Persistent armed conflicts and escalating geopolitical tensions pose significant challenges to global geoeconomic and supply-chain stability, contributing to ongoing global trade and economic uncertainties. The external environment remains complex and volatile.
Amid the ongoing global trade and economic uncertainties, China achieved a successful conclusion of the 14th Five-Year Plan (2021-2025), with its economic strength, technological capability, and comprehensive national power leaping to a new level. China's economy expanded at 5% annual pace in 2025, meeting the country's target, and has entered the first year of the 15th Five-Year Plan (2026-2030) with solid momentum, registering a 5% economic growth in the first quarter of 2026. The outline of the 15th Five-Year Plan marks a shift from the previous phase of high-speed growth toward high-quality development at a new stage, prioritising innovation and sustainability, and making domestic demand a more prominent economic driver. Meanwhile, China's pharmaceutical industry continues to see policy refinements and has entered a new development phase driven by demographic shifts, rising healthcare expenditures, and ongoing scientific innovation. Influenced by the national policies and measures to deepen the healthcare reforms, the pharmaceutical industry regulation has become increasingly stringent. The normalisation of the centralised volume-based procurement, dynamic adjustments to the national reimbursement drug list, reforms to medical insurance payment methods and the optimisation of innovative drug review and approval process, continue to drive industry transformation and upgrading while intensifying competition within the industry. Pharmaceutical enterprises are facing intense competition and various challenges alongside the healthcare reforms and regulatory changes. Nevertheless, the Group believes that emerging opportunities and ongoing challenges revolve around the highly competitive environment.
Facing the challenging market situation, the Group stays focused on disciplined cost and expense management, ongoing improvements in production efficiency and sales and marketing capabilities to minimise the impacts of pricing pressure, structural realignment and intensified competition. While the Group has a foundation of self-manufactured pharmaceutical products and its manufacturing segment has continued to maintain a steady performance in recent years, the Group recognises that both pharmaceuticals and healthcare are central to China's Healthy China national strategy benefiting from the aging demographic tailwinds, and the increasing health awareness and surge in demand for healthcare solutions. The Group believes that China's pharmaceutical and healthcare industries will continue to offer new growth momentum and opportunities for businesses in the 15th Five-Year Plan period. The Company has a long-term vision to transform the Group into an integrated health solutions provider by capitalising on the synergies between the Group's pharmaceutical expertise and healthcare diversification, and will actively explore new business opportunities in the healthcare sector that complement the Group's core pharmaceutical business, thus creating new and sustainable revenue streams.
The Group's loss for the year attributable to owners of the Company was about HK$979.7 million, which was mainly due to certain noncash items, including the loss 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$813.6 million, as compared to a gain arising from fair value change of the same item of about HK$254.9 million last year; and the impairment provision made to the Group's interest in an associate of about HK$95.2 million (Further details are included in the "Management Discussion and Analysis" section). During the year, the overall operating results of the Group's business segments remained steady.
Amid persistent external headwinds, China's economy has proved its resilience. China's pharmaceutical and healthcare sectors are offering substantial opportunities for businesses in the country's evolving needs. The competitive landscape presents both challenges and opportunities. The Group will stay cautious in managing its existing businesses and endeavour to grasp opportunities emerging in pharmaceutical and healthcare markets 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