmaGend, an associate company of the Group, is an international one-stop pharmaceutical CDMO platform based in Singapore, with the Group holding a 45.0% equity interest, possessing a 30,000 square meter production facility with an annual capacity of 1 billion oral solid dosage units, having obtained Singapore HSA drug manufacturing license, US FDA cGMP certification, and passed Swiss QP audit, demonstrating high-standard pharmaceutical manufacturing capabilities for global output, while capacity expansion is progressing smoothly - PharmaGend is an associate company of the Group, an international one-stop pharmaceutical CDMO platform based in Singapore, with the Group holding a 45.0% equity interest[77] - Possesses a 30,000 square meter production facility with an annual capacity of 1 billion oral solid dosage units, has obtained Singapore HSA drug manufacturing license, US FDA cGMP certification, and passed Swiss QP audit[77] - Possesses high-standard pharmaceutical manufacturing capabilities for global output, with capacity expansion (including new production lines for nasal sprays, creams, and injections, and a packaging center) progressing smoothly[77] Future Development CMS Pharmaceutical will adhere to its "New CMS, New Rise" development strategy, focusing on "product innovation, commercial reform, and international expansion" three core strategies, continuously expanding its product pipeline with a three-dimensional innovation system, deeply cultivating advantageous specialized fields and empowering independent development, while proactively observing changes in payment and consumer behavior to accelerate the layout of the consumer healthcare market, and driving innovation with a China-Singapore dual-hub to achieve global allocation of industrial resources and build a replicable, scalable, and sustainable closed-loop development for an international pharmaceutical enterprise - Adhere to the "New CMS, New Rise" development strategy, focusing on "product innovation, commercial reform, and international expansion" three core strategies[78] - Expand product pipeline with a "license-in + strategic cooperation + independent R&D" three-dimensional innovation system, focusing on unmet clinical needs to create a more competitive and accessible product portfolio[78] - Adhere to a specialized focus strategy, deeply cultivating advantageous specialized fields such as cardiovascular, central nervous system, digestive, dermatology health, and ophthalmology, and empowering independent development of specialized businesses like dermatology health and ophthalmology[78] - Accelerate the layout of the consumer healthcare market, expanding diversified models such as new retail and new media, building an omni-channel commercial ecosystem integrating in-hospital and out-of-hospital, and online and offline interactions[78] - In terms of international expansion, drive innovation with a China-Singapore dual-hub, achieve global allocation of industrial resources, and build a replicable, scalable, and sustainable closed-loop development for an international pharmaceutical enterprise[78] Financial Review This section provides a detailed review of CMS Pharmaceutical's financial performance in the first half of 2025, with both revenue and profit for the period increasing, but gross profit margin slightly declining due to lower prices of national procurement products, while sales expenses decreased as a percentage of revenue, administrative and R&D expenses increased, and finance costs and income tax expenses decreased, with liquidity remaining strong and the debt-to-asset ratio remaining low 2025 H1 Revenue Performance | Indicator | 2025 H1 (RMB millions) | 2024 H1 (RMB millions) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,002.0 | 3,611.1 | 10.8% | | Revenue calculated based on pharmaceutical sales income | 4,669.6 | 4,287.5 | 8.9% | 2025 H1 Gross Profit and Gross Margin Performance | Indicator | 2025 H1 (RMB millions) | 2024 H1 (RMB millions) | YoY Growth (%) | Gross Margin (2025) | Gross Margin (2024) | Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 2,891.9 | 2,696.5 | 7.2% | 72.3% | 74.7% | -2.4 | | Gross Profit calculated based on pharmaceutical sales income | 2,881.7 | 2,686.9 | 7.2% | 61.7% | 62.7% | -1.0 | 2025 H1 Expense Performance | Indicator | 2025 H1 (RMB millions) | 2024 H1 (RMB millions) | YoY Growth (%) | % of Revenue (2025) | % of Revenue (2024) | Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 1,424.5 | 1,400.5 | 1.7% | 35.6% | 38.8% | -3.2 | | Administrative Expenses | 430.8 | 361.5 | 19.2% | 10.8% | 10.0% | +0.8 | | Total R&D