Investment Rating - The report does not specify a clear investment rating for 康哲药业 (0867.HK) [1] Core Views - 康哲药业's 2024 annual report shows that the company's revenue was 74.7 billion HKD, a decrease of 6.8% year-on-year, with pharmaceutical sales revenue at 86.2 billion HKD, down 9% [7] - The annual profit was 16.1 billion HKD, down 32.3%, but the performance met expectations [7] - Over 50% of the revenue came from exclusive products and innovative products, with significant growth in the dermatology/aesthetic and ophthalmology lines [7] - The company has made breakthroughs in innovative research and development, marking the beginning of a new era for innovative products [7] - 康哲药业 aims to establish a foothold in the Southeast Asian market through its new entity 康联达健康 and has acquired a manufacturing facility in Singapore [7] Financial Summary - Revenue projections for 康哲药业 from 2025 to 2027 are estimated at 83.1 billion HKD, 105.2 billion HKD, and 121.6 billion HKD respectively, with growth rates of 10.9%, 25.8%, and 15.1% [9][10] - The net profit attributable to the parent company is projected to be 1.63 billion HKD in 2025, 2.24 billion HKD in 2026, and 2.72 billion HKD in 2027, with growth rates of 0.85%, 37.43%, and 20.98% respectively [2][10] - The earnings per share (EPS) is expected to increase from 0.67 HKD in 2025 to 1.11 HKD in 2027 [2][10] - The company's price-to-earnings (P/E) ratio is projected to decrease from 12.60 in 2025 to 7.58 in 2027, indicating potential undervaluation [2][10] Business Segments - The cardiovascular segment is expected to see a revenue decline to 27.7 billion HKD in 2025, while the digestive and autoimmune segment is projected to grow to 33.1 billion HKD [10] - The ophthalmology segment is anticipated to grow significantly, reaching 8.8 billion HKD in 2025, while the dermatology and aesthetic segment is expected to grow to 9.8 billion HKD [10] - Other products are projected to maintain stable revenue around 3.8 billion HKD [10]

Investment Rating - The report maintains a "Buy" rating for 康哲药业 (0867.HK) [11] Core Views - 康哲药业's revenue for 2024 is projected at 74.69 billion HKD, a year-on-year decrease of 6.79%, while the net profit attributable to shareholders is expected to be 16.13 billion HKD, down 32.54% year-on-year [5] - The company is focusing on innovation and increasing sales promotion for new products, with R&D expenses rising by 69.1% to 330 million HKD, reflecting a commitment to enhancing its product pipeline [6] - Traditional business lines are stabilizing, with the ophthalmology and dermatology segments showing growth, indicating a shift towards new business opportunities [7] - The company is advancing its innovative drug pipeline, with multiple projects in clinical stages, including submissions for NDA applications in China [8] - 康哲药业 is expanding its overseas operations, particularly in Southeast Asia, aiming to establish a strong market presence [10] Financial Summary - For 2024, 康哲药业's revenue is expected to decline by 7%, followed by growth of 11% in 2025, 14% in 2026, and 17% in 2027 [13] - The net profit is projected to stabilize in 2025, with a slight increase in subsequent years, reflecting a recovery in profitability [13] - The gross margin is expected to remain relatively stable, with slight improvements anticipated in the coming years [13] - Key financial ratios indicate a healthy balance sheet, with a projected P/E ratio decreasing from 11.31 in 2024 to 9.15 by 2027, suggesting potential undervaluation [13]

