同仁堂国药(03613) - 2025 - 中期财报

Corporate Information Board and Committee Composition The company's board members and committee compositions are outlined, including key corporate information - The Board of Directors includes Chairman Gu Haiou and Vice Chairman Le Zheng, with Audit, Nomination, and Remuneration Committees established[3] - The Company Secretary is Tsang Fung Yi, and the authorized representatives are Gu Haiou and Yan Han[3] - The Hong Kong share registrar is Computershare Hong Kong Investor Services Limited, the auditor is Ernst & Young, and the stock code is 3613[3] Financial Highlights Financial Performance for the First Half of 2025 Key financial indicators for the six months ended June 30, 2025, show revenue and profit growth Key Financial Data for the Six Months Ended June 30 | Indicator | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761,736 | 664,518 | 14.6% | | Gross Profit | 463,038 | 451,770 | 2.5% | | Profit Before Income Tax | 289,671 | 283,642 | 2.1% | | Profit for the Period | 245,936 | 240,344 | 2.3% | | Profit Attributable to Owners of the Company | 234,866 | 219,782 | 6.9% | | Earnings Per Share | HK$0.28 | HK$0.26 | HK$0.02 | Key Balance Sheet Data as of June 30, 2025 | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 2,005,545 | 1,819,753 | 10.2% | | Total Assets | 4,534,467 | 4,559,525 | -0.5% | | Total Equity | 4,222,210 | 4,246,434 | -0.6% | Management Discussion and Analysis Business Overview The Group achieved revenue and profit growth in H1 2025 despite global economic challenges - The global economy faces weakening growth momentum, rising protectionism, trade fragmentation, and high debt levels[12] - The retail sectors in Hong Kong and Macau are under pressure from shifting consumption patterns, increased competition, and external economic volatility[12] Group Core Financial Performance for H1 2025 | Indicator | H1 2025 (HK$ million) | H1 2024 (HK$ million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 761.7 | 664.5 | 14.6% | | Profit Attributable to Owners of the Company | 234.9 | 219.8 | 6.9% | Market Expansion The Group expanded its retail presence, enhanced brand promotion, and advanced international strategic cooperation - Added one new retail terminal in Yuen Long, Hong Kong, and upgraded the image of offline stores[14] - Updated packaging designs for products like Rhodiola Capsules and promoted the brand through various media platforms[14] - Participated in Hong Kong community events to showcase traditional Chinese medicine products and culture[14] - Conducted anti-counterfeiting operations in Hong Kong, collaborating with customs to combat infringing goods[15] - Launched campus cultural activities and a student ambassador program to promote traditional Chinese medicine culture[15] - Signed a strategic cooperation agreement with China Duty Free International to promote the global value of traditional Chinese medicine[18] - Successfully launched the Arabic edition of the "Illustrated Handbook of Chinese Materia Medica" to expand influence in the Middle East[18] - Visited the Ministry of Health of Cambodia to discuss product registration and co-organized cultural exchange events[19] Production and R&D The Group enhanced production efficiency, achieved R&D milestones, and deepened industry-academia-research collaboration - The Taipo production and R&D base passed Hong Kong GMP and ISO22000 certifications and upgraded its layout to enhance automation and reduce costs[21] - The self-developed Dendrobii Nobilis Powder received a registration certificate for proprietary Chinese medicine in Hong Kong[21] - A subsidiary obtained a patent for an anti-aging product's preparation method and use from the National Intellectual Property Administration[21] - The clinical trial protocol for a Ganoderma and Turmeric compound capsule passed expert review[21] - Beijing Tong Ren Tang deer products were launched in New Zealand, combining traditional processing techniques with standardized production[22] - Established cooperative research platforms with universities in Hong Kong and Macau to foster a deeply integrated innovation system[22] Outlook The Group will deepen R&D innovation and expand its business footprint to seize opportunities in the evolving pharmaceutical industry - The pharmaceutical industry is in a key period of rapid development, with growing demand driven by an aging population and rising health awareness[24] - The Group will deepen its R&D innovation strategy, enrich its product pipeline, and build new growth engines[24] - The Group will focus on a strategy of deep integration between online and offline channels to accelerate business expansion and enhance core