永泰生物(06978) - 2025 - 中期财报

Company Information This section provides essential corporate details, including board composition, governance structure, and fundamental operational information Board of Directors and Corporate Governance This section lists the company's board members, committee compositions (audit, remuneration, nomination), and key positions, reflecting its governance structure - The Board of Directors includes Executive Director Mr. Tan Zheng (Chairman), Dr. Wang Yu (CEO and CTO, resigned), and several Non-executive and Independent Non-executive Directors[4] - The Audit Committee is chaired by Mr. Ng Chi Kit, the Remuneration Committee by Professor Wang Yingdian, and the Nomination Committee by Mr. Tan Zheng[4] Company Basic Information This section provides the company's main bankers, headquarters, principal places of business, registered office, share registrar, stock code, website, and listing date - The company's headquarters and principal place of business in China are located at 8th Floor, Building 1, Guosheng Science and Technology Park, No. 1 Kangding Street, Beijing Economic-Technological Development Area, Beijing, China[5] - The company's stock code is 6978, and it was listed on the Stock Exchange on July 10, 2020[5] Financial and Operating Data Summary This section summarizes the Group's key financial and operational performance for the six months ended June 30, 2025, highlighting significant changes in profitability and financial position Summary for the Six Months Ended June 30, 2025 For the six months ended June 30, 2025, the company's loss expanded by 39.4% to RMB 129.03 million, primarily due to a net other gains and losses turning into a loss; current assets significantly decreased by 53.4%, leading to a 33.0% increase in net current liabilities and a 784.2% surge in net liabilities Key Financial Data Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 13,036 | 6,526 | 99.8 | | Net other gains and losses | (51,045) | 19,836 | (357.3) | | Administrative expenses | (19,643) | (23,048) | (14.8) | | Research and development expenses | (67,449) | (91,118) | (26.0) | | Finance costs | (3,350) | (3,851) | (13.0) | | Other expenses | (579) | (901) | (35.7) | | Loss before tax | (129,030) | (92,556) | 39.4 | | Loss and total comprehensive expenses for the period | (129,032) | (92,556) | 39.4 | | Loss attributable to owners of the Company | (129,103) | (92,515) | 39.5 | | Basic and diluted loss per share | (0.25) | (0.18) | - | Key Balance Sheet Data (Period-end) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 448,136 | 476,548 | (6.0) | | Current assets | 40,763 | 87,494 | (53.4) | | Current liabilities | (496,539) | (430,206) | 15.4 | | Net current liabilities | (455,776) | (342,712) | 33.0 | | Non-current liabilities | (137,845) | (150,289) | (8.3) | | Net liabilities | (145,485) | (16,453) | 784.2 | Company Overview This section provides a general overview of the Group's core business, key product pipeline, and strategic positioning in the cell immunotherapy sector Overview The Group is a leading cell immunotherapy biopharmaceutical company in China, with nearly 18 years of focus on T-cell immunotherapy R&D and commercialization; its core pipeline product EAL® has over a decade of clinical application track record, showing therapeutic effects on various cancers, with a conditional NDA currently under review by the NMPA - The Group is a leading cell immunotherapy biopharmaceutical company in China, focusing on T-cell immunotherapy R&D and commercialization for nearly 18 years[7] - The core pipeline product EAL® is a multi-target cell immunotherapy product with over ten years of clinical application track record, demonstrating therapeutic effects on various cancers[7] - The conditional NDA for EAL® is currently under review by the Center for Drug Evaluation of the National Medical Products Administration (NMPA) and was included in China's priority review and approval list in March 2025[7][11] - The product pipeline covers non-genetically modified and genetically modified products, including EAL®, 6B11, CAR-T cell series, and TCR-T cell series[7] Management Discussion and Analysis This section provides an in-depth review of the Group's business operations, research and development progress, and financial performance for the reporting period Business Review The Group continued to advance the R&D of multiple cell immunotherapy products during the reporting period, with the conditional NDA for core product EAL® under review and CAR-T-19 injection completing Phase II clinical trial enrollment and receiving breakthrough therapy designation; the company is also expanding R&D and production facilities, implementing a stringent quality assurance system, and plans to accelerate EAL® commercialization, expand CDMO business, and pursue strategic collaborations R&D of Pipeline Products The company has a rich pipeline of R&D products, including non-genetically modified products EAL® (post-surgery for liver cancer, post-surgery for gastric cancer) and 6B11 (platinum-resistant ovarian cancer), as well as genetically modified CAR-T series (CAR-T-19 YT003, Dinolunsi Injection, VAC-aT19) and TCR-T series (YT008, YT007); the conditional NDA for EAL® is under review, and CAR-T-19 injection has completed Phase II clinical trial enrollment and received breakthrough therapy designation - The conditional NDA for the core pipeline product EAL® is under review by the Center for Drug Evaluation of the NMPA, with 430 target patients enrolled in Phase II clinical trials[11] - CAR-T-19 injection received breakthrough therapy designation from the Center for Drug Evaluation for treating relapsed/refractory B-ALL patients aged 25 and below, and has completed enrollment of 52 target patients in Phase II clinical trials[14][15] - Dinolunsi Injection (for relapsed/refractory diffuse large B-cell lymphoma) has completed enrollment of 13 target patients in Phase I clinical trials[17] - aT19 injection received IND approval for Phase I clinical trials in February 2024, aiming to address insufficient persistence and recurrence issues in CAR-T cell therapy[18] - The TCR-T cell product pipeline has