SinoMab BioScience Limited — Interim / Quarterly Report 2024

Sep 26, 2024

CONTENTS

• Corporate Information
• Chairman's Statement
• Management Discussion and Analysis
• Independent Review Report
• Interim Condensed Consolidated Financial Statements
• Interim Condensed Consolidated Statement of Profit or Loss
• Interim Condensed Consolidated Statement of Comprehensive Income
• Interim Condensed Consolidated Statement of Financial Position
• Interim Condensed Consolidated Statement of Changes in Equity
• Interim Condensed Consolidated Statement of Cash Flows
• Notes to Interim Condensed Consolidated Financial Information
• Other Information
• Definitions

Corporate Information

DIRECTORS

Executive Directors

Dr. Shui On LEUNG (Chairman and Chief Executive Officer) Mr. Shanchun WANG (President (China)) (appointed on 7 February 2024)

Non-executive Directors

Dr. Haigang CHEN Mr. Xun DONG Dr. Wenyi LIU Mr. Lei SHI Dr. Jianmin ZHANG

Independent Non-executive Directors

Mr. George William Hunter CAUTHERLEY Mr. Ping Cho Terence HON Dr. Chi Ming LEE Mr. Dylan Carlo TINKER

AUDIT COMMITTEE

Mr. Ping Cho Terence HON (Chairman) Mr. George William Hunter CAUTHERLEY Dr. Chi Ming LEE Mr. Dylan Carlo TINKER

REMUNERATION COMMITTEE

Dr. Chi Ming LEE (Chairman) Mr. Ping Cho Terence HON Dr. Shui On LEUNG

NOMINATION COMMITTEE

Dr. Shui On LEUNG (Chairman) Mr. Ping Cho Terence HON Mr. Dylan Carlo TINKER

COMPANY SECRETARY

Ms. Yuk Yin Ivy CHOW

AUTHORISED REPRESENTATIVES

Dr. Shui On LEUNG Mr. Jianping HUA

REGISTERED OFFICE

Units 303 and 305 to 307 No. 15 Science Park West Avenue Hong Kong Science Park, Pak Shek Kok New Territories Hong Kong

AUDITOR

Ernst & Young Registered Public Interest Entity Auditor

LEGAL ADVISER

As to Hong Kong law DeHeng Law Offices (Hong Kong) LLP

As to PRC law Zhong Lun Law Firm

HONG KONG SHARE REGISTRAR

Computershare Hong Kong Investor Services Limited Shops 1712–1716 17th Floor, Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong

COMPANY WEBSITE

www.sinomab.com

STOCK CODE

3681

Chairman's Statement

Dr. Shui On LEUNG

Chairman, Executive Director and Chief Executive Officer

Dear valued Shareholders,

On behalf of the Board, I hereby present the interim report of the Company (together with its subsidiaries) for the six months ended 30 June 2024.

BUSINESS OVERVIEW

Since our establishment, we have been continuously adhering to our philosophy of driving innovation by identifying and developing first-in-class drug candidates and specialising in innovative treatment of immunological diseases to solidify our leading position in our industry. We are currently at the start of a new Biotech 3.0 era, which may see a shift back to drug development for prevalent diseases, such as age-related diseases, autoimmune diseases and mental health disorders. It has always been our research objective to break into new frontiers of drug discovery. We aim to create genuine therapeutic advance by improving the immunogenic profiles of therapies and reducing the burden of complex manufacturing and long treatment timelines through innovation with new mechanisms of action and new modalities. We will persist with our vision to develop breakthrough therapies that benefit patients and communities.

During the first half of 2024, the Biologics License Application ("BLA") application for our flagship product, SM03 (Suciraslimab), was undergoing the final review stage by the National Medical Products Administration of the People's Republic of China ("PRC") (the "NMPA"), including the completion of two necessary inspections, Clinical Sites inspection and Good Manufacturing Practice ("GMP") inspection at our Haikou production base required by the NMPA in January this year. As our self-developed and a global first-in-class anti-CD22 monoclonal antibody ("mAb")

Chairman's Statement

for the treatment of rheumatoid arthritis ("RA"), Suciraslimab is expected to be our first commercially available drug. Our on-going Phase III extension study continues to demonstrate an enduring efficacy of Suciraslimab with its continuously increasing response rate over time, suggesting a long-term sustainable benefit of using Suciraslimab when compared to the use of conventional biologics treatments which are often associated with therapeutic resistance over time. We look forward to Suciraslimab leading us into the next commercialisation chapter of our drug innovation journey.

In the meantime, we have made great progress on the development of our key product, SM17, a global first-in-class, humanised mAb targeting the receptor of interleukin 25 (IL-25) with the potential for treating atopic dermatitis ("AD"), asthma, idiopathic pulmonary fibrosis (IPF) and other immunological disorders.