competitiveness[24] Human Resources The Group maintained a stable workforce and reviewed its remuneration policies to attract and retain talent Employee Numbers and Costs | Indicator | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Number of Employees | 789 | 779 | | Staff Costs (HK$ thousands) | 113,500 | 104,500 | - The Group regularly reviews its remuneration policies and provides discretionary bonuses based on performance to attract and retain high-caliber employees[25] Financial Review The Group maintained a sound financial position with sufficient liquidity, though no interim dividend was proposed Financial Resources and Liquidity The Group maintained a strong financial position with a significant increase in cash and bank balances Cash and Bank Balances | Indicator | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 2,005.5 | 1,819.8 | 10.2% | - The increase in cash and bank balances was mainly due to the collection of trade receivables and increased revenue and profit[26] - The Group has sufficient liquidity and financial resources to meet its daily operational and working capital needs[26] - Cash and bank balances are primarily held in HKD, RMB, and MOP with reputable financial institutions and mature within one year[26] Capital Expenditure Capital expenditure increased in the first half of 2025, primarily for retail terminal renovations and equipment purchases Capital Expenditure | Indicator | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Capital Expenditure | 16.4 | 11.2 | - Capital expenditure was mainly used for the renovation of retail terminals and the purchase of machinery and equipment for production and operation[29] Foreign Currency Risk The Group's exposure to foreign currency risk was not significant, and no hedging instruments were used - The Group's transactions, monetary assets, and liabilities are mainly denominated in HKD, RMB, and MOP[30] - Exchange rate fluctuations did not have a significant impact on the Group during the period[30] - The Group did not engage in any derivative activities or use any financial instruments to hedge against foreign exchange risk[31] Material Investments, Acquisitions, and Disposals The Group had no material investments, acquisitions, or disposals during the first half of 2025 - During the period, the Group had no material investments, acquisitions, or disposals[32] Pledge of Group Assets No assets of the Group were pledged as of June 30, 2025 - As of June 30, 2025, the Group had no pledged assets[33] Contingent Liabilities The Group had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no significant contingent liabilities[34] Dividends The Board of Directors did not recommend the payment of an interim dividend for the first half of 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[35] Condensed Consolidated Statement of Profit or Loss Condensed Consolidated Statement of Profit or Loss for the First Half of 2025 The Group's revenue and profit attributable to owners increased, driven by sales growth Key Data from the Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Revenue | 761,736 | 664,518 | | Cost of Sales | (298,698) | (212,748) | | Gross Profit | 463,038 | 451,770 | | Distribution and Selling Expenses | (102,641) | (129,014) | | General and Administrative Expenses | (88,659) | (74,685) | | Net Impairment Losses (Charged)/Reversed on Financial Assets | (7,334) | 6,907 | | Operating Profit | 265,341 | 258,878 | | Net Finance Income | 24,141 | 31,746 | | Profit Before Income Tax | 289,671 | 283,642 | | Profit for the Period | 245,936 | 240,344 | | Profit Attributable to Owners of the Company | 234,866 | 219,782 | | Basic and Diluted Earnings Per Share (HK$) | 0.28 | 0.26 | Condensed Consolidated Statement of Comprehensive Income Condensed Consolidated Statement of Comprehensive Income for the First Half of 2025 Total comprehensive income increased, primarily due to a positive turn in currency translation differences Key Data from the Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Profit for the Period | 245,936 | 240,344 | | Currency Translation Differences Attributable to Owners of the Company | 12,086 | (5,133) | | Net Currency Translation Differences Attributable to Non-controlling Interests | 2,564 | (1,389) | | Fair Value Change of Financial Assets at FVTOCI | (825) | 990 | | Other Comprehensive Income/(Loss) for the Period | 13,825 | (5,532) | | Total Comprehensive Income for the Period | 259,761 | 234,812 | | Comprehensive Income Attributable to Owners of the Company | 246,127 | 215,639 | | Comprehensive Income Attributable to Non-controlling Interests | 13,634 | 19,173 | Condensed Consolidated Statement of Financial Position Condensed