Empowering Growth and Sustainability with a Purpose-driven Business
JACOBSON PHARMA CORPORATION LIMITED
Incorporated under the laws of the Cayman Islands with limited liability
Stock Code : 2633
2023/2024 Annual Report
CONTENTS
1
Corporate Information
2
Financial Highlights
4
Chairman's Statement
6
Corporate Vision and Mission
7
Corporate Profile
8
Management Discussion & Analysis
21
Corporate Governance Report
36
Report of the Directors
54
Independent Auditor's Report
58
Consolidated Statement of Profit or Loss and Other Comprehensive Income
60
Consolidated Statement of Financial Position
61
Consolidated Statement of Changes in Equity
62
Consolidated
Cash Flow Statement
63
Notes to the
Financial Statements
124
Group Properties
125
Five-year Financial Summary
126
Glossary
CORPORATE INFORMATION
BOARD OF DIRECTORS
Executive Directors
Mr. Sum Kwong Yip, Derek
(Chairman and Chief Executive Officer)
Mr. Yim Chun Leung
Ms. Pun Yue Wai
Non-executive Director
Professor Wong Chi Kei, Ian
Independent Non-executive Directors
Dr. Lam Kwing Tong, Alan
Mr. Young Chun Man, Kenneth Professor Lam Sing Kwong, Simon
AUDIT COMMITTEE
Mr. Young Chun Man, Kenneth (Chairman) Dr. Lam Kwing Tong, Alan Professor Lam Sing Kwong, Simon
REMUNERATION COMMITTEE
Dr. Lam Kwing Tong, Alan (Chairman)
Mr. Young Chun Man, Kenneth
Ms. Pun Yue Wai
NOMINATION COMMITTEE
Mr. Young Chun Man, Kenneth (Chairman)
Dr. Lam Kwing Tong, Alan
Mr. Yim Chun Leung
EXECUTIVE COMMITTEE
Mr. Sum Kwong Yip, Derek (Chairman)
Mr. Yim Chun Leung
Ms. Pun Yue Wai
ENVIRONMENTAL, SOCIAL AND GOVERNANCE COMMITTEE
Professor Lam Sing Kwong, Simon (Chairman)
Mr. Yim Chun Leung
Mr. Yu Chun Kau
AUTHORISED REPRESENTATIVES
Mr. Yim Chun Leung
Ms. Pun Yue Wai
COMPANY SECRETARY
Mr. Yu Chun Kau
REGISTERED OFFICE
Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KY1-1111
Cayman Islands
HONG KONG HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS
Unit 2313-18, 23/F
Tower 1, Millennium City 1
388 Kwun Tong Road
Kwun Tong, Kowloon
Hong Kong
PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE
Conyers Trust Company (Cayman) Limited
Cricket Square
Hutchins Drive
PO Box 2681
Grand Cayman KY1-1111
Cayman Islands
HONG KONG BRANCH SHARE REGISTRAR
Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
AUDITOR
KPMG
Certified Public Accountant
Public Interest Entity Auditor registered in accordance with
the Accounting and Financial Reporting Council Ordinance
PRINCIPAL BANKERS
(in alphabetical order) Chong Hing Bank Limited Standard Chartered Bank (Hong Kong) Limited
The Hongkong and Shanghai Banking Corporation Limited
PUBLIC RELATIONS CONSULTANT
Strategic Public Relations Group
INVESTOR RELATIONS
Email: jacobsonpharma@sprg.com.hk
STOCK CODE
2633
COMPANY WEBSITE
www.jacobsonpharma.com
002 JACOBSON PHARMA CORPORATION LIMITED
FINANCIAL HIGHLIGHTS
Revenue | ||||
(HK$'000) | ||||
1,800,000 | ||||
1,600,000 | ||||
1,400,000 | ||||
1,200,000 | ||||
1,000,000 | ||||
800,000 | ||||
600,000 | ||||
400,000 | ||||
200,000 | ||||
0 | ||||
FY2020 | FY2021 | FY2022 | FY2023 | FY2024(1) |
Generic Drugs | Branded Healthcare |
Adjusted EBITDA
(HK$'000) | ||||
600,000 | ||||
550,000 | ||||
500,000 | ||||
450,000 | ||||
400,000 | ||||
350,000 | ||||
300,000 | ||||
250,000 | ||||
200,000 | ||||
150,000 | ||||
100,000 | ||||
50,000 | ||||
0 | ||||
FY2020 | FY2021 | FY2022 | FY2023 | FY2024(1) |
Net Debts
(HK$'000) | ||||
1,200,000 | ||||
1,000,000 | ||||
800,000 | ||||
600,000 | ||||
400,000 | ||||
200,000 | ||||
0 | ||||
FY2020 | FY2021 | FY2022 | FY2023 | FY2024(1) |
Profit Attributable
to Equity Shareholders