Expenditure | 571.4 | 622.2 | -8.2% | 14.3% | 17.2% | -2.9 | | R&D Expenses | 202.5 | 105.6 | 91.8% | 5.1% | 2.9% | +2.2 | | Expenditure on Equity Investments in R&D Companies | 143.76 | 60.033 | 139.4% | N/A | N/A | N/A | | Expenditure on Acquisition and Development of Product Rights | 225.113 | 456.605 | -50.7% | N/A | N/A | N/A | | Other Income | 79.2 | 144.5 | -45.2% | N/A | N/A | N/A | | Other Gains and Losses | 76.7 | -24.7 | 410.4% | N/A | N/A | N/A | | Share of Profits of Associates/Joint Ventures | 165.4 | 209.3 | -21.0% | N/A | N/A | N/A | | Finance Costs | 11.3 | 21.6 | -47.9% | N/A | N/A | N/A | | Income Tax Expense | 212.6 | 232.9 | -8.8% | N/A | N/A | N/A | | Profit for the Period | 931.5 | 903.4 | 3.1% | N/A | N/A | N/A | 2025 H1 Asset Turnover | Indicator | June 30, 2025 (RMB millions) | Dec 31, 2024 (RMB millions) | Change (%) | Turnover Days (2025) | Turnover Days (2024) | Change (Days) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inventories | 792.0 | 768.1 | 3.1% | 129 | 128 | +1 | | Trade Receivables | 1,442.1 | 1,222.5 | 18.0% | 79 | 80 | -1 | | Trade Payables | 137.3 | 142.4 | -3.6% | 23 | 32 | -9 | - As of June 30, 2025, bank balances and cash amounted to RMB 3,454.1 million, and bank borrowings were RMB 715.0 million, with a weighted average annual interest rate of approximately 2.3% (3.3% in the same period last year)[96] - The debt-to-asset ratio was approximately 3.8% (December 31, 2024: 4.6%), indicating good liquidity[96] - The Group is primarily exposed to currency risks in USD, EUR, and HKD, and closely monitors exchange rate and interest rate movements[97][98] - As of June 30, 2025, the Group had no pledged assets or significant contingent liabilities, nor any acquisitions or disposals of significant subsidiaries, associates, or joint ventures[99][100][101] Other Information Equity and Dividend Policy The company has a share award scheme but no share option scheme, with the Board resolving to declare an interim dividend of RMB 0.1555 per share and announcing the record date and suspension of share registration for dividend distribution, additionally disclosing the share interests of directors, chief executive, and substantial shareholders in the company and its associated corporations - The CMS Share Award Scheme was approved on January 17, 2024, but there was no share option scheme as of the end of the reporting period[102][103] - The Board resolved to declare an interim dividend of RMB 0.1555 per share for the six months ended June 30, 2025 (a year-on-year increase of 3.2%)[6][104] - To determine eligibility for the interim dividend, share registration in Hong Kong and Singapore will be suspended on September 2, 2025[105][106] Directors' and Chief Executive's Shareholdings (as of June 30, 2025) | Director Name | Nature of Interest | Class and Total Number of Shares/Related Shares (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Lin Gang | Controlled Corporation Interest | 1,167,564,000 | 47.86% | | Mr. Chen Hongbing | Beneficial Owner | 17,038,225 | 0.70% | | Mr. Chen Hongbing | Controlled Corporation Interest | 50,225,000 | 2.06% | | Ms. Chen Yanling | Beneficial Owner | 7,246,250 | 0.30% | - As of the end of the reporting period, no director or their spouse/minor children were granted rights to acquire benefits by purchasing shares or debentures of the company[110] - As of June 30, 2025, save as disclosed, no other substantial shareholders held interests or short positions required to be disclosed[111] - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[113] Human Resources and Corporate Governance As of June 30, 2025, the Group had approximately 6,095 employees, offering competitive compensation packages and continuous training, with the company's Audit Committee having reviewed and recommended the interim results announcement, and the company complying with the Corporate Governance Code, with all directors participating in continuous professional development and complying with securities dealing guidelines - As of June 30, 2025, the Group had approximately 6,095 employees, offering competitive compensation packages (including equity incentives) and continuous education and training[114] - The Audit Committee, composed of three independent non-executive directors, reviewed and recommended this interim results announcement and interim report[115] - Changes in directors' information: Ms. Luo Ying resigned from her position as Investment Director of GL China Equity HK Management Limited, and Mr. Chen Hongbing resigned from his position as non-executive director[116][117] - The company