2023-04-21-港交所-中生联合_2022年年报_230页_9mb

2022 Annual Report Summary

Core Content

This summary outlines the key details of the 2022 Annual Report of Nanjing Sinolife United Company Limited, a joint stock limited liability company incorporated in the People's Republic of China (PRC), with the stock code 3332. The report includes corporate information, financial highlights, chairman's statement, management discussion and analysis, and various reports related to governance, sustainability, and audit.

Main Points

Corporate Information

• Company Name: Nanjing Sinolife United Company Limited
• Stock Code: 3332
• Registered Office and Headquarters:
  • PRC: 8/F, Deji Building, Block E-2, 188 Chang Jiang Road, Xuanwu District, Nanjing, Jiangsu Province
  • Hong Kong: 40th Floor, Jardine House, 1 Connaught Place, Hong Kong
• Joint Company Secretaries:
  • Ms. Zhi Hui
  • Ms. Kam Mei Ha Wendy (FCG, HKFCG)
• Legal Advisors:
  • Hong Kong Law: Chiu & Partners
  • PRC Law: King & Wood Mallesons
• H Share Registrar: Computershare Hong Kong Investor Services Limited
• Principal Bankers:
  • Shanghai Pudong Development Bank Cheng Dong Branch
  • Agricultural Bank of China Ma Qun Branch
• Auditor: Ernst & Young
• Company Website: www.zs-united.com

Directors and Committees

• Executive Directors:
  • Mr. Gui Pinghu (Chairman)
  • Ms. Zhang Yuan (Chief Executive Officer)
  • Ms. Zhu Feifei
• Independent Non-executive Directors:
  • Mr. Zhang Jitong (resigned on 25 January 2022)
  • Mr. Yu Bo (appointed on 26 January 2022)
  • Ms. Cai Tianchen
  • Mr. Wang Wei
• Audit Committee:
  • Ms. Cai Tianchen (Chairman)
  • Mr. Zhang Jitong (resigned on 25 January 2022)
  • Mr. Yu Bo (appointed on 26 January 2022)
  • Mr. Wang Wei
• Remuneration Committee:
  • Mr. Wang Wei (Chairman)
  • Ms. Cai Tianchen
  • Ms. Zhu Feifei
• Nomination Committee:
  • Mr. Yu Bo (Chairman, appointed on 26 January 2022)
  • Mr. Zhang Jitong (resigned on 25 January 2022)
  • Mr. Wang Wei
  • Ms. Zhang Yuan
• Strategy and Development Committee:
  • Mr. Gui Pinghu (Chairman)
  • Mr. Zhang Jitong (resigned on 25 January 2022)
  • Mr. Yu Bo (appointed on 26 January 2022)
  • Ms. Cai Tianchen

Financial Highlights

• Revenue: Increased by approximately 9.0% to RMB274.9 million (2021: RMB252.3 million)
• Gross Profit: Increased by approximately 15.3% to RMB160.0 million (2021: RMB138.8 million)
• Loss for the Year: Decreased by approximately 55.2% to RMB14.2 million (2021: RMB31.7 million)
• Loss per Share: RMB1.51 cents (2021: RMB3.35 cents)
• Dividend Recommendation: The Board does not recommend any final or special dividends for 2022

Chairman's Statement

• The Group faced numerous challenges in 2022, including the pandemic, Russia-Ukraine conflict, domestic heat waves, and inflation.
• The Group continued to focus on the development of the Good Health brand, achieving significant growth in e-commerce and maternity/child product distribution.
• In 2023, the Group plans to:
  • Increase R&D investment to shorten product development cycles
  • Identify high-quality suppliers to reduce costs
  • Strengthen brand promotion through online and offline channels
  • Expand sales scale to improve profitability
• The Group also aims to promote the Good Health series in the PRC, New Zealand, and Australia to improve public health conditions.

Product Information

• The Good Health brand offers a range of products, including:
  • Propolis Capsules
  • Oyster Plus Capsules
  • Hi Cal™ Liquid Calcium & Vitamin D
  • Viralex Attack Capsules
  • Grape Seed 55,000 Capsules
  • 1-a-day Glucosamine Capsules
  • CalciGrow Nutrient Powder with DHA and Multivitamins
  • Good Kids Vision Chews
  • Kids Magnesium Chews
  • Kids Immune Chews
  • Gummy Candy Series
  • Mussel 6000 Capsules
  • Milk Thistle 35,000 Capsules
  • Green-Lipped Mussel Capsules
  • Garcinia Capsules
  • Omega-3 Fish Oil Capsules
  • Bilberry & Lutein Capsules

Management Discussion and Analysis

Financial Review

• Revenue: Increased by 9.0% to RMB274.9 million
• Gross Profit: Increased by 15.3% to RMB160.0 million
• Gross Profit Margin: Increased from 55.0% to 58.2%
• Loss for the Year: Decreased by 55.2% to RMB14.2 million
• Loss per Share: RMB1.51 cents (2021: RMB3.35 cents)
• Other Income and Gains: Decreased to RMB7.9 million from RMB15.1 million in 2021 due to reduced government grants and one-time gain from asset disposal in 2021

Operating Performance

• Selling and Distribution Expenses: Increased by 2.5% to RMB108.6 million, representing 39.5% of revenue
• Administrative Expenses: Decreased by 9.0% to RMB63.9 million, representing 23.3% of revenue
• Income Tax Expense/Credit: RMB3.7 million (2021: RMB1.4 million credit)
• Cash and Cash Equivalents: Increased by RMB1.3 million
• Inventories: Increased by 25.5% to RMB75.3 million, with inventory turnover days decreasing to 213 from 228
• Trade Receivables: Increased by 7.6% to RMB28.2 million
• Trade Payables: Increased by 36.9% to RMB21.5 million

Capital Resources and Risks

• Capital Expenditure: Approximately RMB1.4 million invested in R&D, plants, and equipment
• Gearing Ratio: 14.1% as of 31 December 2021, 23.3% as of 31 December 2022
• Foreign Exchange Exposure: The Group conducts transactions in RMB, NZD, USD, and AUD. It is exposed to currency fluctuations, particularly against USD, AUD, and NZD.
• Principal Risks:
  1. Force Majeure Events: May impact business operations and results
  2. Raw Material and Packaging Price Increases: Could affect profitability and competitiveness
  3. Consumer Preferences: Failure to respond to changes may harm sales and customer relationships
  4. Foreign Exchange Risk: Fluctuations may affect financial performance and investor sentiment

Key Information

• The Group experienced a significant improvement in financial performance compared to 2021, with revenue and gross profit increasing, and loss decreasing.
• Strategic focus on the Good Health brand and e-commerce platforms contributed to the growth in sales.
• The Group's financial health is supported by increased cash flow and improved inventory turnover.
• The Group is exposed to various risks, including currency fluctuations, raw material price changes, and the need to continuously innovate and respond to market trends.
• The Board has not implemented any hedging strategies for foreign exchange risks.
• The Group has no material capital commitments or contingent liabilities as of 31 December 2022.