李氏大药厂中期报告2023

INTERIM FINANCIALSTATEMENTS The Directors present herewith the unauditedconsolidated interim financial results (the “InterimResults”) of the Group for the six months ended 30June 2023, together with the comparative figuresfor the corresponding period in 2022. The InterimResults are unaudited, but have been reviewed bythe Company’s auditor, Confucius InternationalCPA Limited (the “Auditor”) in accordance withHong Kong Standard on Review Engagements 2410“Review of Interim Financial Information Performedby the Independent Auditor of the Entity” issuedby the Hong Kong Institute of Certified PublicAccountants (“HKICPA”). The Audit Committeehas also reviewed with the management and theAuditor the Interim Results before recommending itto the Board for approval. 2410 BUSINESS REVIEW Revenue and Profit During the first-half 2023, the Group has faceddiverse challenges, including price and marginpressureresulting from the lowered price ofcertain products in exchange for being included inthe national reimbursement scheme, the loweredmargin of the product under national volume-basedprocurement program and the depreciation of theRenminbi during the period under review, whichencompass its operations. Nevertheless, havingproducts included in the national reimbursementscheme and national volume-based procurementprogram presents both risks and opportunities, asit has opened up the potential for increased marketaccess and volume. In addition, the Group hasmade significant strides in improving its operationalefficiency and to reduce costs. As a result ofthe diligent efforts, the Group has successfullymaintained profitability during this period underreview. F i r s t - h a l f2 0 2 3 r e v e n u e o f t h e G r o u pt o t a l l e dH K $ 5 1 2 , 3 0 8 , 0 0 0( F i r s t - h a l f 2 0 2 2 :HK$649,166,000), a decrease of 21.1% comparedto the same period last year which is mainlyattributable to the impact of the expiration ofproduct license and the declining products, andthe depreciation of the Renminbi. Nevertheless,the Group has effectively showcased sales growthacrossits available product range.Ferplex®,Bredinin™, Sancuso®and Trittico®have shownsignificant growth during the first-half 2023, withimpressive growth rates of 39.6%, 43.4%, 197.4%and 176.3%, respectively. In addition, two othernewer generic products, namely FondaparinuxSodiumInjection and Sodium PhenylbutyrateGranules, recorded smaller sales amounts but haveshown high growth potential in the market andgrew 584.1% and 83.5%, respectively. 512,308,000649,166,00021.1%®™®®39.6%43.4%197.4%176.3%584.1%83.5% 46.9%61.2%53.1%38.8% Sales of licensed-in products were predominantin the past, but there has been a shift towardsi n c r e a s e ds a l e s o f p r o p r i e t a r y a n d g e n e r i cproducts starting from the beginning of 2023.Sales of licensed-in products in the first-half 2023accounted for 46.9% (First-half 2022: 61.2%) ofthe Group’s revenue while sales of proprietary andgeneric products in the first-half 2023 contributed53.1% (First-half 2022: 38.8%) of the Group’srevenue. 284,463,000419,478,00032.2%55.5%64.6%9.1 F i r s t - h a l f2 0 2 3 g r o s s p r o f i t o f t h e G r o u pw a sH K $ 2 8 4 , 4 6 3 , 0 0 0( F i r s t - h a l f 2 0 2 2 :HK$419,478,000), a decrease of 32.2% comparedto the same period last year. The Group’s overallgross profit margin was 55.5%, decreased by 9.1percentage points as to 64.6% achieved in thefirst-half 2022. The Group has shifted towardsoffering a broader range of products, includinglower-margin generic products under nationalreimbursement scheme and national volume-basedprocurement program, which caused a decrease inthe overall gross profit margin. 113,634,000206,517,00045.0%22.2%31.8%48,798,000116,590,00064,836,00089,927,000 R&D expenses represented new drugs developmentin major therapeutic areas such as cardiovascular,w o m a nh e a l t h ,p a e d i a t r i c s ,r a r e d i s e a s e s ,dermatology and obstetrics, as well as in oncologyunder a separate R&D arm within the Group.During the first-half 2023, the Group continuestooptimise the resources allocation amongprioritised R&D projects and to persist in cost-saving efforts. An aggregate of HK$113,634,000hasbeen spent in the first-half 2023(First-half2022:HK$206,517,000),decreased by45.0% compared to the same period last yearandrepresented 22.2%to the correspondingrevenue for the period (First-half 2022: 31.8%).Among which HK$48,798,000 (First-half 2022:H K $ 1 1 6 , 5 9 0 , 0 0 0 )h a s b e e n r e c o g n i s e d a sexpenses and HK$64,836,000 (First-half 2022:HK$89,927,000) has been capitalised as intangibleassets. As expected, the Group strategically selectsnew initiatives when previous R&D projects overtime reach completion, there is a reduction in theR&D expenditure incurred during the period underreview. 146,931,000176,215,00029,284,00016.6%28.7%27.1%1.6 The Group’s selling and distribution expenseswasHK$146,931,000 in the first-half 2023,representing a dec