complies with the Corporate Governance Code, except that the roles of Chairman and Chief Executive Officer are held by Mr. Lin Gang, with clearly defined responsibilities[118] - The company has adopted the "Written Guidelines for Securities Transactions by Directors and Relevant Employees," and all directors complied during the reporting period[119] - This interim report will be sent to shareholders and published on the HKEX, SGX, and the company's website[120] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents CMS Pharmaceutical's condensed consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, including revenue, gross profit, various expenses, share of profits of associates/joint ventures, profit before tax, income tax expense, and profit for the period, as well as other comprehensive income items - Revenue was RMB 4,001,980 thousand, and profit for the period was RMB 931,493 thousand[122] - Profit for the period attributable to owners of the company was RMB 941,178 thousand, and basic earnings per share was RMB 0.3892[122] Condensed Consolidated Statement of Financial Position This statement presents CMS Pharmaceutical's condensed consolidated financial position as of June 30, 2025, including non-current assets, current assets, current liabilities, net current assets, total assets less current liabilities, share capital and reserves, non-controlling interests, and non-current liabilities - As of June 30, 2025, total non-current assets were RMB 9,647,634 thousand, and total current assets were RMB 9,289,450 thousand[123] - Equity attributable to owners of the company was RMB 17,018,951 thousand, and total assets less current liabilities was RMB 17,328,848 thousand[123][124] Condensed Consolidated Statement of Changes in Equity This statement presents CMS Pharmaceutical's condensed consolidated changes in equity for the six months ended June 30, 2025, including opening balances, profit/loss for the period, other comprehensive income/expense, share-based payments, capital contributions from non-controlling interests, dividends paid, proposed dividends, and transfers to reserves for share capital, share premium, capital reserve, general reserve, exchange reserve, revaluation reserve, retained earnings, dividend reserve, treasury shares, and non-controlling interests - As of June 30, 2025, equity attributable to owners of the company was RMB 17,018,951 thousand, and non-controlling interests were RMB 146,766 thousand[125] - Total comprehensive income for the period was RMB 954,654 thousand, and dividends paid were RMB 284,167 thousand[125] Condensed Consolidated Statement of Cash Flows This statement presents CMS Pharmaceutical's condensed consolidated cash flows for the six months ended June 30, 2025, including net cash from operating, investing, and financing activities, as well as opening and closing balances of cash and cash equivalents - Net cash generated from operating activities was RMB 556,838 thousand (2024 same period: RMB 872,866 thousand)[127] - Net cash used in investing activities was RMB 457,637 thousand (2024 same period: RMB 633,719 thousand)[127] - Net cash used in financing activities was RMB 355,953 thousand (2024 same period: RMB 633,922 thousand)[127] - Cash and cash equivalents at the end of the period (i.e., bank balances and cash) amounted to RMB 3,454,072 thousand[127] Notes to the Condensed Consolidated Financial Statements 1. Basis of Preparation These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the relevant disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the HKEX Listing Rules[128] 2. Principal Accounting Policies These condensed consolidated financial statements are primarily prepared on a historical cost basis, except for certain financial instruments measured at fair value, with the amendments to International Financial Reporting Standards adopted for the first time in this reporting period having no significant impact on the amounts presented or their disclosures - These condensed consolidated financial statements are primarily prepared on a historical cost basis, with some financial instruments measured at fair value[129] - The amendments to International Financial Reporting Standards adopted for the first time had no significant impact on these condensed consolidated financial statements[129] 3. Revenue and Segment Information The Group's revenue primarily derives from the sale of pharmaceutical products to distributors and the provision of promotion services, with customers mainly located in mainland China, and during the reporting period, the Group reorganized its internal reporting