multiple products undergoing preclinical research, targeting clear cell renal carcinoma, CMV, and EBV viral infections[19] Group Facilities The Group owns an R&D and production center in Beijing covering approximately 27,604 square meters with an annual processing capacity of about 40,000 samples; to support EAL® commercialization and future demand, new R&D and production centers are planned in North China (Beijing) and East China (Shaoxing, Shanghai), with estimated total investments of approximately RMB 1.2 billion and RMB 1.0 billion, respectively - The Group's R&D and production center in Beijing, China, covers approximately 27,604 square meters and can process about 40,000 samples annually[22] - Plans are underway to construct an R&D and industrialization base in North China, with an estimated investment of approximately RMB 1.2 billion and an annual production capacity exceeding 200,000 batches[22] - Plans are also in place to establish an EAL® R&D and production center in East China, with an expected total investment of approximately RMB 1.0 billion, and construction of a production center in Shaoxing has commenced[25] Quality Assurance The Group has established a GMP-compliant quality management system covering the entire production process to ensure consistent product quality; EAL® production is standardized, and the quality department has 43 employees reporting directly to the CEO - The Group has developed quality management documents in accordance with GMP, covering production processes, quality standards, equipment operation, inspection, training, and environmental monitoring[23] - EAL® production has been standardized to ensure consistent product quality[24] - The quality department has 43 employees who report directly to the Chief Executive Officer, comprising two sub-teams: Quality Assurance and Quality Control[24] Future and Outlook The company plans to accelerate EAL® commercialization, advance preclinical research for CAR-T and TCR-T pipeline products, enhance its technology platform to enrich the product pipeline, develop viral vector production and CDMO services, and expand strategic collaborations and explore M&A opportunities based on organic growth - Plans include comprehensively advancing EAL® post-market commercialization preparations, covering government affairs, hospital access, marketing, medical, and sales[26] - Continued investment in preclinical research for CAR-T and TCR-T cell product pipelines is planned, particularly for treating viral infections and solid tumors[27][28] - A GMP-compliant viral vector production system has been established, and CDMO business is being developed based on its technology platform[29] - The company plans to expand strategic collaborations, seeking sales, technology transfer, and strategic partnerships for existing and R&D products, and exploring M&A opportunities[30] Financial Review The Group's financial performance for the six months ended June 30, 2025, showed an expanded loss, primarily due to fair value losses on other financial liabilities; liquidity deteriorated, with both current and quick ratios declining, and the company has utilized convertible bond proceeds and faces foreign exchange risk Operating Results Analysis For the six months ended June 30, 2025, the Group's loss before tax increased by 39.4% to RMB 129.03 million; other income rose by 99.8% to RMB 13.04 million due to increased government grants, but net other gains and losses shifted from a gain to a loss of RMB 51.05 million, mainly from fair value losses on other financial liabilities, while administrative and R&D expenses decreased by 14.8% and 26.0%, respectively Operating Results for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income | 13,036 | 6,526 | 6,510 | 99.8 | | Net other gains and losses | (51,045) | 19,836 | (70,881) | (357.3) | | Administrative expenses | (19,643) | (23,048) | 3,405 | (14.8) | | Research and development expenses | (67,449) | (91,118) | 23,669 | (26.0) | | Finance costs | (3,350) | (3,851) | 501 | (13.0) | | Other expenses | (579) | (901) | 322 | (35.7) | | Loss before tax | (129,030) | (92,556) | (36,474) | 39.4 | | Loss and total comprehensive expenses for the period | (129,032) | (92,556) | (36,476) | 39.4 | - Other income increased by 99.8% to RMB 13.0 million, primarily due to increased government grants for subscription funds incentives[32][33] - Net other gains and losses shifted from a gain of RMB 19.8 million in 2024 to a loss of RMB 51.0 million in 2025, mainly due to fair value losses on other financial liabilities[34] - Research and development expenses decreased by 26.0% to RMB 67.4 million, primarily due to lower contract costs, staff costs, and material costs for R&D projects[36][37] Income Tax Expense The Group's Chinese subsidiaries, Beijing Yongtai and Yongtai Ruike, enjoy a 15% preferential corporate income tax rate due to their high-tech enterprise status; Hong Kong subsidiaries have no taxable profits and are exempt from profits tax, and deferred tax assets are not recognized due to unpredictable future profit streams - Beijing Yongtai and Yongtai Ruike are recognized as high-tech enterprises, enjoying a 15% preferential corporate income tax rate[40] - For the six months ended June 30, 2025, income tax expense was RMB 2 thousand[31] Liquidity and Capital Resources The Group's bank balances and cash decreased to RMB 21.1 million, indicating tight liquidity; lease liabilities amounted to approximately RMB 111.7 million; convertible bonds totaling RMB 300.0 million were issued for EAL® clinical trials and new R&D and production center construction, with proceeds fully utilized and transfer completed post-reporting period - Bank balances and cash decreased from RMB 47.0 million as at December 31, 2024, to RMB 21.1 million as at June 30, 2025, primarily due to daily operating expenses[41] - As at June 30, 2025, lease liabilities amounted to approximately RMB 111.7 million[42] - Convertible bonds with a principal amount of RMB 300.0 million were issued for EAL® clinical trials (RMB 102.3 million) and the construction of new R&D and production centers (RMB 197.7 million), with proceeds fully