For the financial year ended 30 April 2016, the Group had made encouraging achievements in various aspects.

In April 2015, the Group successfully registered bio-engineered cornea and became the world’s first regenerative medicine company to obtain registration for this product category. In October 2015, the Group also successfully registered Asiunin, becoming the first regenerative medicine company to obtain registration for such products in China. Over the past three years, the Group has obtained various product registration and new technology approvals and sets the stage for converting its R&D achievements into valuable business opportunities.

  • I. BUSINESS REPORT

    Bio-engineered cornea Acornea is a pioneering medical product in the world and has successfully entered into a number of influential ophthalmic hospitals in the past year to help cure blind patients resulting from corneal diseases. To accelerate the safe entry of bio-engineered cornea into the medical market, the Group has established an Ophthalmology Expert Committee chaired by Prof. XIE Lixin (academician of Chinese Academy of Engineering). Such Committee has 18 top experts and professors from domestic ophthalmic hospitals as members. To promote cornea transplant surgery technique to more doctors, the Group invested RMB5 million in organizing 12 training courses and trained 250 ophthalmic surgeons. By now, over 100 clinical hospitals have participated in cornea transplant using Acornea and helped cure many patients suffering from corneal blindness.

    Asiunin is the first anal fistula treatment product to obtain such product registration certificate in China. The Group is undertaking sales and marketing activities for Asiunin and making inroads into hospitals for such product. The Group has signed contracts with 18 agents and 10 hospitals are carrying out clinical application. The Group is also in the process of promoting sales of Gegreen and ActivSkin.

    Cell and stem cell businesses are advancing according to the Group’s plan. Our China Stem Cell Clinical Applications Centre at Phase 3 of Hong Kong Science Park in Shatin has started construction and equipment procurement. Such Centre, which aims to comply with EU and US technological standards, is expected to have construction completed and start operation during the first half of 2017.

    The Group will continue to cooperate with the University of Hong Kong to develop anti-aging products and achieve anti-aging outcome using stem cell technology. The Group has completed the acquisitions of Tianjin Weikai and AK Suzhou. The former provides CRO services and currently has started selling 3D perfusion cell culture systems, while the latter is developing its cell processing and storage businesses.

    The Group’s Ascara cosmetic business commenced sales in the past year and has established high-end counters in 12 cities including Shenzhen, Guangzhou and Chongqing. Sales is growing rapidly and is expected to contribute positively to the Group’s financial performance.

  • II. MANAGEMENT REPORT

    After careful review and consideration, the Board of the Company has decided to adopt a modern corporate management structure and to clearly identify the respective functions of the shareholders, board of directors and the management team, with each having its own functions and operating separately. The Group has formulated a series of incentive policies and established a system whereby employees will develop in tandem with the enterprise with their respective interests aligned.

    For business management, the Group has classified its business into three segments, i.e. tissue engineering, stem cell as well as cosmetics and healthcare. The three segments will keep enriching their product lines and expanding related products to perfect and scale up their operations.

    To broaden income sources, reduce expenditure and improve the overall financial condition of the Company as soon as possible, the Group has implemented cost accounting at all levels of management and across different business segments and shut down inefficient operations. The Group also carries out all-round financial budget management and cost accounting system.

    The Group promotes an option incentive scheme among employees and granted five-year options to senior management, experts and eligible staff so as to allow key staff to develop in tandem with the Group and align their interests with those of the Group.

  • III. SALES REPORT

    Over the past financial year, the Group started market-oriented product sales. Bio-engineered cornea commenced sales since December 2015 and has successfully entered into more than 100 hospitals via 30 distributors. Various provinces have reported their first successful transplantation of bio-engineered cornea and many patients suffering from cornea diseases regained their eyesight with the help of bio-engineered cornea, Acornea. The Group will accelerate the training of surgeons and carry out larger scale of sales and marketing.

    Promotion of bio-engineered cornea in overseas markets is also advancing steadily. The Group has successfully signed agency contract with an agent in the Philippines, who is undertaking local registration work for bio-engineered cornea and may gain import licence in 2017. Ukraine has sent doctors to take cornea transplantation surgical training courses in China and they have been granted related certificate. Various other countries have also proposed to send their surgeons to take training courses on corneal transplantation in China. At present, there are about six countries and regions negotiating on agency contracts for bio-engineered cornea with the Group.

    Sales of the Group’s cosmetics and cartilage products are progressing as planned.

  • IV. OUTLOOK

    Over the past year, the Group has changed in various aspects and records not only investment outflow but also income. The Group’s major businesses underwent clear restructuring with the establishment of three business segments, and the Group aims to broaden income sources, streamline operations and reorganise inefficient departments.

    Looking forward, the Group aims to keep expanding its three business segments and enriching their product lines via mergers and acquisitions. The Group also strives to enhance its modern corporate management structure, promote reasonable incentive mechanism and endeavor to change its financial conditions.

Shao Zhengkang
Chief Executive Officer
Hong Kong, 15 July 2016