Investment Rating - The report maintains a "Buy" rating for 康哲药业 (0867.HK) [11] Core Viewpoints - 康哲药业's revenue for 2024 is projected at 74.69 billion HKD, a year-on-year decrease of 6.79%, with a net profit of 16.13 billion HKD, down 32.54% year-on-year [5] - The company is increasing its investment in innovative research and development, with R&D expenses rising by 69.1% to 330 million HKD, reflecting a focus on new product launches and sales promotion [6] - Traditional business lines are stabilizing, with the ophthalmology and dermatology segments showing growth, while the cardiovascular and digestive disease lines have seen declines [7] - The company has a robust pipeline of innovative drugs, with over 10 projects in clinical progress in China, including submissions for NDA applications [8] - 康哲药业 is expanding its overseas operations in Southeast Asia, aiming to become a key player in the region's pharmaceutical market [10] Financial Summary - Revenue projections for 2025-2027 are 83.20 billion HKD, 94.54 billion HKD, and 110.43 billion HKD, with expected growth rates of 11%, 14%, and 17% respectively [11] - Net profit forecasts for the same period are 16.28 billion HKD, 18.95 billion HKD, and 22.55 billion HKD, with growth rates of 0%, 16%, and 19% respectively [11] - The gross margin is expected to stabilize around 73% to 74.5% over the next few years, indicating a recovery in profitability [13]

Key Points Summary of 康哲药业 Conference Call Company Overview - **Company**: 康哲药业 (Kangzhe Pharmaceutical) - **Year**: 2024 Industry and Market Context - **Impact of 集采政策 (Centralized Procurement Policy)**: - Major products like 不一定 and 优思弗 faced price reductions of 20% in the first half and 10% in the second half of 2024, leading to a 50% revenue drop for three centralized procurement drugs compared to their peak in 2022 [4][20] - Despite these challenges, the company expects to stabilize and recover to 50% profit levels by 2025 [20] Financial Performance - **Revenue Growth**: - Overall revenue increased by approximately 10% year-on-year in 2024, but operational profit decreased by around 1 billion due to centralized procurement impacts and increased promotional expenses for new products [3][6] - **R&D and Profit Margins**: - R&D expenditure was 888.8 million, accounting for 20% of revenue, with a decline in both EBITDA and net profit margins [6][36] - The company maintains a cash reserve of approximately 3.7 billion and a dividend payout ratio of 40% [6][31] Product Development and Innovation - **Current and Future Products**: - The company has seven exclusive products, with plans to launch 11 innovative products over the next three years, which currently account for 52.8% of total revenue [3][5][10] - Notable upcoming products include 芦可替尼乳膏 (Lukotini Cream) and 德西杜司他片 (Desidustat Tablets), targeting conditions like vitiligo and chronic kidney anemia [10][12] Strategic Initiatives - **Market Expansion**: - 康哲药业 is actively expanding into Southeast Asia through 康联达健康体系 (Kanglian Health System) and 法玛津工厂 (Pharmazine Factory), with expectations of significant revenue contributions starting in 2025 [16][17] - **Commercialization Efforts**: - The academic promotion team has grown to approximately 4,700 members, covering 300,000 retail terminals, enhancing the company's market presence [11] Challenges and Future Outlook - **Profitability Concerns**: - The company anticipates that while revenue will grow at double digits in 2025, profit margins may not keep pace due to ongoing R&D investments [36][44] - **Long-term Goals**: - 康哲药业 aims to achieve sales peaks by 2026 and profit highs by 2027, with a focus on maintaining a stable dividend policy despite the need for significant reinvestment [19][31][44] Additional Insights - **Supply Chain Management**: - The company is investing in supply chain stability, including transferring production to lower-cost regions to mitigate cost pressures from centralized procurement [26][42] - **Focus on Specialty Areas**: - 康哲药业 is concentrating on niche markets such as dermatology and cardiovascular treatments, with plans to develop innovative solutions in these areas [41][43] This summary encapsulates the key points discussed in the conference call, highlighting 康哲药业's current performance, strategic initiatives, and future outlook in the pharmaceutical industry.

