Revenue Performance - For the nine months ended September 30, 2023, the revenue from the sales of biological reagents and auxiliary reproductive supplies and equipment increased by approximately RMB 545,000, or 3.2%[16]. - The Group's revenue decreased by approximately RMB 977,000, or approximately 5.2%, from approximately RMB 18.8 million to approximately RMB 17.8 million during the Reporting Period[30]. - Sales of male fertility IVD reagents products accounted for approximately 79.5% of total revenue, generating approximately RMB 14.1 million, an increase of approximately RMB 636,000 or approximately 4.7% from the Corresponding Period[31]. - Revenue from healthcare products and supplements significantly decreased by approximately RMB 1.5 million or approximately 96.0%, down to approximately RMB 63,000 during the Reporting Period[32]. - Revenue for the three months ended September 30, 2023, was RMB 6,309,000, a decrease of 9.3% compared to RMB 6,954,000 for the same period in 2022[148]. - For the nine months ended September 30, 2023, total revenue was RMB 17,774,000, a decrease of 5.2% compared to RMB 18,751,000 for the same period in 2022[167]. - Revenue from sales of healthcare products and supplements was RMB 63,000, a significant decrease from RMB 1,585,000 in the same period last year[167]. - The Group's revenue from distributors was RMB 9,160,000, down 3.5% from RMB 9,487,000 in the prior year[167]. - Revenue from non-distributors decreased to RMB 8,614,000, compared to RMB 9,264,000 in the previous year, reflecting a decline of 7.0%[167]. Financial Performance - The Group recorded a gross profit of approximately RMB 11.7 million, representing a decrease of approximately RMB 1.0 million or approximately 8.2% from the Corresponding Period[36]. - The net loss attributable to the owners of the Company for the three months ended September 30, 2023, was RMB 1,042,000, compared to a profit of RMB 386,000 in the same period of 2022[148]. - Total comprehensive expense for the nine months ended September 30, 2023, was RMB 2,906,000, compared to RMB 1,085,000 for the same period in 2022[149]. - Loss before taxation for the nine months ended September 30, 2023, was RMB 2,494,000, compared to a loss of RMB 150,000 in the same period of 2022[189]. - The total equity of the Company as of September 30, 2023, was RMB 54,085,000, a decrease from RMB 58,925,000 as of September 30, 2022[149]. - The Company reported an exchange difference on consolidation of RMB (409,000) for the nine months ended September 30, 2023, compared to RMB (530,000) in the same period of 2022[149]. - The Company did not have any customers accounting for 10% or more of total revenue during the nine months ended September 30, 2023[182]. Research and Development - Research and development expenses increased by approximately RMB 447,000 or approximately 22.6%, from approximately RMB 2.0 million to approximately RMB 2.4 million during the Reporting Period[46]. - Research and development expenses for the nine months ended September 30, 2023, increased to RMB 2,425,000 from RMB 1,978,000 in the same period of 2022, reflecting a growth of 22.6%[148]. - The Group plans to utilize the AFE IP for research and development related to liver protection and commercializing AFE healthcare products[24]. - Future strategic priorities include continuing research on diagnostic testing and seeking partnerships to strengthen the supplements business[26]. Share Capital and Options - The company granted a total of 26,008,000 share options at an exercise price of HK$0.125 per share on 9 April 2020, with the options exercisable until 8 April 2030[58]. - As of 30 September 2023, a total of 19,504,000 share options remained outstanding after 4,000,000 options were exercised during the period[63]. - The company's issued share capital as of 30 September 2023 was approximately HK$4.2 million, with 418,472,000 shares issued at HK$0.01 each[70]. - The fair value of the share options was calculated using a closing share price of HK$0.123 before the grant date, with an expected volatility of 103.1% and a risk-free interest rate of 0.778%[67]. - No share options were granted, exercised, forfeited, cancelled, or lapsed during the nine months ended 30 September 2023, except for the previously mentioned exercise[64]. Corporate Governance - The Company has