structure, changing its reportable operating segments from a single segment to two segments: Integrated Pharmaceutical Portfolio ("Integrated Line") and Dermatology-related Business ("Dermatology Health Line"), and restated prior period segment disclosures - Revenue primarily includes the sale of pharmaceutical products to distributors and the provision of promotion services to certain pharmaceutical manufacturers[130][131] 2025 H1 Revenue Analysis | Revenue Source | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Sales of pharmaceutical products | 3,088,802 | 2,685,638 | | Promotion income | 913,178 | 925,431 | | Total Revenue | 4,001,980 | 3,611,069 | - The Group reorganized its internal reporting structure, changing its reportable operating segments to (i) Integrated Pharmaceutical Portfolio ("Integrated Line") and (ii) Dermatology-related Business ("Dermatology Health Line")[134] 2025 H1 Segment Revenue and Results Analysis | Indicator | Integrated Line (RMB thousands) | Dermatology Health Line (RMB thousands) | Eliminations (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | External Revenue | 3,528,576 | 473,404 | - | 4,001,980 | | Inter-segment Revenue | 18,953 | 24,624 | (43,577) | - | | Revenue | 3,547,529 | 498,028 | (43,577) | 4,001,980 | | Gross Profit | 2,621,852 | 307,728 | (37,668) | 2,891,912 | | Profit (Loss) for the Period | 982,033 | (31,080) | (19,460) | 931,493 | June 30, 2025 Segment Assets and Liabilities Analysis | Indicator | Integrated Line (RMB thousands) | Dermatology Health Line (RMB thousands) | Eliminations (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Segment Assets | 19,151,409 | 2,710,323 | (2,924,648) | 18,937,084 | | Segment Liabilities | 1,667,412 | 112,842 | (8,887) | 1,771,367 | 4. Income Tax Expense The Group's income tax expense for the first half of 2025 decreased by 8.8% year-on-year to RMB 212,552 thousand, primarily due to the payment of withholding income tax on internal dividend distribution in the same period last year 2025 H1 Income Tax Expense | Tax Category | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Current tax | 193,500 | 236,439 | | Deferred tax | 19,052 | (3,505) | | Income Tax Expense for the Period | 212,552 | 232,934 | - Income tax expense decreased by 8.8% year-on-year, primarily due to the payment of withholding income tax on internal dividend distribution by the Group in the same period last year[91] 5. Profit for the Period The Group's profit for the period in the first half of 2025 increased by 3.1% year-on-year to RMB 931,493 thousand, primarily due to revenue growth and increased equity investment income, with the calculation of profit for the period considering various debits and credits - Profit for the period increased by 3.1% year-on-year to RMB 931,493 thousand, primarily due to revenue growth and increased equity investment income[92][122] 2025 H1 Major Debits and Credits in Profit for the Period Calculation | Item | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 23,713 | 23,330 | | Amortization of intangible assets | 97,751 | 90,733 | | Cost of inventories recognized as expense | 1,008,582 | 820,236 | | Equity-settled share-based payment expenses | 27,310 | - | | Interest income | (47,841) | (67,066) | | Net exchange (gains) losses | (16,771) | 2,584 | 6. Dividends During the reporting period, the company declared and paid a final dividend for the year ended December 31, 2024, totaling RMB 284,167 thousand, and subsequent to the reporting period, the directors resolved to pay an interim dividend of RMB 0.1555 per share, totaling RMB 376,388 thousand - During the reporting period, a final dividend of RMB 0.1174 per share for the year ended December 31, 2024, totaling RMB 284,167 thousand, was paid[139] - Subsequent to the reporting period, the directors resolved to pay an interim dividend of RMB 0.1555 per share, totaling RMB 376,388 thousand (2024 same period: RMB 0.1507 per share, totaling RMB 364,171 thousand)[139] 7. Earnings Per Share Basic earnings per share attributable to owners of the company are calculated by dividing the profit for the period attributable to owners of the company by the weighted average number of ordinary shares outstanding, with basic earnings per share for the six months ended June 30, 2025, being RMB 0.3892, and no diluted earnings per share presented due to the absence of potential ordinary shares outstanding 2025 H1 Basic Earnings Per Share Calculation | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Earnings used to calculate basic earnings per share (RMB thousands) | 941,178 | 910,426 | | Weighted