• • During the Reporting Period, we obtained the clinical report for SM17's first-in-human Phase I clinical trial in the U.S. in the first quarter of 2024, and completed Phase 1a bridging study on healthy subjects in China in May 2024. Both showed a good safety profile, demonstrating superiority over JAK1 inhibitors in safety and tolerability.
• • On 9 April 2024, our study results of SM17 pre-clinical work, demonstrating SM17 to be as effective as JAK1 inhibitor in treating AD in mice, were published in Allergy, an official journal of the European Academy of Allergy and Clinical Immunology (EAACI).
• • We also initiated a phase 1b proof-of-concept study in China with the first patient successfully dosed on 5 June 2024 to validate the preclinical studies results. The Phase 1b clinical trial aims to explore the preliminary efficacy of SM17 in AD patients, as well as to study safety, tolerability and pharmacokinetics profile of SM17.
• • The potential and research plan of SM17 for the treatment of AD was also highly recognised by the Hong Kong Science and Technology Parks Corporation with a HK\$6.5 million subsidy granted in December 2023 to the Company for the clinical trial of SM17 for AD.

We have been strategically and actively exploring partnership and collaboration opportunities to accelerate the development of our innovative drug candidates. Through our business development activities, we look to build an extensive network across the industry on a global basis.

OUTLOOK

Despite the complex international environment, we are optimistic about Hong Kong's biotechnology industry. As highlighted by the Central Government in accelerating the development of "new quality productive forces" earlier this year, along with the abiding support from the Hong Kong Government in procuring the development of Hong Kong into a Health & Medical Innovation Hub, favorable policies have been implemented by the Hong Kong Government in this respect. As the first Hong Kong-based 18A-listed biopharmaceutical company, we will continue to build on our core competence of innovation to achieve more breakthroughs in our drug development.

We are looking forward to Suciraslimab's commercial journey to profitability upon obtaining NMPA's marketing approval. We also look forward to confirming SM17's differentiating therapeutics and safety properties that compete favourably with existing treatment options in the proof of concept clinical trial in AD that was initiated in the Reporting Period. We are committed to maximising the value for our stakeholders and upholding our vision to become a leading global biopharmaceutical company for the development of novel drugs to fulfill unmet medical needs. I, on behalf of the Board and management of the Company, would like to express our sincere gratitude to all shareholders for your enduring support and attention, and to our staff for their unremitting effort.

Chairman, Executive Director and Chief Executive Officer Dr. Shui On LEUNG 19 August 2024

OVERVIEW

We are the first Hong Kong-based listed biopharmaceutical company dedicated to the research, development, manufacturing and commercialisation of therapeutics, primarily first-in-class monoclonal antibody ("mAb")-based biologics, for the treatment of immunological diseases. We strive to become a leading global biopharmaceutical company for the development of novel drugs to fulfil unmet medical needs through our Hong Kong-based innovative research and development ("R&D") team and PRC-based manufacturing capabilities. We have been dedicated to R&D since our inception, and have built a pipeline of mAb-based biologics and new chemical entities addressing a plethora of immunological diseases. Our vision is to become a global leader in the innovation of therapeutics for immunological and other debilitating diseases.

Our flagship product, SM03 (Suciraslimab), is a global firstin-class anti-CD22 mAb for the treatment of rheumatoid arthritis ("RA") and other immunological and neuroimmunological diseases, such as systemic lupus erythematosus ("SLE"), Sjogren's syndrome ("SS"), mild cognitive impairment ("MCI") due to Alzheimer's disease, as well as Alzheimer's disease. As announced by the Company on 26 April 2023, Suciraslimab met its primary endpoint in a Phase III clinical study for the treatment of RA in China. Our Biologics Licence Application ("BLA") was accepted by the National Medical Products Administration of the People's Republic of China ("PRC") (the "NMPA") in September 2023 for approval for commercialisation of Suciraslimab which will usually happen 10 to 12 months after the BLA submission if no additional information is requested by the NMPA. Clinical sites inspection and Good Manufacturing Practice ("GMP") inspection at our Haikou production base, the two necessary procedures required as part of the BLA approval process, were completed in January 2024.