utilized as at June 30, 2025[45][47] - The convertible bonds were transferred to an independent third party on July 15, 2025[48] Foreign Exchange The Group primarily operates in China and is exposed to foreign exchange rate fluctuations between RMB and HKD, but no currency hedging transactions were entered into during the reporting period - The Group is exposed to foreign exchange rate fluctuations between RMB and HKD[49] - No currency hedging transactions were entered into during the reporting period[49] Selected Financial Ratios The Group's current ratio and quick ratio both significantly declined, with the current ratio falling from 0.20 to 0.08 and the quick ratio from 0.19 to 0.07, mainly due to a decrease in financial assets at fair value through profit or loss and an increase in other financial liabilities Selected Financial Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 0.08 | 0.20 | | Quick ratio | 0.07 | 0.19 | | Gearing ratio | 0.14 | – | - The current ratio and quick ratio decreased, primarily due to financial assets at fair value through profit or loss decreasing to zero and an increase in other financial liabilities[52] Other Information This section covers various supplementary details including interim dividends, use of IPO proceeds, employee information, and corporate governance compliance Interim Dividend During the reporting period, the company neither paid, declared, nor proposed any interim dividend - No dividends were paid, declared, or proposed during the reporting period[53] Use of Net Proceeds from Listing and Over-allotment Option The company's net proceeds from global offering and over-allotment option were approximately HKD 1,127.8 million, with approximately HKD 1,124.8 million utilized as at June 30, 2025, primarily for EAL® clinical trials and commercialization, CAR-T-19 clinical trials, TCR-T series pipeline products, other R&D expenses, and working capital; the remaining proceeds are expected to be exhausted by the end of 2025 - The net proceeds from the global offering and over-allotment option were approximately HKD 1,127.8 million[54] - As at June 30, 2025, approximately HKD 1,124.8 million had been utilized, with HKD 385.6 million for EAL® clinical trials and commercialization, and HKD 374.5 million for CAR-T-19 and TCR-T series pipeline products[54][55] - The company expects the net proceeds to be fully utilized by the end of 2025[56] Material Investments, Acquisitions and Disposals As at the date of this interim report, the Group held no material investments and had no future plans for material investments or capital assets - The Group held no material investments or future plans for material investments or capital assets[57] Employees and Remuneration Policy As at June 30, 2025, the Group had 173 employees, with total remuneration of approximately RMB 26.0 million, a year-on-year decrease; the company has an evaluation system, provides training, and contributes to social insurance and housing provident funds for its Chinese employees - As at June 30, 2025, the Group had 173 employees in China[58] - Total employee remuneration for the six months ended June 30, 2025, was approximately RMB 26.0 million (compared to RMB 36.6 million for the same period in 2024)[58] Number of Employees by Function as at June 30, 2025 | Function | Number of Employees | | :--- | :--- | | General Management and Administration | 18 | | Research and Development | 13 | | Senior Management | 5 | | Production, Purification, Equipment, Safety and Supply Chain | 78 | | Quality | 43 | | Clinical Support and Business Development | 16 | | Total | 173 | Financing and Treasury Policies The Group adopts a stable and conservative financing and treasury policy aimed at maintaining optimal financial health, minimizing financial costs and risks, and regularly reviewing financing needs to support business operations and R&D - The Group adopts a stable and conservative financing and treasury policy, aiming to maintain optimal financial position, the most economical finance costs, and the lowest financial risks[62] - Cash and cash equivalents are typically deposited with financial institutions with low credit risk, and financing needs are regularly reviewed[62] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures This section discloses the interests of directors and the chief executive in the company's shares and underlying shares, with Mr. Tan Zheng holding beneficial interests and interests in controlled corporations, and Mr. Zheng Hyun Cheol holding interests in controlled corporations Directors' and Chief Executive's Interests in Shares and Underlying Shares | Name | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Tan Zheng | Beneficial interest | 5,000,000 | 0.97% | | | Interest in controlled corporation | 180,480,000 | 35.07% | | Mr. Zheng Hyun Cheol | Interest in controlled corporation | 44,112,000 | 8.57% | - Mr. Tan Zheng's interests include shares he can subscribe for as a share option grantee, and shares held by Tan Zheng Ltd, his wholly-owned company (including voting rights entrusted by passive minority shareholders)[64] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares This section lists the interests of substantial shareholders (excluding directors and the chief executive) in the company's shares and underlying shares, including Evodevo Ltd, Tan Zheng Ltd, Tasly (Hong Kong) Pharmaceutical Investment Co., Ltd. and its associates, Beijing Pharmaceutical Investment Management (BVI) Co., Ltd. and its associates, Greater Bay Area Common Home Development Fund, Tan Xiaoyang, Tan Yueyue, Zhang Junzheng, and Jiaze Global Capital Limited Substantial Shareholders' Interests in Shares and Underlying Shares | Shareholder Name/Name | Nature of Interest | Number of Shares Held (L) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Evodevo Ltd | Beneficial interest | 44,112,000 | 8.57% | | Tan Zheng Ltd | Beneficial interest | 38,400,000 | 7.46% | | | Interest of parties to an agreement | 142,080,000 | 27.61% | | Tasly (Hong Kong) Pharmaceutical Investment Co., Ltd. | Beneficial interest | 96,678,571 | 18.79% | | Beijing Pharmaceutical Investment Management (BVI) Co., Ltd. | Beneficial interest | 51,458,400 | 10.00% | | China Resources Pharmaceutical Group Limited | Interest in controlled corporation | 148,136,971 | 28.79% | | China Resources Co., Ltd. | Interest in controlled corporation | 148,136,971 | 28.79% | | Jiaze Global Capital Limited | Beneficial interest (convertible instrument) | 68,493,150 | 13.31% | - Of the shares held by Tan Zheng Ltd, 19,285,714 shares are pledged to Tasly under a subscription agreement[69] - Jiaze Global Capital Limited holds convertible bonds, and assuming full conversion, its approximate shareholding would be 13.31%[70] Share Option Schemes The company has a Pre-IPO Share Option Scheme and a Post-IPO Share Option Scheme; as at June 30, 2025, 35,930,000 share options remained unexercised under the Pre-IPO scheme, granted to Tan Zheng, Wang Yu, and employees, with an exercise price of HKD 5.5; no share options were granted under the Post-IPO scheme - As at June 30, 2025, 35,930,000 share options remained unexercised under the Pre-IPO Share Option Scheme[75][77] Pre-IPO Share Option Details (As at June 30, 2025) | Grantee Name | Date of Grant | Exercise Price | Number of Unexercised Share Options | | :--- | :--- | :--- | :--- | | Tan Zheng | December 31, 2019 | HKD 5.5 | 5,000,000 | | Wang Yu | December 31, 2019 | HKD 5.5 | 23,450,000 | | Employees (Total) | December 31, 2019 | HKD 5.5 | 7,480,000 | | Total | - | - | 35,930,000 | - The Post-IPO Share Option Scheme became effective from its adoption date for a maximum period of 10 years, but no share options were granted, exercised, cancelled, or lapsed from the listing date to the date of this interim report[79][81] Compliance with Corporate Governance Code The Group is committed to maintaining high standards of corporate governance and confirms its compliance with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The company has complied with all applicable code provisions of the Corporate Governance Code throughout the six months ended June 30, 2025[82] Compliance with Model Code for Securities Transactions The company has adopted the Model Code as set out in Appendix C3 of the Listing Rules and confirms that all Directors have complied with it during the reporting period - The company has adopted the Model Code as set out in Appendix C3 of the Listing Rules to regulate all dealings in the company's securities by Directors and relevant employees[83] - All Directors have confirmed their compliance with the applicable standards set out in the Model Code for the six months ended June 30, 2025[83] Directors' Interests in Contracts During the reporting period and up to the date of this interim report, no Director had any direct or indirect material interest in any contract entered into by the company, its subsidiaries, or fellow subsidiaries that was significant to the Group's business - No Director had any direct or indirect material interest in any contract entered into by the company, its subsidiaries, or fellow subsidiaries that was significant to the Group's business[84] Purchase, Sale and Redemption of the Company's Listed Securities As at June 30, 2025, the company held no treasury shares, and neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares - As at June 30, 2025, the company held no treasury shares[85] - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares[86] Audit Committee and Review of Financial Report The Audit Committee, comprising three members, has reviewed the company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, confirming compliance with applicable accounting principles; the interim results have been reviewed by the auditor in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee comprises two Independent Non-executive Directors (Mr. Ng Chi Kit as Chairman, Professor Wang Yingdian) and one Non-executive Director (Ms. Yu Xiaohui)[87] - The Audit Committee has reviewed the company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements[87] - The interim results have been reviewed by the auditor in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[87] Changes in Directors During the reporting period, several changes occurred in the Board of Directors, including the appointment of Ms. Yu Xiaohui as a Non-executive Director, the resignation of Mr. Tao Ran, the resignation of Dr. Wang Yu as Executive Director, CEO, and CTO, and the appointments of Mr. Yang Xin, Mr. Liu Rui, and Mr. Zhang Guoguang as Non-executive or Independent Non-executive Directors - Ms. Yu Xiaohui was appointed as a Non-executive Director and a member of the Audit Committee, and Mr. Tao Ran resigned[89] - Dr. Wang Yu resigned as Executive Director, CEO, and CTO of the Group[89] - Mr. Yang Xin and Mr. Liu Rui were appointed as Non-executive Directors, and Mr. Zhang Guoguang was appointed as an Independent Non-executive Director[89] Directors' Rights to Acquire Shares or Debentures Save for the Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme, no arrangements were entered into by the company or its subsidiaries during or at the end of the reporting period that would enable Directors to benefit from acquiring shares or debentures of the company or any other body corporate - Save for the share option schemes, no arrangements were entered into by the company or its subsidiaries that would enable Directors to benefit from acquiring shares or debentures of the company or any other body corporate[91] Publication of Interim Results and 2025 Interim Report on HKEX and Company Websites The company has published its interim results announcement on the HKEX website and its own website, and will timely publish the 2025 Interim Report, encouraging shareholders to view it electronically for environmental support - The interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.eaal.net)[92](index=92&type=chunk) - The company encourages shareholders to view corporate communications via the HKEX and company websites instead of receiving printed copies[93] Events After Reporting Period Save as disclosed, to the best of the company's knowledge, no significant events affecting the Group occurred after the end of the reporting period and up to the date of this interim