(HK$'000) | ||||
300,000 | ||||
250,000 | ||||
200,000 | ||||
150,000 | ||||
100,000 | ||||
50,000 | ||||
0 | ||||
FY2020 | FY2021 | FY2022 | FY2023 | FY2024(1) |
Net Assets
(HK$'000) | ||||
3,500,000 | ||||
3,000,000 | ||||
2,500,000 | ||||
2,000,000 | ||||
1,500,000 | ||||
1,000,000 | ||||
500,000 | ||||
0 | ||||
FY2020 | FY2021 | FY2022 | FY2023 | FY2024(1) |
Net Gearing Ratio
0.5 | ||||
0.4 | ||||
0.3 | ||||
0.2 | ||||
0.1 | ||||
0.0 | ||||
FY2020 | FY2021 | FY2022 | FY2023 | FY2024(1) |
JACOBSON PHARMA CORPORATION LIMITED | 2023/2024 ANNUAL REPORT 003
Year ended | Year ended | ||
31 March 2024 | 31 March 2023 | Change | |
(restated) (1) | |||
HK$'000 | HK$'000 | ||
Revenue from continuing operations | 1,467,798 | 1,267,598 | + 15.8% |
Gross profit | 620,475 | 538,918 | + 15.1% |
Gross profit margin (%) | 42.3% | 42.5% | |
Profit attributable to equity shareholders of the Company | 266,968 | 251,044 | + 6.3% |
Profit margin attributable to equity shareholders of the Company (%) | 18.2% | 19.8% | |
Adjusted EBITDA from continuing operations(2) | 453,071 | 444,162 | + 2.0% |
Adjusted EBITDA margin from continuing operations (%)(3) | 30.9% | 35.0% | |
Return on equity (%)(4) | 10.3% | 9.1% | |
As at | As at | ||
31 March 2024 | 31 March 2023 | Change | |
HK$'000 | HK$'000 | ||
Total assets | 3,486,854 | 5,380,499 | - 35.2% |
Total liabilities | 1,090,494 | 2,123,977 | - 48.7% |
Total equity | 2,396,360 | 3,256,522 | - 26.4% |
- The branded healthcare segment has been classified as discontinued operations of the Group for the year ended 31 March 2024. In accordance with Hong Kong Financial Reporting Standard 5, Non-currentAssets Held for Sale and Discontinued Operations, the Group has restated the comparative information for the year ended 31 March 2023 in this regard.
- Adjusted EBITDA from continuing operations is calculated based on adjusted earnings from continuing operations before interest, taxes, depreciation and amortisation, where "interest" is regarded as including interest income from bank deposits and investments and finance costs. To arrive at adjusted EBITDA from continuing operations, the Group's earnings are further adjusted for share of profits/losses of associates and non- recurring items not attributable to the operations of individual segments.
- Adjusted EBITDA margin from continuing operations is calculated based on adjusted EBITDA from continuing operations divided by revenue from continuing operations and multiplied by 100%.
- Return on equity is calculated based on profit for the year divided by the arithmetic mean of the opening and closing balances of total equity in the relevant year and multiplied by 100%.
004 JACOBSON PHARMA CORPORATION LIMITED
CHAIRMAN'S STATEMENT
Dear Shareholders,
"We aim to positively impact people's health as a forward-looking and value-driven company where individuals can thrive, driven by our purpose, dedication, values, and performance culture."
Embracing the Revival
The fiscal year 2024 has unfolded as a season of revival for Hong Kong, akin to the cherished arrival of spring after a stark winter. As our city reclaimed its economic and societal normalcy post-pandemic, a palpable sense of celebration and anticipation for the thriving of all facets of life emerged.
For Jacobson, the past years have been a testament to our resilience, adaptability, and unwavering commitment to delivering quality healthcare solutions as a trusted partner. Amidst the challenges, we seized opportunities to solidify our position as an eminent provider of generic drugs and specialty medicines.