Financial Performance - Revenue decreased by 6.8% to RMB 7,469.0 million, compared to RMB 8,013.3 million in 2023; pharmaceutical sales revenue decreased by 9.0% to RMB 8,621.6 million from RMB 9,472.2 million[4] - Gross profit declined by 11.2% to RMB 5,422.2 million, down from RMB 6,109.2 million in 2023; pharmaceutical sales gross profit decreased by 10.7% to RMB 5,405.4 million from RMB 6,053.7 million[4] - Annual profit fell by 32.3% to RMB 1,613.1 million, compared to RMB 2,384.4 million in 2023; normalized annual profit decreased by 36.7% to RMB 1,713.7 million from RMB 2,709.3 million[4] - Basic earnings per share decreased by 31.9% to RMB 0.6673, down from RMB 0.9792 in 2023[4] - Cash and cash equivalents as of December 31, 2024, amounted to RMB 3,706.5 million, with bank acceptance bills of RMB 198.8 million[4] - Proposed final dividend per share is RMB 0.1174, resulting in a total dividend of RMB 0.2681 per share for the year, a decrease of 31.6% from RMB 0.3917 in 2023[4] - Profit before tax for 2024 was RMB 2,010,307 thousand, a decline of 30.1% compared to RMB 2,873,771 thousand in 2023[14] - Net profit for the year was RMB 1,613,080 thousand, down 32.3% from RMB 2,384,430 thousand in the previous year[14] - Total annual profit attributable to the company's owners for 2024 was RMB 1,619,788 thousand, down 32.6% from RMB 2,400,940 thousand in 2023[40] Revenue Sources - Three national procurement products generated pharmaceutical sales revenue of RMB 2,691.0 million, a year-on-year decline of 28.8%[5] - Non-national procurement exclusive and innovative products generated pharmaceutical sales revenue of RMB 4,551.3 million, a year-on-year increase of 4.1%, accounting for 52.8% of total revenue[5] - Revenue from cardiovascular-related diseases was RMB 2,917.7 million, a decrease of 17.1% year-on-year, representing 47.4% of total pharmaceutical sales revenue[93] - Revenue from dermatology and aesthetic medicine increased by 18.2% year-on-year to RMB 672.6 million, accounting for 7.8% of total pharmaceutical sales revenue[93] Research and Development - Research and development expenses increased significantly to RMB 329,982 thousand, up 68.9% from RMB 195,134 thousand in 2023[14] - Five innovative drugs have entered the commercialization stage[6] - Over 10 clinical trials are progressing smoothly[9] - The company expanded its innovative product pipeline to approximately 40 items, with five innovative drugs approved for market in China[56] - The company is focused on a dual approach of collaborative and independent research and development to drive innovation[60] - The company is advancing approximately ten projects in clinical trials, focusing on registration-based randomized controlled trials (RCTs) to ensure continuous innovation[61] - The company has made progress in self-innovation with around twenty projects in development, including four innovative drugs entering clinical development in China[61] Market Strategy and Expansion - The company aims to enhance its commercialization system with a focus on specialty areas such as cardiovascular, central nervous system, digestive, dermatology, and ophthalmology[56] - The company is continuously improving its Southeast Asia business system to support international expansion[59] - The company is actively capturing market opportunities through cross-departmental collaboration and dynamic updates to its promotional strategies[88] - The group is focusing on expanding its outpatient market presence, enhancing coverage and service quality through training systems for retail pharmacies[89] - The group plans to deepen its international presence starting from Southeast Asia, building a comprehensive business system covering research, production, and sales[117] Financial Management - Cash generated from operating activities was RMB 1,268.5 million, a decrease of 49.3% compared to RMB 2,502.9 million in the previous year[138] - The group's cash and cash equivalents at year-end were RMB 3,706.5 million, down from RMB 4,311.1 million at the end of the previous year[135] - Financial expenses decreased to RMB 38,610 thousand in 2024 from RMB 46,251 thousand in 2023, a reduction of 16.5%[33] - The net cash