report - Save as disclosed, no significant events affecting the Group occurred after the end of the reporting period and up to the date of this interim report[94] Review Report on Condensed Consolidated Financial Statements This section presents the auditor's review report, which includes a disclaimer of conclusion due to significant uncertainties regarding the Group's going concern ability Basis for Disclaimer of Conclusion The auditor is unable to express a conclusion due to significant doubts about the Group's ability to continue as a going concern, as it recorded a loss of RMB 129.03 million, net cash outflow from operating activities of RMB 45.17 million, net current liabilities of RMB 455.78 million, and net liabilities of RMB 145.49 million for the six months ended June 30, 2025; despite management's plans to improve liquidity, the auditor could not obtain sufficient appropriate evidence to assess the likelihood of these plans' success - The Group incurred a loss of RMB 129,032,000 and a net cash outflow from operating activities of RMB 45,169,000 for the six months ended June 30, 2025[96] - As at June 30, 2025, the Group had net current liabilities of RMB 455,776,000, net liabilities of RMB 145,485,000, and bank balances and cash of RMB 21,053,000, raising significant doubts about its ability to continue as a going concern[96] - Management has developed several plans and measures to improve liquidity, including equity financing, convertible bond extension, additional financial support from shareholders, managing payment schedules, bank borrowings, and government subsidies[97] - The auditor was unable to obtain sufficient appropriate evidence to assess the significant assumptions and estimates related to management's cash flow forecasts and the likelihood of success of the Group's plans and measures, thus disclaiming a conclusion on the condensed consolidated financial statements[98][100] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement details the Group's financial performance, including revenue, expenses, and total comprehensive loss for the six months ended June 30, 2025 For the Six Months Ended June 30, 2025 The Group recorded a loss of RMB 129.03 million for the six months ended June 30, 2025, an increase of 39.4% compared to the RMB 92.56 million loss in the prior year; other income grew by 99.8%, but net other gains and losses shifted from a gain to a loss, which was the primary reason for the expanded loss Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Other income | 13,036 | 6,526 | | Net other gains and losses | (51,045) | 19,836 | | Administrative expenses | (19,643) | (23,048) | | Research and development expenses | (67,449) | (91,118) | | Finance costs | (3,350) | (3,851) | | Other expenses | (579) | (901) | | Loss before tax | (129,030) | (92,556) | | Income tax expense | (2) | – | | Loss and total comprehensive expenses for the period | (129,032) | (92,556) | | Loss attributable to owners of the Company | (129,103) | (92,515) | | Basic and diluted loss per share (RMB) | (0.25) | (0.18) | Condensed Consolidated Statement of Financial Position This statement presents the Group's assets, liabilities, and equity as at June 30, 2025, reflecting its financial health at the period end As at June 30, 2025 As at June 30, 2025, the Group's current assets significantly decreased by 53.4% to RMB 40.76 million, while current liabilities increased by 15.4% to RMB 496.54 million, leading to an expanded net current liabilities of RMB 455.78 million; net liabilities surged from RMB 16.45 million as at December 31, 2024, to RMB 145.49 million, indicating a deteriorating financial position Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 448,136 | 476,548 | | Current assets | 40,763 | 87,494 | | Current liabilities | 496,539 | 430,206 | | Net current liabilities | (455,776) | (342,712) | | Non-current liabilities | 137,845 | 150,289 | | Net liabilities | (145,485) | (16,453) | | Total deficit | (145,485) | (16,453) | - Current assets significantly decreased by 53.4%, primarily due to financial assets at fair value through profit or loss decreasing from RMB 10.54 million to zero, and a reduction in bank balances and cash[6][103] - Net liabilities surged from RMB 16.45 million as at December 31, 2024, to RMB 145.49 million as at June 30, 2025[6][104] Condensed Consolidated Statement of Changes in Equity This statement outlines the changes in the Group's equity attributable to owners and non-controlling interests for the six months ended June 30, 2025 For the Six Months Ended June 30, 2025 The Group's statement of changes in equity for the six months ended June 30, 2025, shows that the accumulated loss attributable to owners of the Company increased from RMB 1,807.06 million as at January 1, 2025, to RMB 1,936.16 million, leading to an expanded total deficit attributable to owners of RMB 142.40 million Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Indicator | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Share capital | 3,576 | 3,576 | | Share premium | 1,402,498 | 1,402,498 | | Capital reserve | 180,349 | 180,349 | | Statutory surplus reserve | 2,001 | 2,001 | | Share option reserve | 205,339 | 205,339 | | Accumulated losses | (1,936,162) | (1,807,059) | | Subtotal attributable to owners of the Company | (142,399) | (13,296) | | Non-controlling interests | (3,086) | (3,157) | | Total equity/deficit | (145,485) | (16,453) | - The loss and total comprehensive expenses for the period attributable to owners of the Company amounted to RMB 129,103 thousand[105] Condensed Consolidated Statement of Cash Flows This statement summarizes the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 For the Six Months Ended June 30, 2025 For the six months ended June 30, 2025, the Group's net cash used in operating activities was RMB 45.17 million, net cash from investing activities was RMB 7.31 million, and net cash from financing activities was RMB 11.96 million; the net decrease in cash and cash equivalents for the period was RMB 25.90 million, with an ending balance of RMB 21.05 million Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (45,169) | (79,516) | | Net