Our key product, SM17, is a global first-in-class, humanised mAb targeting the receptor for IL-25. The compound has the potential for treating atopic dermatitis ("AD"), asthma, idiopathic pulmonary fibrosis ("IPF") and other immunological disorders. R&D work of SM17 was carried out in both the U.S. and China. SM17 obtained the Investigational New Drug ("IND") application for the treatment of asthma from the U.S. Food and Drug Administration ("FDA") in March 2022. Clinical report for the U.S. first-in-human Phase I clinical study was obtained in the first quarter of 2024, data from which demonstrated an overall favourable safety, tolerability and pharmacokinetics ("PK") profile for SM17. In April 2024, study results of SM17 pre-clinical work, demonstrating SM17 to be as effective as JAK1 inhibitor in treating AD in mice, were published in Allergy, an official journal of the European Academy of Allergy and Clinical Immunology (EAACI). In China, SM17 obtained the IND approvals for the treatment of asthma and AD from the NMPA on 11 August 2023 and 8 September 2023, respectively. The first patient was successfully dosed in a Phase 1b clinical trial for the treatment of AD on 5 June 2024.

Another key product, SN1011, is a third-generation, covalent reversible Bruton's tyrosine kinase ("BTK") inhibitor. SN1011 was designed to exhibit high selectivity with prolonged but controlled drug exposure to achieve superior efficacy and good safety profile for the potentially long-term treatment of patients with chronic immunological disorders. SN1011 obtained four IND approvals from the NMPA for the treatment of SLE, pemphigus, multiple sclerosis ("MS") and neuromyelitis optica spectrum disorders ("NMOSD").

Our other drug candidate, SM06, is a second-generation, humanised anti-CD22 antibody derived from Suciraslimab with a similar mechanism of action. Our in-house in vitro studies demonstrated SM06 to have potentially enhanced efficacy in enacting immunomodulatory effects. The compound is at the IND enabling stage, and is currently in the process of optimisation for clinical studies.

BUSINESS REVIEW

The Group is principally engaged in research and development of pharmaceutical products.

The operating performance and the progress of the Group's clinical projects during the period under review and future prospects are contained in the preceding Chairman's Statement and in this section.

The Group has no immediate plans for material investments or capital assets, other than as disclosed in the section headed "Business Overview" in the preceding Chairman's Statement and in this section.

A brief review on the business operation and clinical projects currently being undertaken by the Group is set out below.

PROGRESS OF CLINICAL PROJECTS

Product Pipeline

Flagship Product

SM03 (Suciraslimab)

Our self-developed SM03 (Suciraslimab) is a potential global first-in-class anti-CD22 mAb for the treatment of rheumatoid arthritis (RA) and other immunological and neuroimmunological diseases, such as systemic lupus erythematosus (SLE), Sjogren's syndrome (SS), mild cognitive impairment (MCI) due to Alzheimer's disease, as well as Alzheimer's disease. Suciraslimab adopts a novel mechanism of action, which differentiates itself from the current treatments available in the market.

On 26 April 2023, the Company announced that Suciraslimab met its primary endpoint in a Phase III clinical study for the treatment of RA in China. The Phase III clinical study is a randomised, multi-centre, double-blind, placebocontrolled study to confirm the clinical efficacy and safety in patients with moderate-to-severe active RA who had an inadequate response to methotrexate (MTX). According to the assessment of the topline data, Suciraslimab was effective in suppressing disease activity and alleviating symptoms of active RA patients receiving methotrexate therapy. Suciraslimab Phase III clinical trial for RA completed its enrollment of 530 patients, exceeding the original target of 510 patients, on 31 December 2021. A Phase III extension study has been conducted. As of 30 June 2024, there were 57 patients in the extension study. The extension study allows the Company to have a prolonged observation on both the efficacy and safety profile of Suciraslimab. As at the date of this interim report, clinical data collected for the extension study demonstrated an enduring efficacy of Suciraslimab with its continuously increasing response rate over time, suggesting a long-term sustainable benefit of using Suciraslimab when compared to the use of conventional biologics treatments which are often associated with therapeutics resistance over time.

Our BLA of Suciraslimab for the treatment of RA was accepted by the NMPA in September 2023 for approval for commercialisation of Suciraslimab which will usually happen 10 to 12 months after the BLA submission if no additional information is requested by the NMPA. Clinical site inspection and GMP inspection which are the necessary inspection procedures for BLA required by the NMPA were completed in January 2024. We expect Suciraslimab to be our first commercially available drug candidate.

Upon the successful commercial launch of Suciraslimab, clinical development in other indications, including SLE, MCI due to Alzheimer's disease and Alzheimer's disease will be further advanced to broaden the therapeutic uses of Suciraslimab for addressing other unmet medical needs.

Key Products

SM17

SM17 is a global, first-in-class, humanised, IgG4-k mAb which is capable of modulating Type II allergic reaction by targeting the receptor of a critical "alarmin" molecule interleukin 25 (IL-25). SM17 could suppress T helper 2 (Th2) immune responses by binding to IL-25 receptor (also known as IL-17RB) on Type 2 Innate Lymphoid cells (ILC2s) and Th2 cells, blocking a cascade of responses induced by IL-25 and suppressing the release of the downstream Th2 cytokines such as IL-4, IL-5, IL-9 and IL-13. IL-25 is classified as "alarmin" which is overexpressed in biopsy tissues of patients with asthma, atopic dermatitis (AD) and idiopathic pulmonary fibrosis (IPF). Our in vitro studies clearly demonstrated that SM17 can suppress IL-25 induced type 2 immunity and the underlying mechanism supports its potential benefits in treating allergic and autoimmune diseases, such as AD, asthma and IPF.