Delivering Strategic Achievements
Our solid performance throughout FY2024, being built upon the momentum established in the first half, underscores our strategic execution and dedication to our mission. The year was characterised by significant achievements and considerable headway in our strategic endeavors, reinforced by a sound financial performance. Our total revenue grew by 15.8% to HK$1,467.8 million, while profit attributable to equity shareholders sustained a moderate growth of 6.3%. Through disciplined cost management, we maintain a strong cash flow position, which enables us to deliver steady dividend payouts and enhance shareholder value.
Our growth strategies are geared towards enriching our product portfolio, thereby strengthening the fundamentals for business growth. Our dedication to expanding our product portfolio, strengthening research and development capabilities, and optimising commercial strategies has yielded tangible results. The launch of several key additions, including Entecavir Tablets, Eplerenone Tablets, Febuxostat Tablets, and Letrozole Tablets, has enriched our offerings and addressed evolving patient needs across diverse therapeutic areas. Furthermore, we have made significant strides within our research and development pipeline, with 12 products successfully submitted for approval, paving the way for future market introductions.
JACOBSON PHARMA CORPORATION LIMITED | 2023/2024 ANNUAL REPORT 005
Through strategic collaborations, we secured exclusive rights to six high-performing specialised drugs, spanning gastroenterology, cardiovascular health, endocrinology, inflammatory diseases, oncology, and breast cancer therapy. These partnerships not only diversify our product lines and position us for sustained growth but also underscore our dedication to improving patient outcomes.
Commitment to Operational Excellence
Reflecting our commitment to operational excellence, we have made significant progress in improving manufacturing processes, expanding production capacities, and investing in automation. Notably, our liquid dosage form production surged by 26.6% compared to the previous year, showcasing our agility in meeting evolving market demands and ensuring a consistent supply of high-quality medicines.
In today's digital age, the pursuit of operational excellence extends beyond the laboratory and the manufacturing domain. We have embarked on the development of "e-Jacob Pharma2U" - an innovative e-ordering platform tailored specifically for the procurement needs of private clinics. The initial pilot phase of this project yielded promising results, with favorable user feedback and an impressive adoption rate. This digitisation initiative not only enhances our sales and customer service capabilities but also underscores our commitment to leveraging technology for the benefit of our stakeholders.
Pursuing ESG Initiatives
However, our aspirations extend far beyond commercial and financial performance. Through our holistic "5 to Thrive" ESG strategy, we have made meaningful strides in corporate governance, product responsibility, societal engagement, environmental stewardship, and commitment to our employees. Our dedication to ESG principles is evidenced by the receipt of five esteemed awards, including the Good MPF Employer Award and the Partner Employer Award, and solid progress on twelve environmental targets in areas like greenhouse gas emissions, waste management, and resource reduction. Additionally, we prioritised employee engagement by empowering them to shape our culture and collaborating with social enterprises on grassroots projects.
Navigating Evolving Landscape with Optimism
Looking ahead, while we anticipate a gradual post-pandemic recovery, we remain cognisant of the prevailing economic uncertainties influenced by geopolitical tensions and volatility. Recognising these market headwinds, we retain optimism regarding the long-term resilience of our economy and the growth potential of the generic drugs market and the broader healthcare industry. We are committed to cultivating the adaptability and agility of our business within this evolving landscape, fortifying our foundations for sustainable growth.
We aim to positively impact people's health as a forward-looking and value-driven company where individuals can thrive, driven by our purpose, dedication, values, and performance culture. Our strategic focus remains on maximising commercial opportunities, fortifying our pipelines, establishing a robust commercial platform, and expanding our footprint across key markets in Asia.
Appreciation and Acknowledgment
In closing, on behalf of the Board, I wish to extend my gratitude to our employees, partners, and shareholders. Your unwavering support and contributions have been pivotal in our journey towards delivering accessible, quality healthcare solutions and creating sustainable value for all stakeholders.
Sincerely,
Sum Kwong Yip, Derek
Chairman and CEO
JACOBSON PHARMA CORPORATION LIMITED
20 June 2024
006 JACOBSON PHARMA CORPORATION LIMITED
CORPORATE VISION AND MISSION
A VISION | A CULTURE | |||
A MISSION | ||||
THAT | THAT | THAT | ||
MATTERS | INSPIRES | ACHIEVES | ||
OUR VISION
At Jacobson, we aspire to be an eminent player in essential medicines, specialty drugs and healthcare solutions in Greater China and Asia.