cash from investing activities | 7,314 | 117,669 | | Net cash from (used in) financing activities | 11,959 | (10,677) | | Net (decrease) increase in cash and cash equivalents | (25,896) | 27,476 | | Cash and cash equivalents at January 1 | 46,957 | 52,161 | | Cash and cash equivalents at June 30 | 21,053 | 79,645 | - Net cash used in operating activities improved compared to RMB 79.52 million in the prior year, but remained negative[107] - Net cash from investing activities significantly decreased, mainly due to lower proceeds from the disposal/redemption of financial assets at fair value through profit or loss, and government grant income in the prior year[107] - Financing activities shifted from a net cash outflow in the prior year to a net inflow, primarily benefiting from new other borrowings of RMB 20.00 million[107] Notes to the Condensed Consolidated Financial Statements These notes provide detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements, including accounting policies and significant events General Information The company was incorporated in the Cayman Islands, with its ordinary shares listed on the Main Board of the Stock Exchange; its principal business is investment holding, and its subsidiaries are primarily engaged in the R&D, manufacturing, and commercialization of cell immunotherapy products in China; the condensed consolidated financial statements are presented in RMB - The company was incorporated in the Cayman Islands on April 11, 2018, and its ordinary shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since July 10, 2020[108] - Its principal business is investment holding, and its subsidiaries are primarily engaged in the research and development, manufacturing, and commercialization of cell immunotherapy products for cancer treatment in China[108] - The condensed consolidated financial statements are presented in RMB[109] Basis of Preparation The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34, but the auditor has significant doubts about the Group's ability to continue as a going concern due to recorded losses, net cash outflows from operations, and net liabilities; despite management's plans to improve liquidity, including equity financing and convertible bond extensions, the success of these plans involves significant uncertainty - The Group's condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[110] - The Group incurred a loss of RMB 129,032,000 and a net cash outflow from operating activities of RMB 45,169,000 for the six months ended June 30, 2025, and had net current liabilities of RMB 455,776,000, net liabilities of RMB 145,485,000, and bank balances and cash of RMB 21,053,000, raising significant doubts about its ability to continue as a going concern[111] - The Group has developed several plans and measures aimed at improving liquidity and cash flow, including equity financing, convertible bond extensions, additional financial support from shareholders, managing payment schedules for construction contractors and suppliers, obtaining bank borrowings, and government subsidies[112][114][115] Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value; the amendments to International Financial Reporting Standards (IAS 21 amendments) were first applied in this interim period but had no significant impact on the financial position and performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value as at the end of the reporting period[117] - The amendments to IAS 21 "Lack of Exchangeability" were first applied in this interim period but had no significant impact on the Group's financial position and performance[118] Segment Information The Group has only one operating and reportable segment and recorded no revenue; all non-current assets are located in China, thus no geographical information analysis is presented - The Group has only one operating and reportable segment, and no further analysis of this single segment is presented[119] - The Group recorded no revenue for the six months ended June 30, 2025[120] - All of the Group's non-current assets are located in China, so no geographical information analysis is presented[120] Other Income The Group's other income increased by 99.8% from approximately RMB 6.5 million in the prior year to approximately RMB 13.0 million in the current period, primarily due to increased government grants for subscription funds incentives Other Income Components (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Income from providing cell cryopreservation services | 365 | 355 | | Income from providing technical services | 610 | 832 | | Interest income from bank balances and deposits | 283 | 381 | | Government grants - subscription funds incentives | 6,770 | – | | Government grants - machinery | 4,691 | 4,128 | | Government grants - R&D activities | 46 | 428 | | Total | 13,036 | 6,526 | - Government grants for subscription funds incentives increased from zero in 2024 to RMB 6.77 million in 2025, being the main driver of other income growth[121] Net Other Gains and Losses The Group recorded a net other loss of approximately RMB 51.0 million for the six months ended June 30, 2025, compared to a net gain of approximately RMB 19.8 million in the prior year; the shift from gain to loss was primarily due to fair value losses on other financial liabilities and the absence of fair value gains on financial assets at fair value through profit or loss Net Other Gains and Losses Components (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value gains on financial assets at fair value through profit or loss | 65 | 3,323 | | Fair value (losses) gains on other financial liabilities | (50,493) | 41,048 | | Loss on termination of an intangible asset | – | (19,316) | | Impairment loss on prepayments to a supplier | – | (5,183) | | Total | (51,045) | 19,836 | - The fair value of other financial liabilities shifted from a gain of RMB 41.05 million in 2024 to a loss of RMB 50.49 million in 2025[122] - In the prior year, a loss on termination of an intangible asset of RMB 19.32 million and an impairment loss on prepayments of RMB 5.18 million were recorded[122] Income Tax Expense The Group's Chinese subsidiaries, Beijing