adopted the Corporate Governance Code and complied with it during the Reporting Period[132]. - The Board is committed to high corporate governance standards to safeguard shareholder interests and enhance corporate value[131]. - The Audit Committee consists of four independent non-executive Directors, ensuring oversight of financial reporting and internal controls[141]. - The Audit Committee has reviewed the unaudited condensed consolidated financial results and confirmed compliance with applicable accounting standards and GEM Listing Rules[143]. - The Company has established an effective internal control system and conducted reviews to ensure its adequacy[133]. - No incidents of non-compliance with the Required Standard by relevant employees were noted during the Relevant Period[138]. Taxation - The PRC Enterprise Income Tax rate for the Group's subsidiary, Shenzhen Huakang, is 15% due to its status as a "New and High Technology Enterprise," with the latest approval obtained in December 2020, valid until 31 December 2023[192]. - The Group had no assessable profit arising from Hong Kong for the nine months ended 30 September 2023 and 2022, thus no provision for Hong Kong Profits Tax was made[191]. - The Company reported a current tax expense of RMB (53,000) for the three months ended 30 September 2023, compared to RMB 246,000 for the same period in 2022[190]. - The current year tax expense for the nine months ended 30 September 2023 was RMB 3,000, compared to RMB 405,000 for the same period in 2022[190]. - The Company and its subsidiaries incorporated in the BVI are tax-exempt[192]. Investments and Assets - On 19 December 2022, Shenzhen Huakang agreed to purchase a 19% equity interest in Hainan Jinnuosai for a cash consideration of RMB1.9 million[76]. - As of September 30, 2023, the transaction for the 19% equity interest has not been completed, with the deadline extended to December 31, 2023[83][84]. - As of September 30, 2023, the Group did not hold any significant investments[85][90]. - The Group did not pledge any significant assets as of September 30, 2023, compared to a motor vehicle pledged for lease liabilities valued at approximately RMB 217,000 as of December 31, 2022[86][91]. - There were no capital commitments for the acquisition of property, plant, and equipment as of September 30, 2023[87][92]. - The Group reported no significant contingent liabilities as of September 30, 2023[88][93]. Directors and Shareholding - The interests of the Directors and chief executive as of September 30, 2023, include Mr. Zhang Shuguang holding 57.8% of the total shares[104][107]. - Crystal Grant Limited holds 238,056,000 shares and 4,000,000 share options, representing a total interest of 242,056,000 shares, which is 57.8% of the total shareholding[117]. - Mr. Zhang Shuguang is deemed to be interested in 144,032,000 shares held by Crystal Grant Limited[120]. - Ever Charming Inc. holds 94,024,000 shares, also contributing to the total interest of 242,056,000 shares[120]. - No directors or chief executives had any short positions in the shares as of September 30, 2023[111]. - The interests stated by all parties are long positions[120]. - The company has confirmed that Mr. Zhang Shuguang and Mr. Chang Yim Yang are acting in concert regarding their shareholdings[120]. - The share options granted to Mr. Zhang Shuguang on April 9, 2020, total 4,000,000[120]. - The aggregate interest of Mr. Chang Yim Yang in the shares is also 242,056,000, reflecting the same percentage of 57.8%[117]. - The company maintains compliance with the Securities and Futures Ordinance regarding the disclosure of interests[111]. Miscellaneous - The company did not engage in any foreign currency hedging policy during the reporting period, monitoring foreign currency exposure closely[74]. - The company maintained a prudent treasury policy to manage cash balances and ensure strong liquidity for future growth opportunities[75]. - The Company has not engaged in any purchases, sales, or redemptions of its listed securities during the Reporting Period[123]. - There were no interests in competing businesses from the Directors or Controlling Shareholders during the Reporting Period[122]. - No significant events affecting the Company occurred between September 30, 2023, and the date of this report[96][99].
华康生物医学(08622) - 2023 Q3 - 季度财报