Consolidated Statement of Financial Position as of June 30, 2025 The Group's total assets remained stable, with shifts in the composition of current assets Key Data from the Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 609,567 | 593,778 | | Current Assets | 3,924,900 | 3,965,747 | | Total Assets | 4,534,467 | 4,559,525 | | Equity and Liabilities | | | | Equity Attributable to Owners of the Company | 4,028,502 | 4,075,360 | | Non-controlling Interests | 193,708 | 171,074 | | Total Equity | 4,222,210 | 4,246,434 | | Non-current Liabilities | 96,279 | 77,737 | | Current Liabilities | 215,978 | 235,354 | | Total Liabilities | 312,257 | 313,091 | Condensed Consolidated Statement of Changes in Equity Condensed Consolidated Statement of Changes in Equity for the First Half of 2025 Total equity slightly decreased due to dividend payments offsetting the profit generated during the period Summary of the Condensed Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (HK$ thousands) | January 1, 2025 (HK$ thousands) | | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 4,028,502 | 4,075,360 | | Non-controlling Interests | 193,708 | 171,074 | | Total Equity | 4,222,210 | 4,246,434 | - Profit for the period was HK$234,866 thousand, but dividends paid of HK$292,985 thousand led to a decrease in retained earnings[49] - Non-controlling interests increased, mainly due to profit for the period of HK$11,070 thousand and capital contributions from non-controlling shareholders of HK$9,000 thousand[49] Condensed Consolidated Statement of Cash Flows Condensed Consolidated Statement of Cash Flows for the First Half of 2025 Net cash from operating activities turned positive, while financing activities were dominated by dividend payments Summary of the Condensed Consolidated Statement of Cash Flows | Indicator | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Net Cash Generated from/(Used in) Operating Activities | 480,494 | (303,857) | | Net Cash (Used in)/Generated from Investing Activities | (158,081) | 1,350,425 | | Net Cash Used in Financing Activities | (318,064) | (320,226) | | Net Increase in Cash and Cash Equivalents | 4,349 | 726,342 | | Cash and Cash Equivalents at End of Period | 1,788,954 | 1,721,491 | - Net cash from operating activities turned positive in H1 2025 from a negative value in the same period of 2024, indicating improved operational efficiency[52] - Cash outflow from investing activities increased, mainly due to an increase in short-term bank deposits with an original maturity of more than three months of HK$169,912 thousand[52] - Cash outflow from financing activities was primarily for the payment of dividends to the Company's shareholders amounting to HK$292,985 thousand[52] Notes to the Condensed Consolidated Interim Financial Information 1 General Information The Group is engaged in the production and sale of Chinese medicine products and provides TCM diagnostic services - The Group is engaged in the production, retail, and wholesale of Chinese medicine products and health products, and provides TCM diagnostic services[54] - The Company's immediate holding company is Beijing Tong Ren Tang Technologies Co Ltd, and the ultimate holding company is China Beijing Tong Ren Tang Group Co, Ltd[54] - The Company's shares were transferred to the Main Board of the Stock Exchange on May 29, 2018[54] 2 Basis of Preparation The unaudited interim financial information was prepared in accordance with HKAS 34 and approved by the Board - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the Listing Rules[56] - This financial information was approved for issue by the Board of Directors on August 22, 2025, and has not been audited[54][55] 3 Significant Accounting Policies The accounting policies adopted are consistent with the 2024 annual financial statements - The accounting policies adopted are consistent with those of the annual financial statements for the year ended December 31, 2024[58] - The Group has adopted amendments to HKAS 21 "Lack of Exchangeability," which had no significant financial impact on this interim financial information[60] 4 Estimates The preparation of interim financial information requires management to make judgments, estimates, and assumptions - The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ[61] - The key sources of estimation uncertainty are consistent with those applied in the annual financial statements for the year ended December 31, 2024[61] 5 Financial Risk Management The Group's financial risk management policies and procedures have not changed significantly since the last year-end - The Group's activities expose it to market risk, credit risk, and liquidity risk[63] - The