When we evaluated SM17 in two murine asthma models induced by ovalbumin or house dust mite, blockage of IL-25 signaling pathway by SM17 offered protection against airway resistance and type 2 immune response in the lungs. SM17 also significantly reduced immune cell infiltration into the lung and serum levels of IgE. In another 1-Fluoro-2, 4-dinitrobenzene (DNFB) driven murine atopic dermatitis model, SM17 administration could attenuate epidermal thickening and improve skin condition by suppressing Th2 immune responses and immune cell infiltration into the skin layers. We expect that targeting upstream mediators of the Th2 inflammatory cascade, such as the receptor for IL-25, will have a broader effect on reducing airway resistance as well as skin inflammation.

R&D work of SM17 was carried out in both the U.S. and China. In the U.S., an IND application for asthma was submitted in February 2022 and approved by the FDA in March 2022. The first healthy subject was successfully dosed in a first-in-human Phase I clinical trial (NCT05332834) in the U.S. in June 2022. The Phase I clinical study consisting of single ascending dose ("SAD") and multiple ascending dose ("MAD") cohorts to evaluate its safety, tolerability and PK profile in healthy subjects was completed with the Last Subject Last Visit (LSLV) completed in September 2023. The total number of healthy subjects enrolled in this Phase I study was 77. The clinical report was obtained in the first quarter of 2024, data from which demonstrated an overall favourable safety, tolerability and PK profile for SM17. Study results of SM17 pre-clinical work, demonstrating SM17 to be as effective as JAK1 inhibitor in treating AD in mice, were published in Allergy, an official journal of the European Academy of Allergy and Clinical Immunology (EAACI), on 9 April 2024.

In China, an IND application for asthma was submitted in May 2023 and was approved by the NMPA on 11 August 2023, while another IND application for AD was submitted in June 2023 and was approved by the NMPA on 8 September 2023. The first cohort of healthy subjects was successfully dosed in a Phase 1a clinical trial in China on 25 November 2023, and the Last Subject Last Visit (LSLV) was completed in May 2024. On 5 June 2024, the first patient was successfully dosed in a Phase 1b clinical trial of SM17 for the treatment of AD, and the trial is currently progressing according to the planned schedule. The phase 1b clinical trial aims to explore the preliminary efficacy of SM17 in AD patients, as well as to study safety, tolerability and PK profile of SM17.

The compound has the potential for treating AD, asthma, IPF and other immunological disorders.

Please also refer to the Company's announcements dated 16 February 2022, 14 March 2022, 15 June 2022, 22 May 2023, 12 June 2023, 14 August 2023, 11 September 2023, 27 November 2023 and 11 June 2024 for further information about the latest R&D progress of SM17.

SN1011

SN1011 is a third-generation, covalent reversible BTK inhibitor designed to exhibit high selectivity with prolonged but controlled drug exposure to achieve superior efficacy and good safety profile for the potentially long-term treatment of systemic lupus erythematosus (SLE), pemphigus, multiple sclerosis (MS), neuromyelitis optica spectrum disorder (NMOSD) and other rheumatology or neuro-immunological diseases. SN1011 differentiates from existing BTK inhibitors currently available in the market, such as Ibrutinib, in terms of mechanism of action, affinity, selectivity and safety.

The Phase I study (first-in-human) in Australia was conducted in 2019 while Phase I study (first-in-human) in China was conducted and completed in 2021. The studies demonstrated a good safety and PK profile. SN1011 obtained four IND approvals from the NMPA for the treatment of SLE, pemphigus, MS and NMOSD on 27 August 2020, 23 June 2021, 19 April 2022 and 22 August 2022, respectively. Please also refer to the Company's announcements dated 14 November 2019, 29 January 2020, 29 June 2020, 1 September 2020, 15 January 2021, 24 June 2021, 23 July 2021, 7 February 2022, 20 April 2022, 9 June 2022 and 23 August 2022 for further information about the latest R&D progress of SN1011.

Other drug candidates

SM06

SM06 is a second-generation, anti-CD22 antibody that is humanised using our proprietary framework-patching technology. SM06 is a humanised version of SM03 (Suciraslimab) with a similar mechanism of action. Our inhouse in vitro studies demonstrated SM06 to have potentially enhanced efficacy in enacting immunomodulatory effects. We are currently in the process of optimising the chemistry, manufacturing and control processes (CMC) for SM06.