average number of ordinary shares | 2,418,526,188 | 2,438,355,600 | | Basic Earnings Per Share (RMB) | 0.3892 | 0.3734 | - Diluted earnings per share are not presented as there were no potential ordinary shares outstanding[140] 8. Changes in Property, Plant and Equipment During the reporting period, the Group spent RMB 7,298 thousand on the purchase of property, plant and equipment to enhance manufacturing and management efficiency - During the reporting period, the Group spent RMB 7,298 thousand on the purchase of property, plant and equipment (2024 same period: RMB 4,329 thousand)[141] 9. Interests in Associates As of June 30, 2025, the Group's total interests in associates amounted to RMB 3,584,523 thousand, primarily including investments in Tibet Pharmaceutical, Shenzhen Kangmai Biotechnology Co., Ltd., Eye Tech Care ("ETC"), PharmaGend Global Medical Services Pte. Ltd, and Higend Sciences Limited, with the fair value of Tibet Pharmaceutical determined by its market quotation June 30, 2025 Interests in Associates | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Investment cost in associates | 2,909,252 | 2,783,585 | | Impairment loss on interests in associates | (100,000) | (100,000) | | Share of post-acquisition profits and other comprehensive income, net of dividends received | 725,973 | 682,399 | | Exchange adjustments | 49,298 | 23,843 | | Total | 3,584,523 | 3,389,827 | - Key associates include Tibet Pharmaceutical (37.36% equity interest), Shenzhen Kangmai Biotechnology Co., Ltd. (50.00% equity interest), Eye Tech Care ("ETC") (36.17% equity interest), PharmaGend Global Medical Services Pte. Ltd (45.00% equity interest), and Higend Sciences Limited (50.00% equity interest)[143] - The fair value of Tibet Pharmaceutical is determined by its market quotation on the Shanghai Stock Exchange, classified as Level 1 input as defined by IFRS 13[144] 10. Trade and Other Receivables and Prepayments As of June 30, 2025, the Group's total trade and other receivables and prepayments amounted to RMB 2,048,718 thousand, of which trade receivables (net of allowance for credit losses) were RMB 1,442,124 thousand, an 18.0% year-on-year increase, with the credit period generally ranging from 0 to 90 days, and all bills receivable due within six months after the end of the reporting period June 30, 2025 Trade and Other Receivables and Prepayments | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net) | 1,442,124 | 1,222,479 | | Bills receivable | 178,560 | 198,805 | | Prepayments for purchases | 260,315 | 204,617 | | Other receivables and deposits | 167,719 | 154,582 | | Total | 2,048,718 | 1,780,483 | - Trade receivables (net of allowance for credit losses) increased by 18.0% year-on-year, with an average trade receivables turnover period of 79 days, a decrease of 1 day compared to the same period last year[94][145] - The Group generally grants credit periods of 0 to 90 days to trade customers, with some customers extending up to four months[145] 11. Amounts Due from Associates As of June 30, 2025, amounts due from associates include RMB 30,000 thousand for non-trade exclusive distribution rights deposits (paid to Tibet Pharmaceutical) and RMB 475,014 thousand for trade-related promotion income receivables (due from Tibet Pharmaceutical and ETC), with a credit period of 90 days for trade-related amounts - Approximately RMB 30,000 thousand is non-trade in nature, representing exclusive distribution rights deposits paid to Tibet Pharmaceutical[146] - Approximately RMB 475,014 thousand is trade in nature, representing promotion income receivables from Tibet Pharmaceutical and ETC, with a credit period of 90 days[146] 12. Trade and Other Payables As of June 30, 2025, the Group's total trade and other payables amounted to RMB 638,720 thousand, of which trade payables were RMB 137,316 thousand, a 3.6% year-on-year decrease, with the average trade payables turnover period being 23 days, a decrease of 9 days compared to the same period last year, primarily reflecting differences in settlement timing with suppliers June 30, 2025 Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 137,316 | 142,432 | | Accrued salaries and welfare | 243,965 | 214,922 | | Other taxes payable | 47,870 | 27,416 | | Accrued promotion expenses | 118,655 | 26,315 | | Accrued expenses | 66,703 | 61,232 | | Other payables | 24,211 | 12,480 | | Total | 638,720 | 484,797 | - Trade payables decreased by 3.6% year-on-year, with an average trade payables turnover period of 23 days, a decrease of 9 days compared to the same period last year[95][147] - The credit period for