Yongtai and Yongtai Ruike, enjoy a 15% preferential corporate income tax rate due to their high-tech enterprise status; Hong Kong subsidiaries have no taxable profits and are exempt from profits tax; deferred tax assets are not recognized for unused tax losses due to the unpredictability of future profit streams - Current China corporate income tax for the six months ended June 30, 2025, was RMB 2 thousand[123] - Beijing Yongtai and Yongtai Ruike, as high-tech enterprises, enjoy a 15% reduced corporate income tax rate[124] - The Group's estimated unused tax losses are approximately RMB 2,051,015,000, but no deferred tax assets have been recognized due to the unpredictability of future profit streams[125] Loss for the Period This section lists the main expense items contributing to the loss for the period, including staff costs, depreciation of property, plant and equipment, amortization of intangible assets, material costs for R&D projects, and subcontracting costs; both staff costs and R&D-related costs decreased Major Components of Loss for the Period (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Total staff costs | 25,996 | 36,641 | | Depreciation of property, plant and equipment | 27,509 | 28,938 | | Amortisation of intangible assets | 1,273 | 1,311 | | Raw materials and other consumables costs included in R&D expenses | 2,925 | 9,829 | | Subcontracting costs included in R&D expenses | 15,430 | 25,664 | - Total staff costs decreased by approximately 29.1% to RMB 26.0 million[126] - Material costs and subcontracting costs for R&D projects both significantly decreased[126] Dividends No dividends were paid, declared, or proposed during this period; the Directors have decided not to pay any dividend for the interim period - No dividends were paid, declared, or proposed during this period[127] Loss Per Share For the six months ended June 30, 2025, both basic and diluted loss per share attributable to owners of the Company were RMB 0.25, an increase from RMB 0.18 in the prior year; share options and unexercised convertible bonds were not included in the calculation of diluted loss per share as their inclusion would result in a decrease in loss per share Loss Per Share (For the Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic loss per share | (0.25) | (0.18) | | Diluted loss per share | (0.25) | (0.18) | - For the purpose of calculating diluted loss per share, share options granted under the Pre-IPO Share Option Scheme and the conversion of unexercised convertible bonds were not included, as their inclusion would result in a decrease in loss per share[128] Prepayments, Deposits and Other Receivables The Group's total prepayments, deposits, and other receivables decreased from RMB 23.71 million as at December 31, 2024, to RMB 19.06 million as at June 30, 2025, primarily due to a reduction in prepayments to suppliers and service providers and recoverable VAT Components of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments to suppliers and service providers | 8,782 | 13,411 | | Recoverable value-added tax | 2,958 | 3,939 | | Prepayments for purchase of property, plant and equipment | 1,035 | 1,029 | | Advances to employees | 1,539 | 706 | | Lease deposits | 3,474 | 3,375 | | Other deposits | 1,126 | 1,140 | | Total | 19,060 | 23,708 | - Prepayments to suppliers and service providers decreased by approximately 34.5% to RMB 8.78 million[129] - Recoverable value-added tax decreased by approximately 24.9% to RMB 2.96 million[129] Financial Assets at Fair Value Through Profit or Loss The Group's total financial assets at fair value through profit or loss decreased from RMB 10.54 million as at December 31, 2024, to zero as at June 30, 2025; this was primarily due to the cessation of investments in certificates of deposit and the fair value of investments in Tasly Fund and Shaoxing Fund being assessed as zero Components of Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Investment in Tasly Fund | – | – | | Investment in Shaoxing Fund | – | – | | Investment in certificates of deposit | – | 10,536 | | Total | – | 10,536 | - Investments in certificates of deposit are no longer held, leading to a reduction of this asset class from RMB 10.54 million to zero[130] - The fair value of the investment in Tasly Fund is close to zero because Target A has ceased clinical research; the fair value of the investment in Shaoxing Fund is zero because the remaining principal of the convertible bond is overdue[131][134] Trade and Other Payables The Group's total trade and other payables decreased from RMB 131.93 million as at December 31, 2024, to RMB 126.21 million as at June 30, 2025; trade payables increased, while payables for property, plant and equipment decreased; the aging analysis of trade payables shows an increase in debts over 2 years Components of Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 40,354 | 33,609 | | Payables for purchase of property, plant and equipment | 66,383 | 74,932 | | Accrued salaries and other allowances | 4,175 | 8,797 | | Payables for purchase of intangible assets | 1,995 | 1,947 | | Payables for service expenses | 12,824 | 12,207 | | Total | 126,205 | 131,925 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 14,467 | 16,855 | | 1 to 2 years | 11,235 | 11,674 | | 2 to 3 years | 9,921 | 5,080 | | Over 3 years | 4,731 | – | | Total | 40,354 | 33,609 | - Trade payables increased by approximately 20.1% to RMB 40.35 million[132] - Trade payables over 3 years increased from zero as at December 31, 2024, to RMB 4.73 million as at June 30, 2025[135] Deferred Government Grants The Group's total deferred government grants decreased from RMB 60.51 million as at January 1, 2025, to RMB 55.77 million as at June 30, 2025, primarily due to the release of deferred government grants related to machinery and R&D activities Changes in Deferred Government Grants | Item | Machinery (RMB thousands) | R&D Activities (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | As at January 1, 2025 (audited) | 60,461 | 46 | 60,507 | | Release of deferred government grants | (4,691) | (46) | (4,737) | | As at June 30, 2025 (unaudited) | 55,770 | – | 55,770 | - Total