SM09

SM09 is a framework-patched, humanised anti-CD20 antibody that targets an epitope different from that of other market-approved anti-CD20 antibodies such as rituximab, obinutuzumab and ofatumumab for the treatment of non-Hodgkin's lymphoma (NHL) and other auto-immune diseases.

COLLABORATION

We are committed to collaborating with our partners to develop the most innovative therapies to address unmet medical needs in the area of immunological diseases. Given our strong in-house research and development capabilities, we have established global collaboration relationships with reputable companies and scientific research institutions.

LifeArc is a UK-based medical research charity, whose mission is to pioneer new ways to turn great science into great patient impact. We have been entrusted by LifeArc to further develop and commercialise SM17 in all fields and worldwide. According to public information, LifeArc provides intellectual property identification, technology development, early stage drug discovery and antibody humanisation services for academia, biotechnology and pharmaceutical organisations and charities, aiming to propel promising medical researches into viable and accessible patient treatments.

Everest Medicines Limited is a listed biopharmaceutical company (stock code: 1952.HK) that integrates discovery, licensing, clinical development, commercialisation and manufacturing of potentially novel or differentiated therapies to address critical unmet medical needs in initially Asia Pacific markets, and eventually around the world. In 2021, we entered into a licence agreement with Suzhou Sinovent Pharmaceuticals Co., Ltd.* (蘇州信諾維醫藥科技股份有限 公司), (now known as Evopoint Biosciences Co., Ltd.* (蘇州 信諾維醫藥科技股份有限公司)), together with the Company as licensor), and Everest Medicines II (HK) Limited, a wholly owned subsidiary of Everest Medicines Limited, as licensee, to out-license the right to develop and commercialise SN1011 globally for the treatment of renal diseases.

* for identification purposes only

PRODUCTION

We have a production base in Haikou, Hainan Province. We are also constructing our second production base in Suzhou, Jiangsu Province.

Haikou Production Base

We carry out our manufacturing activities at our Haikou production base, where we manufacture our drug candidates for pre-clinical research, clinical trials and future large-scale commercial production. The Haikou production base occupies a total operational area of approximately 19,163 square metres with a production capacity of 1,200 litres, which is sufficient for clinical and initial marketing needs. The plant has an operational area consisting of a clean area for processing, a controlled-not-classified (CNC) area for supporting activities, utility rooms, quality control laboratories, warehouse and administrative offices and R&D laboratories for on-going and new product development projects. GMP inspection at our Haikou production base, a necessary requirement for BLA approval, was completed in January 2024.

Suzhou Production Base

As part of our commercialisation plan, we purchased a piece of land of 43,158 square metres in Suzhou Dushu Lake Higher Education Town, China in June 2020. The land is used for constructing the Group's PRC headquarters and another production base, and the total floor area would be approximately 75,000 square metres. The new production base is designed as commercial-scale manufacturing facilities and is currently under construction. The superstructure work was completed in December 2021. Completion inspection is expected to be approved later in 2024 for the grant of Real Estate Ownership Certificate.

R&D ACTIVITIES OF FLAGSHIP PRODUCT

Our flagship product SM03 (Suciraslimab) is a global first-inclass anti-CD22 mAb for the treatment of RA, and other immunological and neuro-immunological diseases such as SLE, SS, MCI due to Alzheimer's disease as well as Alzheimer's disease. Suciraslimab is expected to be our first commercially available drug candidate in RA. We demonstrated that Suciraslimab adopts a novel mechanism of action which differentiates itself from the current treatments available in the market. Our experimental evidence indicates that upon binding to CD22, Suciraslimab converts the configuration of CD22, changing it from a cisbinding configuration to a trans-binding configuration. Conversion of cis-binding CD22 to trans-binding CD22 allows the B cell to differentiate self from non-self and modulates B cells that trigger autoimmune attacks on autologous tissues, thereby alleviating symptoms in autoimmune diseases such as RA.

On 26 April 2023, the Company announced that Suciraslimab met its primary endpoint in a Phase III clinical study for the treatment of RA in China. According to the assessment of the topline data, Suciraslimab was effective in suppressing disease activity and alleviating symptoms of active RA patients receiving methotrexate therapy. The BLA for the treatment of RA was accepted by the NMPA in September 2023 for approval for commercialisation of Suciraslimab which will usually happen 10 to 12 months after the BLA submission. Clinical sites inspection and GMP inspection at our Haikou production base, the two necessary procedures required as part of the BLA approval process, were completed in January 2024.