goods purchased ranges from 0 to 120 days[147] 13. Bank Borrowings As of June 30, 2025, the Group's bank borrowings amounted to RMB 715,000 thousand, all of which are unsecured current liabilities, with bank borrowings decreasing by RMB 116,300 thousand during the reporting period, and the weighted average annual interest rate decreasing to approximately 2.3% June 30, 2025 Bank Borrowings | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank loans | 715,000 | 831,300 | | Total | 715,000 | 831,300 | | Unsecured | 715,000 | 831,300 | | Classified as current liabilities | 715,000 | 831,300 | - Bank borrowings decreased by RMB 116,300 thousand during the reporting period, with a weighted average annual interest rate of approximately 2.3% (2024 same period: 3.3%)[148] 14. Share Capital As of June 30, 2025, the company's authorized share capital was 20,000,000 thousand shares, and issued and fully paid share capital was 2,439,529 thousand shares, amounting to RMB 83,564 thousand, with the company granting 3,973,400 shares to employees on March 28, 2025, with a fair value of RMB 27,310 thousand, which was recognized in profit or loss and offset against the cost of treasury shares June 30, 2025 Share Capital Structure | Item | Number of Shares (thousands) | Amount (RMB thousands) | | :--- | :--- | :--- | | Authorized share capital | 20,000,000 | 765,218 | | Issued and fully paid share capital | 2,439,529 | 83,564 | - On March 28, 2025, the company granted 3,973,400 shares to employees, with a fair value of RMB 27,310 thousand, recognized in profit or loss and offset against the cost of treasury shares[149] 15. Fair Value Measurement of Financial Instruments Certain financial assets and liabilities of the Group are measured at fair value and categorized into Level 1 to 3 based on the observability of the inputs used in fair value measurement, with listed equity securities being Level 1, while unlisted equity investments and some financial assets at fair value through profit or loss are Level 3 or Level 2, valued using market approach or recent transaction approach, and the carrying amounts of financial assets and liabilities measured at amortized cost approximate their fair values - Fair value measurement of financial instruments is categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[150] June 30, 2025 Fair Value Measurement of Financial Instruments | Financial Instrument | Fair Value (June 30, 2025, RMB thousands) | Level | Valuation Technique and Key Parameters | | :--- | :--- | :--- | :--- | | Equity instruments at fair value through other comprehensive income - listed | 0 | Level 1 | Quoted prices in active markets | | Equity instruments at fair value through other comprehensive income - unlisted | 130,416 | Level 3 | Market approach, using market multiples | | Financial assets at fair value through profit or loss - listed | 1,442 | Level 1 | Quoted prices in active markets | | Financial assets at fair value through profit or loss - capital funds | 1,067,968 | Level 3 | Direct comparison - reference to recent transaction prices of underlying investments | | Financial assets at fair value through profit or loss - unlisted | 1,254,932 | Level 2 | Recent transaction approach, quoted prices in inactive markets | | Financial assets at fair value through profit or loss - unlisted | 189,761 | Level 3 | Market approach, using market multiples | - The carrying amounts of financial assets and financial liabilities measured at amortized cost approximate their fair values[153] 16. Capital Commitments As of June 30, 2025, the Group had capital expenditures totaling RMB 481,023 thousand contracted for the purchase of assets but not yet recognized in the condensed consolidated financial statements, primarily for financial assets at fair value through profit or loss and interests in associates June 30, 2025 Capital Commitments | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 446,482 | 576,499 | | Interests in associates | 34,541 | 34,541 | | Total | 481,023 | 611,040 | 17. Related Party Transactions The Group engaged in multiple related party transactions, including promotion income with Tibet Pharmaceutical, goods purchases and promotion income with ETC, and service fees and royalty fees with Shenzhen Xuanguan Health Medical Internet Co., Ltd., Shenzhen Xuanguan Health Technology Co., Ltd., and A&B (HK) Company Limited, with the total remuneration of key management personnel also disclosed 2025 H1 Related Party Transactions | Related Company Name | Relationship | Nature of Transaction | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- |