OUR CULTURE
Three core components i.e. Challenge, Connect, Commit unite our corporate culture and values that define how we act and what we do:
OUR MISSION
We strive to create sustainable values that meet current and future customer needs through carefully-orchestrated investment in R&D.
We enhance the communities in which we operate.
We build shareholder values in all we do.
CHALLENGE
We proactively venture into uncharted turf for exploring opportunities. We go the extra-mile for attaining excellence via innovative solutions.
CONNECT
We work cohesively as "one company one team" to create and share best practices. We connect local knowledge with global resources.
COMMIT
We deliver on what we promise. We do not compromise on quality and integrity.
JACOBSON PHARMA CORPORATION LIMITED | 2023/2024 ANNUAL REPORT 007
CORPORATE PROFILE
The Group is a leading pharmaceutical company in Hong Kong vertically integrated with the research, development, production, sale and distribution of essential medicines and specialty drugs. As a major provider of generic drugs in Hong Kong, the Group has one of the most extensive sales and distribution coverage for both the Public and Private Sectors in Hong Kong, with an expanding reach into strategically selected Asian markets. Carrying a broad product portfolio and taking a pre-eminent market position in a number of therapeutic categories, the Group operates a host of 9 licensed production facilities for pharmaceutical products in Hong Kong.
The Group has invested significantly in its commercial infrastructure and manages its own warehousing, logistics, regulatory, quality control, and sales and marketing operation. Our SAP powered warehousing complex is located at the hub of Hong Kong, which facilitates a high degree of supply chain efficiency and flexibility in providing logistic solutions to our customers.
COMPETITIVE STRENGTHS
- Leadership in a Diverse Range of Essential and Specialty Drugs in Hong Kong
Over a long and successful track record, we have built a comprehensive product portfolio, including respiratory, cardiovascular, central nervous system, gastrointestinal and oral anti-diabetics, cementing our position as a leader in a number of large and fast growing therapeutic categories in the Hong Kong pharmaceutical market. We continually expand our portfolio to reinforce our leadership position with a strategic focus on specialty drugs and biosimilars to tap the fast growing market segments.
- Leading Research and Development Capabilities That Can Develop Premium Generic Drugs and Healthcare Solutions to Fulfill Unmet Demands
We are a leading pharmaceutical R&D company in Hong Kong among generic drug manufacturers in terms of number of new drugs registered in the past few years. We have been able to identify products with good potential based on our strong relationships with customers and deep market insight. We actively explore collaborations with local and overseas R&D institutions and companies on the development of innovative technologies for pharmaceutical manufacturing.
- Well-EstablishedSales and Distribution Network with Extensive Market Coverage
We have extensive local market penetration, covering substantially all of the Public and Private Sector institutions and registered pharmacies, as well as doctors in private practice. Our deep industry knowledge, extensive sales network and close interactions with market participants enable us to gather significant feedback, relevant market intelligence and data on industry trends for further strengthening our product development strategies and identifying business opportunities. We are also committed to the strategy of expanding our regional presence into strategically selected markets in Asia Pacific.
- Robust Logistics Infrastructure and Specialised Capabilities
Our key strengths stem from a centralised distribution center and a high-capacity fleet of delivery trucks, positioning us to meet substantial volume demands with efficiency. We maintain industry-leading accreditations and adhere to stringent standards, ensuring both quality and regulatory compliance, thereby reinforcing our commitment to excellence. In addition to our robust foundation, we have developed specialised capabilities in vaccine and advanced therapy products logistics. Our effective warehousing practices, powered by advanced IT systems, drive accuracy and efficiency in our operations, establishing a reliable service framework. Beyond infrastructure and compliance, our specialised capabilities in addressing diverse storage and distribution needs position us as a comprehensive logistics provider within the pharmaceutical industry.
008 JACOBSON PHARMA CORPORATION LIMITED | MANAGEMENT DISCUSSION & ANALYSIS
MANAGEMENT DISCUSSION & ANALYSIS
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Jacobson Pharma Corporation Ltd. published this content on 12 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 July 2024 10:12:08 UTC.