risk management policies and procedures have not changed since the last year-end[64] - There has been no significant change in the contractual undiscounted cash outflows for financial liabilities compared to December 31, 2024[65] 6 Revenue and Segment Information The Group's revenue is primarily derived from product sales, with Hong Kong being the largest geographical segment Revenue Composition | Revenue Source | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Sales of Goods | 739,820 | 642,311 | | Service Income | 21,847 | 21,996 | | Brand Usage Fee Income | 69 | 211 | | Total Revenue | 761,736 | 664,518 | - The Group has three reportable operating segments: Hong Kong, Mainland China, and Overseas (including Macau)[70][73] Revenue from External Customers by Region for H1 2025 | Region | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Hong Kong | 434,934 | 333,807 | | Mainland China | 117,993 | 116,342 | | Overseas | 208,809 | 214,369 | | Total | 761,736 | 664,518 | Total Assets and Liabilities by Region as of June 30, 2025 | Region | Total Assets (HK$ thousands) | Total Liabilities (HK$ thousands) | | :--- | :--- | :--- | | Hong Kong | 3,558,697 | (154,559) | | Mainland China | 384,502 | (38,670) | | Overseas | 591,268 | (119,028) | | Total | 4,534,467 | (312,257) | 7 Expenses by Nature The cost of inventories sold increased significantly, while promotion and advertising expenses decreased sharply Major Expense Items | Expense Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Cost of Inventories Sold | 262,616 | 169,295 | | Employee Benefit Expense | 113,545 | 104,467 | | Depreciation of Right-of-use Assets | 35,769 | 32,569 | | Amortisation of Intangible Assets | 3,065 | 1,686 | | Depreciation of Property, Plant and Equipment | 9,218 | 8,655 | | Net Impairment Charge/(Reversal) on Trade Receivables | 7,334 | (6,907) | | Promotion and Advertising Expenses | 9,879 | 40,371 | - Promotion and advertising expenses decreased significantly from HK$40,371 thousand in 2024 to HK$9,879 thousand in 2025[81] 8 Net Finance Income Net finance income decreased due to lower bank interest income Composition of Net Finance Income | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Bank Interest Income | 27,520 | 34,965 | | Finance Costs on Lease Liabilities | (3,379) | (3,215) | | Net Finance Income | 24,141 | 31,746 | 9 Income Tax Expense Income tax expense remained relatively stable, with the Group assessing the impact of Pillar Two legislation Income Tax Expense | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Current Income Tax | 39,623 | 25,684 | | Deferred Income Tax | 4,112 | 17,614 | | Income Tax Expense | 43,735 | 43,298 | - Hong Kong profits tax is calculated at 16.5%, and China corporate income tax is calculated at 25%[84] - The Group has assessed the impact of Pillar Two legislation and does not expect to face significant top-up tax risk in Macau or other jurisdictions[87] - The Group has adopted the temporary mandatory exception provided by the HKICPA and does not recognise or disclose deferred tax assets and liabilities related to Pillar Two income taxes[87] 10 Earnings Per Share Basic and diluted earnings per share increased to HK$0.28, with no potential dilutive shares outstanding Calculation of Earnings Per Share | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HK$ thousands) | 234,866 | 219,782 | | Weighted Average Number of Ordinary Shares in Issue (thousands) | 837,100 | 837,100 | | Earnings Per Share (HK$) | 0.28 | 0.26 | - There were no potential dilutive shares outstanding for the six months ended June 30, 2025[89] 11 Dividends The final dividend for the year 2024 was paid in June 2025, and no interim dividend for 2025 was proposed Dividends Paid | Dividend Year | Payment Date | Amount (HK$) | | :--- | :--- | :--- | | Year ended December 31, 2024 | June 2025 | 292,985,000 | | Year ended December 31, 2023 | June 2024 | 276,243,000 | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[92] 12 Property, Plant and Equipment The net book value of property, plant, and equipment saw a slight increase during the period Net Book Value Movement of Property, Plant and Equipment | Item | Amount (HK$ thousands) | | :--- | :--- | | January 1, 2025 (Audited) | 211,111 | | Additions | 8,345 | | Disposals | (37) | | Depreciation Charge | (9,218) | | Currency Translation Differences | 4,990 | | June 30, 2025 (Unaudited) | 215,191 | - As of June 30, 2025, no land and buildings were pledged to secure bank borrowings[93] 13 Intangible Assets The net book value of intangible assets decreased slightly due to amortization Net Book Value Movement of Intangible Assets | Item | Goodwill (HK$ thousands) | Computer Software (HK$ thousands) | Other Intangible Assets (HK$ thousands) | Total (HK$ thousands) | | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 (Audited) | 49,419 | 17,677 | 217 | 67,313 | | Additions | — | 1,700 | — | 1,700 | | Amortisation | — | (2,848) | (217) | (3,065) | | Currency Translation Differences | — | 5 | — | 5 | | June 30, 2025 (Unaudited) | 49,419 | 16,534 | — | 65,953 | 14 Inventories Total inventories decreased compared to the end of 2024, mainly due to a reduction in raw materials and finished goods Composition of Inventories | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Raw Materials | 1,284,360 | 1,361,708 | | Work in Progress | 16,247 | 15,281 | | Finished Goods and Trading Goods | 156,690 | 212,027 | | Total | 1,457,297 | 1,589,016 | 15 Trade Receivables and Other Current Assets The balance of trade receivables and other current assets decreased from the end of the previous year Composition of Trade Receivables and Other Current Assets | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Trade Receivables, Gross | 459,345 | 543,452 | | Less: Loss Allowance | (50,496) | (42,374) | | Net Trade Receivables | 408,849 | 501,078 | | Prepayments | 21,423 | 17,761 | | Other Receivables | 12,856 | 23,963 | | Deposits | 17,331 | 13,206 | | Total | 462,058 | 556,978 | Ageing Analysis of Trade Receivables (June 30, 2025) | Ageing | Amount (HK$ thousands) | | :--- | :--- | | Up to 90 days | 204,134 | | 91 to 180 days | 82,616 | | 181 to 365 days | 57,327 | | Over 365 days | 115,268 | | Total | 459,345 | 16 Share Capital The Company's issued and fully paid share capital remained unchanged during the period Share Capital Information | Item | Number of Shares | Share Capital (HK$ thousands) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares at Jan 1, 2025 and June 30, 2025 | 837,100,000 | 938,789 | 17 Trade and Other Payables Total trade and other payables decreased, primarily due to a reduction in accrued expenses and other payables Composition of Trade and Other Payables | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Trade Payables | 50,412 | 38,345 | | Accrued Expenses and Other Payables | 68,454 | 113,825 | | Contract Liabilities | 7,441 | 5,138 | | Total | 126,307 | 157,308 | Ageing Analysis of Trade Payables (June 30, 2025) | Ageing | Amount (HK$ thousands) | | :--- | :--- | | 90 days | 40,974 | | 91 to 180 days | 1,580 | | 181 to 365 days | 690 | | Over 365 days | 7,168 | | Total | 50,412 | 18 Commitments The Group had capital commitments for property, plant, equipment, and intangible assets Capital Commitments | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Contracted but not provided for — property, plant and equipment and intangible assets | 13,234 | 16,050 | Lease Commitments (Short-term and Low-value Leases) | Period | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Within one year | 1,867 | 1,013 | - As of June 30, 2025, the Group had no relevant lease commitments for leases not yet commenced[102] 19 Significant Related Party Transactions The Group engaged in various transactions with related parties, including sales, purchases, and rental expenses Sales of Goods to Related Parties | Related Party | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Intermediate holding companies | 5,558 | — | | Fellow subsidiaries | 68,999 | 71,024 | | Joint ventures | — | 685 | | Total | 74,557 | 71,709 | Purchases of Goods from Related Parties | Related Party | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Immediate holding company | 9,319 | 30,494 | | Intermediate holding companies | 21,447 | 51,924 | | Fellow subsidiaries | 413 | 352 | | Total | 31,179 | 82,770 | Rental Expenses to Related Parties | Related Party | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Immediate holding company | 504 | 504 | | Fellow subsidiaries | 2,265 | 2,294 | | Total | 2,769 | 2,798 | Key Management Personnel Remuneration | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | | :--- | :--- | :--- | | Salaries and other short-term employee benefits | 5,070 | 3,835 | | Pension costs | 448 | 325 | | Total | 5,518 | 4,160 | - Brand usage fees are charged annually at the higher of 1% of the joint venture's operating revenue or 1.5% of its profit before tax[108] 20 Comparative Figures Certain comparative figures have been reclassified to conform with the current period's presentation - Certain comparative figures have been reclassified to conform with the presentation and disclosure of the current period[109] Other Information Directors' and Chief Executives' Interests in Shares No directors or chief executives held any interests in the shares of the Company or its associated corporations - As of June 