used in financing activities for the reporting period was RMB 1,261.0 million, a decrease of 40.7% compared to RMB 2,125.0 million in 2023, primarily due to reduced dividend payments[140] - The group reported a debt of RMB 831.3 million in bank loans as of December 31, 2024, down from RMB 1,269.7 million in 2023, resulting in a decrease in the debt-to-asset ratio from 7.2% to 4.6%[145] Product Development and Launches - The company successfully launched a new innovative drug (Leflan) and an additional indication for an existing drug, enhancing its product offerings[59] - The innovative product Lai Fulan (Methylene Blue Enteric-Coated Sustained-Release Tablets) was approved in June 2024, significantly improving the detection rate of non-polyp colorectal lesions during colonoscopy[62] - Mei Tai Tong (Methotrexate Injection) was approved in March 2023 for severe psoriasis and received additional approval for rheumatoid arthritis in July 2024, demonstrating non-inferiority to oral Methotrexate[63][64] - The innovative oral drug Daxidustat for treating anemia in non-dialysis adult chronic kidney disease patients received NDA acceptance from NMPA in April 2024, with positive results from Phase III clinical trials showing improved hemoglobin levels compared to placebo[70] - Ruxolitinib cream, the first and only topical JAK inhibitor for vitiligo, received NDA acceptance from NMPA in September 2024, with real-world studies showing consistent efficacy and safety[71] Shareholder Returns and Dividends - The company declared a mid-year dividend of RMB 0.1507 per share for 2024, compared to RMB 0.3134 per share in 2023, reflecting a decrease of 52.0%[40] - The group paid dividends of RMB 364.2 million for the 2024 interim and RMB 192.0 million for the 2023 final, compared to RMB 768.5 million and RMB 591.9 million in the previous year, reflecting a significant reduction in dividend payouts[151] Governance and Compliance - The board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[164] - The company has adopted a written guideline for securities trading by directors, ensuring compliance with the standards set forth[160] - There have been no reported violations of the securities trading guidelines by employees during the reporting period[160]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 10.38, indicating a potential upside of 38.78% from the current price of HKD 7.48 [3][27][47]. Core Insights - The company has a robust pipeline of innovative drugs, with four new drugs recently included in the national medical insurance directory, expected to contribute approximately RMB 400-500 million in revenue in 2024 [2][6][39]. - The company is expanding its market presence in Southeast Asia, leveraging local talent and establishing a management center in Singapore to cater to the growing demand for pharmaceuticals in the region [44][46]. - The company has signed an exclusive commercialization agreement for a new drug, ABP-671, aimed at treating gout and hyperuricemia, which is currently undergoing clinical trials [26][37]. Financial Summary - The company reported a revenue of RMB 42.88 billion in the first half of 2024, a year-on-year decrease of 22.6%, but a quarter-on-quarter increase of 8.9% [30]. - The net profit for the same period was RMB 9.03 billion, reflecting a year-on-year decline of 52.8%, but a significant quarter-on-quarter increase of 92.8% [30]. - Revenue projections for 2024, 2025, and 2026 are estimated at RMB 79.25 billion, RMB 89.49 billion, and RMB 108.85 billion, respectively, with EPS expected to rise from RMB 0.71 in 2024 to RMB 1.01 in 2026 [13][38]. Product Pipeline - The company has a diverse pipeline with 30 innovative drugs, including CMS-D005, which has shown promising preclinical results for weight loss and safety [2][41]. - The company is also advancing the development of Lurconidine cream for vitiligo, with a significant market potential given the large patient population in China and Southeast Asia [9][10]. - The innovative drugs recently launched include a nasal spray for epilepsy, a monoclonal antibody for psoriasis, and a methotrexate injection for autoimmune diseases, showcasing the company's strong R&D capabilities [39][40].

