The global economic outlook is clouded by the rising uncertainty amid the escalation of potential trade conflicts and ongoing geopolitical tensions. The global trade landscape has witnessed shifts driven by escalating tariffs, geopolitical realignments, and supply chain disruptions, leading to increased cost fluctuations while introducing new complexities and challenges.
Despite multiple external headwinds, China's economy accelerated to 5.4% growth year-on-year in the fourth quarter of 2024, lifting full year growth to 5.0%, and maintained the same pace of growth at 5.4% in the first quarter of 2025. The economic achievements provide a solid foundation for achieving goals outlined in the nation's 14th Five-Year Plan (2021-2025). China is undergoing structural transformation which is progressing through high-quality development and deepened economic reforms, and shifting toward a model powered by domestic demand and innovation. Meanwhile, China's pharmaceutical industry is undergoing continuous transformation and upgrading guided by the national policies. The combined factors of the shifting demographics, evolving healthcare needs and regulatory reforms are reshaping China's pharmaceutical industry landscape. The pharmaceutical industry has continued to maintain its growth momentum driven by the increasing burden of the nation's aging population and chronic diseases and a surge for demand for quality drugs to meet the evolving needs of patients. The impacts of the ongoing implementation of medical insurance cost-control policy and the national centralised procurement policy increase operating complexities for businesses amid fierce competition. However, China's pharmaceutical industry has demonstrated a high-quality development momentum driven by policy support, technological innovation and market demand, creating new opportunities and expectations for businesses.
The numerous challenges from changes in industry policies and regulations, adjustments of market demand structure and pressure on profit margins continue to heighten operational complexities during the industry transformation cycle. The Group has intensified its efforts in strengthening its internal management in order to timely respond to such challenges and changes, and has endeavored to align its development direction with national strategies and policy framework outlined in the 14th Five-Year Plan. Over the years, the Group has placed emphasis in optimising its manufacturing strengths through allocating internal resources in order to enhance its core competitiveness. These efforts have yielded positive results. Amid the complicated operating environment, the Group's manufacturing segment has managed to maintain stable profitability. Meanwhile, the Group will keep monitoring the market trend and explore the possibility of collaborating with strategic partners for the development of business in pharmaceutical and healthcare fields, with the aim of fostering new growth for the Group. Despite China's pharmaceutical industry landscape is highly challenging, the nation's massive population, accelerated aging population, increasing prevalence of chronic diseases, growing middle class, increasing focus on health and advancements in drug development will contribute to the market's expansion and facilitate its growth momentum for the long term. The Group believes that potential opportunities will emerge from the unmet medical needs. As the diabetic population is expected to increase with the rising aging population and life expectancy, the Group expects that the commercialisation of the oral insulin product in the future would generate returns to the Group's investments.
The Group's profit for the year attributable to owners of the Company was about HK$222.6 million, which was mainly due to the non-cash item related to the gain arising from fair value change of the financial assets at fair value through profit or loss (i.e. the Group's investments in convertible bonds) of about HK$254.9 million, as compared to a loss arising from fair value change of the same non-cash item of about HK$133.0 million last year. During the year, the overall operating results of the Group's business segments remained steady.
A multitude of variables continue to affect the global environment. Despite the increase in external uncertainties, China's economic foundation has demonstrated its resilience to cope with external challenges and achieve the established development goals. China's pharmaceutical industry is navigating a high-quality development path with the nation's supportive policies and steadfast commitment in advancing its long-term strategic goal of building a Healthy China. The Group will stay cautious in managing its existing businesses and endeavor to grasp new market opportunities emerged from the industry development in an effort to drive new growth for the Group.
On behalf of the Board, I would like to express our appreciation to all staff of the Group for their dedicated efforts and contribution to the Group, and to the shareholders, business partners and other stakeholders for their continuous support.
Dr. Xie YiChairman