On 31 December 2021, Suciraslimab Phase III clinical trial for RA completed its enrollment of 530 patients, exceeding the target number. A Phase III extension study has been conducted, as of 30 June 2024, there were 57 patients in the extension study. The extension study allows the Company to have a prolonged observation on both efficacy and safety profile of Suciraslimab. As at the date of this interim report, clinical data collected for the extension study demonstrates an enduring efficacy of Suciraslimab with its continuously increasing response rate over time, suggesting a long-term sustainable benefit of using Suciraslimab when compared to the use of conventional biologics treatments which are often associated with therapeutics resistance over time.

The expenditure on the R&D activities of Suciraslimab primarily consisted of:

• • th i rd party contracting costs incurred under agreements with consultants, contract research organisations and clinical trial sites that conduct R&D activities on the Group's behalf;
• • costs associated with purchases of raw materials;
• • employee salaries and related benefit costs; and
• • expenses associated with inspection and maintenance of facilities, depreciation and amortisation, travel expenses, insurance, utilities and other supplies.

During the Reporting Period, the Group incurred approximately RMB33.7 million on the R&D activities of Suciraslimab.

Cautionary Statement required by Rule 18A.05 and 18A.08(3) of the Listing Rules:

The Company cannot guarantee that it will be able to ultimately develop and market Suciraslimab successfully.

INTELLECTUAL PROPERTY

Core Technology of Main Drugs (Products)

For SM03 (Suciraslimab), the Group has four invention patents granted and registered in the PRC, one of which is also applicable to SM06, and four invention patents which are granted and registered in the United States, all of which are also applicable to SM06.

For SN1011, the Group has one invention patent granted and registered in the United States, one invention patent granted and registered in the European Union and one invention patent granted and vested in Australia.

For SM09, the Group has two invention patents granted and registered in the PRC, three invention patents granted and registered in the United States, and one in each of various jurisdictions, including the European Union, India, Singapore and Japan.

During the Reporting Period, the Group filed one Patent Cooperation Treaty ("PCT") applications for SM18 and one PCT application for Suciraslimab. In addition, one invention patent was granted and registered in the PRC while two invention patents for Suciraslimab and SM06 were entering into the national phase during the Reporting Period.

As at 30 June 2024, the Group had four pending patent applications in the United States, five pending patent applications in the PRC, four pending patent applications in the European Union, and five pending PCT patent applications.

Well-known or Famous Trademarks

The Company conducts its business under the brand name of "SinoMab" ("中國抗體"). As at the end of the Reporting Period, the Group had various registered trademarks in Chinese mainland and Hong Kong, with multiple trademark applications pending approval in Chinese mainland.

Patents

Item	As at 30 June 2024	As at 31 December 2023
Number of invention patents owned by the Group*	67	35

* including patent pending and granted patent

HUMAN RESOURCES

As at 30 June 2024, the Group had a total of 214 employees in China, Hong Kong. For the Reporting Period, the Group incurred approximately RMB31.7 million employee costs (including directors' remuneration but excluding any contributions to pension scheme, director fees and share-based payment). Employees are important resources for the Group's sustainable operation and steady development. The Company has formulated policies related to employees' remuneration, rights and interests and conducted various staff training. The Company has also established its share award scheme and share option scheme, details of which are set out in "Other Information — Share Incentives" in this interim report.

R&D PERSONNEL

	Number at the end of the Reporting	Number at the beginning of the Reporting
Education level	Period	Period
Ph.D.	7	7
Master	28	27
Undergraduate or below	23	25
Total number of R&D personnel	58	59

The above number of R&D personnel does not include our employees in manufacturing, quality assurance or quality control for the clinically related operation.

FUTURE AND PROSPECTS

We strive to become a leading global biopharmaceutical company for the development of novel drugs to fulfil unmet medical needs through our Hong Kong-based innovative R&D team and PRC-based manufacturing capabilities. Our vision is to become a global leader in the innovation of therapeutics for immunological and other debilitating diseases.

Our portfolio of drug candidates encompasses the entire immunological field which, we believe, will enable us to provide comprehensive treatment options for field-wide indications to patients. We believe our dedication, experience and achievements in the field of immunology have expedited the process, and elevated the industry standard, for the discovery and development of novel therapeutics against a variety of immunological diseases. We have accumulated significant experience in the discovery of new treatment modalities for immunological diseases, which will allow us to better capture a substantial share of the immunological disease market. We believe that our strategic specialisation and dedicated focus on immunological diseases is an effective way to differentiate ourselves from our peers. By specialising in innovative treatments of immunological diseases, we seek to solidify our leading position in the field, thereby creating a higher barrier to entry for our peers to compete with us in the development of first-in-class drug candidates.