Investment Rating - The report does not specify a clear investment rating for 康哲药业 (0867.HK) [1]. Core Insights - The company has shown signs of a performance turnaround, with a 8.9% quarter-on-quarter increase in drug sales revenue and a 92.8% increase in profit for the first half of 2024 [2][19]. - The successful NDA approval of Lucozine cream positions it as the first domestic drug for treating vitiligo, targeting a significant market of 14 million existing patients [2][11]. - The company is entering a harvest period in its innovation transformation, with five innovative drugs launched and over ten self-research projects progressing steadily [2][11]. Summary by Sections 1. Performance Turnaround - The impact of centralized procurement has largely dissipated, with a notable improvement in performance indicators. The first half of 2024 saw a drug sales revenue of 12.3 billion yuan from three national procurement products, reflecting a 49.2% decline, but the negative effects are expected to lessen moving forward [2][19]. - The company reported a revenue of 42.9 billion yuan in the first half of 2024, down 22.6% year-on-year, but with a quarter-on-quarter improvement in both revenue and profit [19]. 2. Innovation Pipeline - 康哲药业 has made significant strides in its innovation strategy, with over 30 innovative products, primarily First-in-Class (FIC) and Best-in-Class (BIC) drugs. Five innovative drugs have been launched, including Diazepam nasal spray and Treziq monoclonal antibody injection [2][11]. - The company has ten self-research projects in progress, with three innovative drugs entering clinical development [2][11]. 3. Market Potential - The Lucozine cream targets a large unmet clinical need in the vitiligo market, with 14 million patients in China. It is the only drug approved globally for this indication [2][11]. - The company’s product lines include cardiovascular, digestive, ophthalmology, and dermatology, with a strong market presence across over 55,000 hospitals and approximately 280,000 retail pharmacies in China [11][19]. 4. Financial Forecast - The company’s projected revenues for 2024, 2025, and 2026 are 78.9 billion yuan, 88.9 billion yuan, and 98 billion yuan, respectively [3][4].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 11.3, indicating a potential upside of 50.4% from the current price [2][3]. Core Insights - The company experienced a 6.1% quarter-on-quarter revenue growth in the first half of 2024, although year-on-year revenue decreased by 21.7% to RMB 3.61 billion [2]. - The sales of three national procurement products saw a significant decline of 49.2% year-on-year, while revenue from exclusive and innovative products reached RMB 2.41 billion, accounting for 56% of total revenue [2]. - The company is expected to see a gradual improvement in performance starting from the second half of 2024, driven by the commercialization of innovative products [2]. Financial Summary - Revenue for 2022 was RMB 9.15 billion, with a projected decline to RMB 8.01 billion in 2023 and further to RMB 7.60 billion in 2024, before recovering to RMB 8.75 billion in 2025 and RMB 9.83 billion in 2026 [4]. - The net profit attributable to shareholders is forecasted to decrease from RMB 3.26 billion in 2022 to RMB 2.40 billion in 2023, and further to RMB 1.75 billion in 2024, before increasing again in subsequent years [4]. - The company plans to launch 10-12 new drugs between 2025 and 2027, with a focus on innovative products that are expected to contribute significantly to revenue [2].

Investment Rating - The report assigns a "Buy" rating for the company [1]. Core Views - The company is undergoing a successful transformation from a traditional pharmaceutical agent to an innovative drug enterprise, with multiple products launched in recent years [1]. - The company has increased its focus on self-research and innovation, aiming to change its product structure and has successfully launched five innovative drugs since 2023 [1]. - The company maintains market advantages with its exclusive products despite pressures from centralized procurement policies [1]. - The emerging ophthalmology and dermatology businesses are gaining scale, and international operations in Southeast Asia are expanding [1]. Summary by Sections Company Overview - The company is transitioning from a single-agent operation to an innovative pharmaceutical company, managing the entire product lifecycle through various means such as equity investments and strategic partnerships [6][16]. - It has a diverse portfolio covering cardiovascular, digestive, ophthalmology, and dermatology fields, with over 30 innovative products in development [6][16]. Financial Performance - The company experienced a revenue decline of 12.4% in 2023, with a further 21.7% drop in the first half of 2024 due to the impact of centralized procurement [19]. - Revenue is projected to recover with expected growth rates of -4%, 18%, and 21% from 2024 to 2026, respectively [1][19]. - Net profit is forecasted to decline by 28% in 2024 but is expected to grow by 22% and 31% in the following years [1][19]. Product Pipeline and Market Position - The company has launched several innovative products, including the first subcutaneous methotrexate injection for psoriasis and a novel monoclonal antibody for psoriasis treatment [10][19]. - The company has established a strong academic promotion team and a wide distribution network, covering over 55,000 hospitals and more than 280,000 retail pharmacies in China [17]. - The company’s innovative product pipeline includes 30 products, with five already approved for the Chinese market and more in clinical trials [17][19].