deferred government grants released during the period amounted to RMB 4.74 million, of which RMB 4.69 million was related to machinery and RMB 46 thousand to R&D activities[137] Other Financial Liabilities The Group's other financial liabilities primarily consist of convertible bonds, whose fair value increased from RMB 268.10 million as at December 31, 2024, to RMB 318.59 million as at June 30, 2025, mainly due to fair value changes; the bonds have a principal of RMB 300 million and an annual interest rate of 6%, and were transferred to an independent investor on July 15, 2025 Other Financial Liabilities (Convertible Bonds) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Convertible bonds | 318,590 | 268,097 | - The convertible bonds have a principal of RMB 300 million, an annual interest rate of 6%, mature within 3 years from the issue date, and an initial conversion price of RMB 4.38 per share[139] - The change in fair value of the convertible bonds resulted in an increase of RMB 50.49 million[140] - The convertible bonds were transferred to an independent investor on July 15, 2025[142] Other Borrowings The Group incurred new other borrowings of RMB 20.04 million during the period, from Ms. Wei, a family member of Mr. Tan Zheng, and Tasly Great Health Industry Investment Group Co., Ltd., an indirect shareholder of Tasly; these loans bear interest at an annual rate of 4.5% and are due one year from their respective receipt dates or the completion date of equity financing, whichever is earlier Components of Other Borrowings | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Tasly Great Health Industry Investment Group Co., Ltd. | 10,019 | – | | Ms. Wei Anping | 10,019 | – | | Total | 20,038 | – | - The Group borrowed RMB 10 million from Ms. Wei, a family member of Mr. Tan Zheng, on June 9, 2025, and RMB 10 million from Tasly Great Health Industry Investment Group Co., Ltd., an indirect shareholder of Tasly, on June 20, 2025[143] - These loans bear interest at an annual rate of 4.5% and are due one year from their respective receipt dates or the completion date of equity financing, whichever is earlier[143] Share-based Payment Transactions The company has a Pre-IPO Share Option Scheme designed to encourage participants to contribute to the Group's long-term interests; as at June 30, 2025, a total of 35,930,000 share options were exercisable, granted to senior management and employees, with an exercise price of 50% of the offer price - The company's Pre-IPO Share Option Scheme was approved to encourage participants to contribute to the Group's long-term interests[144] - On December 31, 2019, the company granted 37,500,000 share options to 7 senior management and 25 eligible employees, with an exercise price of 50% of the offer price[144][145] - As at June 30, 2025, 35,930,000 share options were exercisable[146] Capital Commitments As at June 30, 2025, the Group had capital expenditures contracted but not yet provided for in the condensed consolidated financial statements, totaling RMB 32.21 million, primarily for the acquisition of machinery, leased land, leasehold improvements, and construction projects Capital Commitments | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Capital expenditures contracted but not yet provided for in the condensed consolidated financial statements | 32,214 | 35,642 | - Capital expenditures are primarily for the acquisition of machinery, leased land, leasehold improvements, and construction projects[147] Fair Value Measurement of Financial Instruments Some of the Group's financial instruments are measured at fair value, with convertible bonds classified as Level 3 fair value measurements; their valuation uses a binomial model, with key inputs including volatility and discount rate; sensitivity analysis of these inputs shows that fair value is more sensitive to changes in volatility Fair Value Measurement of Financial Instruments (As at June 30, 2025) | Item | Fair Value (RMB thousands) | Fair Value Level | | :--- | :--- | :--- | | Investment in certificates of deposit | – | Level 2 | | Convertible bonds | 318,590 | Level 3 | - The valuation of convertible bonds uses a binomial model, with key valuation assumptions including a bond maturity of 0.64 years, volatility of 97.27%, company share price of RMB 2.56, risk-free rate of 1.34%, and the company's discount rate of 43.91%[141] - Sensitivity analysis shows that a 5.00% increase or decrease in volatility would lead to an increase of RMB 52.13 million or a decrease of RMB 47.95 million in the fair value of convertible bonds, while a 1.00% change in the discount rate would impact by approximately RMB 0.1 million[150] Related Party Transactions The Group engaged in several related party transactions, including key management personnel remuneration, share collateral provided by related parties for convertible bonds, and new borrowings from related parties - Related parties include Tasly Great Health Industry Investment Group Co., Ltd., Mr. Tan Zheng, and Ms. Wei Anping[151] Key Management Personnel Remuneration (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries and other allowances | 3,227 | 4,669 | | Retirement benefits | 70 | 101 | | Total | 3,297 | 4,770 | - Mr. Tan Zheng and his close family members provided collateral for the convertible bonds, including 19,286 thousand ordinary shares of the company held by Tan Zheng LTD (fair value RMB 49,422 thousand) and 6,714 thousand ordinary shares of the company held by Tan Yueyue LTD (fair value RMB 17,205 thousand)[153] - New other borrowings of RMB 20.04 million were received from Tasly Great Health Industry Investment Group Co., Ltd. and Ms. Wei Anping, respectively[154] Definitions and Glossary of Technical Terms This section provides clear definitions for key terms and technical vocabulary used throughout the interim report Glossary of Terms This section provides definitions for key terms and technical vocabulary used in the interim report to ensure a clear understanding of the content for readers - Definitions are provided for biomedical and financial terms such as "6B11", "CAR-T cells", "EAL®", "GMP", "NDA", and "TCR"[155][156][157][158]