Financial Performance - The revenue from the pharmaceutical products business decreased by 34.15% to approximately RMB100.52 million in 2023, down from RMB152.65 million in 2022[13]. - Profit from the pharmaceutical products business fell to RMB19.82 million, representing a decrease of approximately 72.05% compared to RMB70.90 million in the corresponding period of 2022[13]. - Revenue from the finance leasing business was approximately RMB7.25 million, down from RMB14.82 million in 2022[17]. - For the year ended December 31, 2023, the Group generated total revenue of approximately RMB122.10 million, representing a decrease of approximately 30.59% compared to RMB175.92 million for the year ended December 31, 2022[46]. - Gross profit for the year ended December 31, 2023, amounted to approximately RMB35.19 million, with a gross profit margin of 28.82%, down from RMB91.68 million and 52.11% in 2022, respectively[53]. - Profit attributable to owners of the Company was approximately RMB18.63 million for the year ended December 31, 2023, representing a decrease of approximately 36.24% compared to RMB29.22 million in 2022[55]. Finance Leasing Business - The number of customers in the finance leasing business decreased from 21 as of December 31, 2022, to only 2 as of December 31, 2023[17]. - The Group did not enter into any new finance leasing contracts in the latter half of 2023 due to a more prudent evaluation approach[17]. - The Group's finance leasing services primarily target the medical, pharmaceutical, and public infrastructure industries[18]. - The Group's finance leasing business is not limited to any particular industry, allowing for potential expansion into other types of devices and equipment[18]. - The revenue generated from finance leasing business during the reporting period was approximately RMB 7.25 million, a decrease from RMB 14.82 million in 2022[20]. - As of December 31, 2023, the group had only two customers in the finance leasing business, down from 21 customers in 2022[20]. - The weighted average term of outstanding finance leases was 1.6 years, compared to 1.4 years in 2022, with all leases requiring repayment by installments[32]. - The Group will continue to adopt a prudent approach in evaluating and granting new finance leasing loans in 2024 due to uncertainties in economic growth and market volatility[44]. - The Group has not entered into any new finance leasing agreements during the reporting period[31]. Cost Management and Challenges - A significant increase in the general cost and a shortage of traditional Chinese herbal materials adversely affected the gross profit margin and sales volume of the pharmaceutical products[10]. - The group expects to face challenges in business performance due to the slower-than-expected economic recovery in China[36]. - The company will rigorously implement cost control measures and maintain a flexible approach to strengthen its revenue base[36]. - The Group plans to expand its sales networks to enhance market penetration despite challenges from rising costs of traditional Chinese herbal materials affecting gross profit margins[42]. Corporate Governance and Board Diversity - The Company aims to achieve board diversity by appointing at least one female Board member by the end of 2024[135]. - The Board has adopted a Board Diversity Policy to enhance strategic objectives and support sustainable development[132]. - The Company has complied with Listing Rules requiring at least three independent non-executive Directors with appropriate qualifications[126]. - The Board reviewed and monitored the training and continuous professional development of Directors and senior management[124]. - The Company has established measurable goals for Board diversity, focusing on age, professional qualification, term of service, and independence[134]. - The Board believes there is sufficient check and balance with three independent non-executive Directors[125]. - The Company actively seeks the opinions of independent non-executive Directors even if they cannot attend meetings in person[120]. - The company adopted a board diversity policy in August 2013 to enhance its strategic goals and sustainable development[136]. - The company considers various factors for board diversity, including age, gender, cultural background, and professional experience[136]. - The company will review its board diversity policy periodically to ensure its effectiveness and progress towards achieving set goals[136]. Audit and Risk Management - The Audit Committee held three meetings during the year and reviewed the effectiveness of the company's internal audit function[156]. - The Audit Committee is responsible for overseeing the company's financial reporting system, financial statements, risk management, and internal control procedures[155]. - The Company conducted an annual risk assessment identifying strategic, operational, financial, and compliance risks across major business operations[191]. - The Audit Committee and the Board reviewed the effectiveness of the Group's risk management and internal control systems, concluding they were effective and adequate for the year ended December 31, 2023[194]. - An independent professional internal auditor firm was engaged to assist in evaluating the effectiveness of the Group's risk management and internal control systems for the year ended December 31, 2023[188]. - The Group has established risk management and internal control systems to manage business risks and provide reasonable assurance against material misstatements or losses[187]. Shareholder Communication and Dividend Policy - The Company maintains good communication with shareholders through various reports and encourages participation in general meetings[200]. - The Board does not recommend any final dividend for the year ended December 31, 2023, consistent with the previous year[95]. - The dividend policy emphasizes continuity, stability, and sustainability, with no assurance that a dividend will be proposed in any specific period[144].
三爱健康集团(01889) - 2023 - 年度财报