Financial Performance - Revenue decreased by 21.7% year-on-year to RMB 3,611.1 million, with a 22.6% decline in pharmaceutical sales revenue to RMB 4,287.5 million[6]. - Gross profit fell by 25.2% year-on-year to RMB 2,696.5 million, with a 24.7% decline in gross profit from pharmaceutical sales to RMB 2,686.9 million[6]. - Net profit decreased by 52.8% year-on-year to RMB 903.4 million, but increased by 92.8% quarter-on-quarter[6]. - Basic earnings per share dropped by 52.3% year-on-year to RMB 0.3734, while increasing by 90.8% quarter-on-quarter[6]. - Total revenue for the first half of 2024 was RMB 3,611.1 million, a year-on-year decrease of 21.7% but a quarter-on-quarter increase of 6.1%[20]. - Period profit for the same period was RMB 903.4 million, down 52.8% year-on-year, but up 92.8% quarter-on-quarter[20]. - The group’s revenue for the reporting period decreased by 21.7% to RMB 3,611.1 million, down from RMB 4,610.1 million in the same period last year[85]. - The revenue from pharmaceutical sales alone fell by 22.6% to RMB 4,287.5 million, compared to RMB 5,536.6 million in the previous year, primarily due to the impact of national procurement on three drugs, resulting in a sales decline of RMB 1,196.9 million, or 49.2%[85]. - Gross profit decreased by 25.2% to RMB 2,696.5 million, down from RMB 3,605.9 million year-on-year, with a gross margin of 74.7%, a decline of 3.5 percentage points from 78.2% in the previous year[86]. - Period profit decreased by 52.8% year-on-year to RMB 903.4 million, down from RMB 1,916.0 million, mainly due to revenue decline from three drugs affected by national procurement policies[99]. Innovative Products and Pipeline - Non-national procurement exclusive products and innovative products accounted for 56.1% of pharmaceutical sales revenue, totaling RMB 2,404.7 million in the first half of 2024[7]. - Four innovative drugs were approved for large-scale clinical application in 2023, included in the national medical insurance catalog[8]. - The innovative drug "Lifran" was approved for listing in China in June, becoming the first methylene blue enteric-coated sustained-release tablet[9]. - The company has expanded its innovative drug portfolio to five products, with one new drug, Laifulan, approved for commercialization in China during the reporting period[21]. - The company is advancing clinical development for approximately ten projects, focusing on registration-based randomized controlled trials (RCTs)[23]. - The company has received clinical trial approvals for high-selectivity TYK2 inhibitor CMS-D001 and GnRH receptor antagonist CMS-D002, both of which are progressing steadily in Phase I clinical studies[4]. - The innovative drug "Weituo Ke" (Diazepam nasal spray) was approved for market in China in June 2023 and included in the national medical insurance directory, enhancing treatment accessibility for epilepsy patients[26]. - "Yilvqu" (Tremfya) was approved in China in May 2023 and is included in the national medical insurance directory, focusing on its low injection frequency and long-term efficacy for psoriasis treatment[28]. - "Meitai Tong" (Methotrexate injection) is the first pre-filled subcutaneous injection for psoriasis treatment approved in China, enhancing patient compliance due to reduced gastrointestinal side effects[31]. - "Weifurui" (Sucrose Hydroxyl Iron Chewable Tablets) was approved in February 2023, filling a gap in phosphorus control treatment for pediatric CKD patients aged 12-18[33]. - The company is developing three new regenerative aesthetic injection products, including Shoujo Needle and Microcrystalline Ceramics, with exclusive rights in China[4]. - The company is focusing on specialty disease areas such as cardiovascular, central nervous system, digestive, skin, and ophthalmology, enhancing its competitive edge in these fields[18]. - The company aims to enter a "new product era" driven by exclusive and innovative products, enhancing its product structure for high-quality development[21]. - The company has successfully advanced over 10 independent research projects, with three innovative drugs entering clinical development: VEGFA+ANG2 bispecific antibody, high-selectivity TYK2 inhibitor CMS-D001, and GnRH receptor antagonist CMS-D002[25]. - The company is actively promoting clinical development for non-segmental vitiligo and hidradenitis suppurativa (HS) in China, addressing the limited treatment