Further, our product pipeline is backed by our established full-spectrum platform integrating in-house capabilities across the industry chain, from our strong and independent target identification, drug candidate development, preclinical research, clinical trials, clinical production, quality control, quality assurance, regulatory approval and commercial-scale production up to the commercialisation stage, as well as all other processes in the discovery and development of our drug candidates. We believe that this full-fledged capability is matched by only a few biopharmaceutical companies in the Greater China region. With a diverse and expanding product pipeline, we believe that we are well positioned to become an industry leader in the development of treatments for immunological diseases.

The Group will continue to focus on the advancement of our flagship product SM03 (Suciraslimab) towards commercialisation, further develop our existing product pipeline, discover and develop novel drugs for the treatment of immunological diseases by leveraging our R&D capabilities, expand our production scale to support our product commercialisation and strengthen our global presence through leveraging our position as a Hong Kongbased biopharmaceutical company.

Apart from continuously expanding our product pipeline and advancing our clinical development, we will also continue to actively explore strategic collaboration opportunities. We have developed a pipeline of pre-clinical, clinical and preregistration stage first-in-class assets addressing various inflammatory and immunological diseases. To maximise the commercial values of our assets as well as to accelerate the development of our innovative drug candidates, we are open to collaboration, partnerships and licensing agreements with partners worldwide.

Clinical Development Plan

We will continue to advance clinical trials for SM03 (Suciraslimab) for RA and other autoimmune diseases. As previously mentioned, our BLA for Suciraslimab for the treatment of RA was accepted by the NMPA in September 2023. Upon BLA approval and the subsequent successful commercial launch of Suciraslimab, clinical development in other indications, including SLE, MCI due to Alzheimer's disease and Alzheimer's disease will be further advanced to broaden its therapeutic uses for addressing other unmet medical needs. Regulatory pathways to extrapolate the clinical indications of neuro-immunological diseases for Suciraslimab will also be sought. The initiation of an IND application and proof-of-concept Phase II clinical study for SLE in China is also in our plan.

In respect of SM17, the first-in-human Phase I clinical trial in the U.S. and was completed in 2023. The Last Subject Last Visit (LSLV) was completed in September 2023 and the total number of healthy subjects enrolled in the Phase I clinical trial was 77. The clinical report was obtained in the first quarter of 2024 which demonstrated an overall favourable safety, tolerability and PK profile for SM17. Two additional IND submissions, for the treatment of asthma and AD were filed with the NMPA in the first half of 2023 and were subsequently approved by the NMPA on 11 August 2023 and 8 September 2023, respectively. The first cohort of healthy subjects was successfully dosed in a Phase 1a clinical trial in China on 25 November 2023 and the Last Subject Last Visit (LSLV) was completed in May 2024. During the Reporting Period, the first patient was successfully dosed in a Phase 1b clinical trial in China for the treatment of AD. The Phase I clinical trial aims to evaluate s a f e t y , t o l e r a b i l i t y , i m m u n o g e n i c i t y , P K a n d pharmacodynamics ("PD") profiles of SM17 as well as to explore the preliminary efficacy of SM17 in healthy subjects and AD patients. We also plan to submit IND applications in both the U.S. and China for the treatment of IPF with SM17.

Pre-clinical R&D

We have built a pre-clinical R&D platform for studying pathogenesis of autoimmune diseases, as well as exploring and identifying treatments for them. Our internal R&D team will continue to discover novel mechanisms for treatments of multiple autoimmune disease areas for rheumatology, neuroimmunology, respiratory and dermatology. Our R&D team possesses the capability of generating pre-clinical pharmacology internally and is developing in-depth collaboration with well-known clinical KOLs from our ongoing clinical programs. By utilising established business and cooperation relationship with vendors and partners, the Company is in the process of generating and collecting the IND-enabling data package for our products under preclinical development, such as SM06, and will thereafter conduct pre-clinical studies to test their efficacies, safety and PK/PD, and fulfil other regulatory requirements.

Our SM06 is currently at the IND enabling stage and is in the process of optimisation for clinical trials. We will advance the first IND application process, aiming for a bio-better product development for known indications based on the good therapeutic potential of Suciraslimab, as well as further exploration into other immunological diseases.

The Company continues to optimise production and preclinical research for SM09. The Company will engage the NMPA and/or the FDA to initiate clinical trials upon completion of these pre-clinical researches.

Apart from the above mentioned SM06 and SM09, our potential drug candidates under pre-clinical stage also include SM18, SM32 and SM20/SM22.