30, 2025, no director or chief executive of the Company had any interest in the shares, underlying shares, or debentures of the Company or any of its associated corporations that required notification under Part XV of the SFO[111] Substantial Shareholders The Company's substantial shareholders include Tong Ren Tang Technologies, Tong Ren Tang Shares, and Tong Ren Tang Group Substantial Shareholders' Interests | Shareholder Name | Capacity | Number of Shares | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Tong Ren Tang Technologies | Beneficial owner | 318,540,000 | 38.05% | | Tong Ren Tang Shares | Beneficial owner | 281,460,000 | 33.62% | | Tong Ren Tang Shares | Interest in a controlled corporation | 318,540,000 | 38.05% | | Tong Ren Tang Group Co | Interest in a controlled corporation | 600,000,000 | 71.67% | - Tong Ren Tang Group Co holds a total interest of 71.67% in the Company through its control over Tong Ren Tang Shares and Tong Ren Tang Technologies[112][117] Rights to Acquire Shares or Debentures No arrangements were in place to grant directors or chief executives rights to subscribe for the Company's securities - During the period, no arrangements were made by the Company, its subsidiaries, or fellow subsidiaries that would grant directors, chief executives, or their associates the right to subscribe for securities of the Company or any associated corporation[116] Competing Business Interests A Deed of Non-competition is in place to delineate business activities and prevent competition with controlling shareholders - The Company entered into a Deed of Non-competition in 2013 with its controlling shareholders to define respective business areas and avoid competition[118] - Restricted businesses include the R&D, manufacturing, and sale of certain products outside Mainland China and new overseas registrations under the "Tong Ren Tang" brand[118][119] - A Competition Executive Committee, comprising two disinterested directors, was established to conduct quarterly checks to ensure compliance with the deed[122][125] - A Monitoring Committee, comprising three independent non-executive directors, reviews the records of the Competition Executive Committee quarterly[122][125] Purchase, Sale, or Redemption of the Company's Listed Securities The Company did not purchase, sell, or redeem any of its listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[122] - As of June 30, 2025, the Company did not hold any treasury shares[123] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers All directors have complied with the required standards for securities transactions throughout the period - The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules[124] - All directors confirmed that they have complied with the Model Code and the Company's code of conduct for securities transactions by directors during the period[124] Corporate Governance Code The Company has complied with the Corporate Governance Code throughout the first half of 2025 - During the period, the Company has complied with the provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[126] Changes in Directors' Information There were several changes to the Board of Directors and their roles in May 2025 - Mr. Chen Fei resigned as an Executive Director, Executive Vice General Manager, and member of the Competition Executive Committee on May 12, 2025[127] - Mr. Le Zheng was appointed as an Executive Director and Vice Chairman of the Board on May 12, 2025[127] - Mr. Yan Han was appointed as an Executive Director, member of the Competition Executive Committee, and an authorized representative on May 12, 2025[127] Risk Management and Internal Control The Group maintains a "three lines of defense" model for its risk management and internal control systems - The Group's risk management and internal control system is based on a "three lines of defense" model, including daily operational management, risk and compliance management, and independent supervision[128] - The Group proactively and systematically identifies and assesses operational risks, clarifies control responsibilities, and reviews the effectiveness of measures[130] - Risk monitoring results are compiled into a group risk management report and presented to the Audit Committee and the Board for ongoing supervision[130] Audit Committee The Audit Committee has reviewed the unaudited interim financial information and report for the period - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial information and interim report for the six months ended June 30, 2025[131] - There were no disagreements between the Board and the Audit Committee regarding the accounting treatments adopted by the Company[131]