options available for moderate to severe cases[45]. - The company has a pipeline of approximately 10 innovative drugs in various stages of development, including large molecules, small molecules, and siRNA[48]. Market and Strategic Initiatives - The impact of national procurement on the company's performance has been significant, with three original drugs not winning bids in the latest rounds, affecting overall revenue[19]. - The company is focusing on expanding its product portfolio and market presence through innovative drug development and strategic partnerships[25]. - The group has established a promotional network covering over 55,000 hospitals and medical institutions, and approximately 280,000 retail pharmacies in China[51]. - The group is focusing on optimizing promotion strategies based on clinical value and market feedback, enhancing disease solution precision for patients[49]. - The group is actively conducting real-world studies to enrich evidence-based medical data and improve patient access to new drugs[49]. - The group continues to invest in the outpatient market to increase pharmacy coverage depth and breadth[49]. - The group has launched a digital tool for ongoing employee training and operational control, ensuring compliance with national regulations[50]. - The group has a strong execution team and extensive resource coverage in its three major specialty business segments: cardiovascular, digestive, and ophthalmology[49]. - The group is leveraging multi-channel media tools to enhance health education and improve patient awareness and treatment rates[49]. - The group has developed a unique recombinant human brain natriuretic peptide product for acute decompensated heart failure, which is the only one approved in China[53]. - The group has a leading market share in the first-line treatment for inflammatory bowel disease in China, according to IQVIA data[55]. - The company is exploring potential acquisitions and market expansions to enhance its product portfolio and market presence[48]. Financial Management and Governance - The group’s sales expenses increased by 4.5% to RMB 1,400.5 million, with the sales expense ratio rising to 38.8%, up 9.7 percentage points from 29.1% in the previous year[87]. - Administrative expenses rose by 13.7% to RMB 361.5 million, with the administrative expense ratio increasing to 10.0%, up 3.1 percentage points from 6.9% in the previous year[88]. - Research and development (R&D) expenses increased by 160.4% year-on-year to RMB 622.2 million, accounting for 17.2% of revenue, up from 5.2% in the previous year[90]. - Capital expenditures rose by 216.6% year-on-year to RMB 516.6 million, representing 14.3% of revenue, compared to 3.5% in the previous year[91]. - The company has adopted a written guideline for securities trading that complies with the standards set forth in the Corporate Governance Code[128]. - The Audit Committee, consisting of three independent non-executive directors, oversees the financial reporting process and internal controls[122]. - The company believes that having the same individual serve as both Chairman and CEO is beneficial for executing business strategies and maximizing operational efficiency[127]. - The company has complied with applicable corporate governance principles and code provisions during the reporting period[125]. Shareholder Information - The company declared an interim dividend of RMB 0.1507 per share, a decrease of 51.9% year-on-year but an increase of 92.5% quarter-on-quarter[6]. - As of June 30, 2024, Mr. Lin Gang holds a controlled interest of 1,157,564,000 shares, representing 47.45% of the company[113]. - Mr. Chen Hongbing has beneficial ownership of 20,038,225 shares (0.82%) and controlled interest of 50,225,000 shares (2.06%) as of June 30, 2024[113]. - The company repurchased a total of 12,460,000 shares at a total cost of HKD 91,613,640, which were all cancelled on May 31, 2024[118]. - The share repurchase was executed at prices ranging from HKD 7.04 to HKD 7.70 per share during the period from April 2 to April 24, 2024[119]. - The group declared a final dividend of RMB 0.0783 per share for the year ended December 31, 2023, totaling RMB 191,991,000, compared to RMB 591,910,000 for the same period in 2022[155]. - The group plans to pay an interim dividend of RMB 0.1507 per share, amounting to RMB 364,171,000, compared to RMB 768,453,000 for the same period in 2023[155].