Novel drug targets identification

The Company has been actively exploring novel targets identification and has developed a strong team of R&D talents with a mix of resources that instill an innovative culture at all levels. Led by the Chief Executive Officer of the Company, who also undertakes the function of the Chief Scientific Officer, the research team has established five strategic in-house platforms, namely, the "B-cell Therapeutic Platform", "Alarmins-pathway Therapeutic Platform", "Selective-T Cell Therapeutic Platform", "Neurological Disease Platform" and "Antibody Framework-Patching Humanisation Platform" that allow the Company to continuously identify novel drug targets and develop new antibody candidates, broadening and enriching our product pipelines for other autoimmune diseases with unmet medical needs. SM18, SM32 and SM20/SM22 are all candidates derived from the above platforms.

Production

As previously reported, the Group purchased a piece of land of 43,158 square metres in Suzhou Dushu Lake Higher Education Town in China in June 2020. The land is used for constructing the Group's PRC headquarters and another production base, and the total floor area would be approximately 75,000 square metres. The superstructure work was completed in December 2021. Completion inspection is expected to be approved in later 2024 for the grant of Real Estate Ownership Certificate.

Commercialisation and Partnerships

As of the Reporting Period, we have established a marketing team, and plan to continue to expand the sales and marketing team. In addition, we are actively exploring and identifying opportunities for collaboration and/or partnership, including but not limited to licensing in or licensing out, to enhance our sales and business development capabilities.

MARKET OVERVIEW

Rheumatoid Arthritis (RA)

According to Frost & Sullivan, the global market for autoimmune disease drugs is expected to increase from US\$120.5 billion in 2020 to US\$163.8 billion in 2030, at a compound annual growth rate (CAGR) of 3.1%. The overall scale of existing patients with autoimmune diseases in China is huge. According to "Rheumatoid Arthritis in China: A National Report of 2020" issued by the National Clinical Research Center for Dermatologic and Immunologic Diseases in October 2021, there are about 5 million RA patients in China. With the continuous improvement of the diagnosis and treatment rate of autoimmune diseases in China and the continuous progress of related medical technologies, the market size of RA in China is expected to expand rapidly. According to Frost & Sullivan, the RA therapeutics market in the PRC is expected to reach RMB32.8 billion by 2024 and RMB83.3 billion by 2030, or at a CAGR of 16.8%. The biologics market share in the RA therapeutics market in PRC is expected to increase from 43.4% in 2024 to 59.8% in 2030. We have been focusing on the R&D of mAb drugs in the field of autoimmune diseases for more than 20 years and our existing product pipeline covers all indications in the field of autoimmune diseases. We are one of a few biopharmaceutical companies in China with full-fledged capability that integrates allindustry functionalities, including R&D, production and commercialisation. Once Suciraslimab receives NMPA marketing approval, leveraging the first-mover advantage of the first-in-class status of Suciraslimab and its competitive advantage in its better safety profile over existing and potential market competitors, coupled with our targeted sales and marketing strategy and execution, we believe that we can successfully launch Suciraslimab, which will be an important milestone in the development of the Group.

Atopic Dermatitis (AD)

As a long-standing chronic disease, new cases of AD are growing rapidly globally with broad market potential. Patients with AD have an increasing all-cause mortality rate and disease-specific mortality rate in diseases, such as infections, respiratory diseases, gastrointestinal diseases, and oncological diseases. Currently approved therapies for AD, including biologics, can significantly improve eczema area and severity index and patient's quality of life. However, there is still an unmet medical need for patients showing irresponsiveness to those approved therapies. According to Frost & Sullivan, there were approximately 65.7 million AD patients in China in 2019 with an expected grow to 81.7 million in 2030, of which 30% being moderate-to-severe patients. The AD medicine market in China was valued at US\$600 million in 2019, and is expected to reach US\$1.5 billion in 2024, further increasing to US\$4.3 billion in 2030. According to a report by Grand View Research, Inc., the global market size for AD is estimated to reach US\$27.7 billion by 2030. We believe the mechanism of action of SM17 by targeting upstream of the Th2 inflammatory cytokine pathway, such as IL-25 receptor, will have broad effects on skin inflammation, implicating a great potential for SM17 to be a differentiating, safer and more effective product for the treatment of AD.

Asthma

The number of asthma patients worldwide is increasing year by year, and a large patient base is in urgent need of effective therapeutic drugs. According to Frost & Sullivan, the number of asthma patients worldwide is expected to increase to approximately 860 million in 2030, of which 78.1 million will be in China, a country with a higher growth rate than that for the global patient population. Severe, uncontrolled asthma patients are at risk of recurrent asthma exacerbations and hospitalisations, and uncontrolled severe asthma is associated with increased mortality/morbidity, diminished quality of life and increased health expenditures. Current approved therapies for severe asthma, including biologics, can reduce asthma exacerbations to a certain extent. However, there is still an unmet medical need for additional effective therapies, particularly for patients who do not respond to current treatments. We believe the mechanism of action of SM17 by targeting upstream of the Th2 inflammatory cytokine pathway, such as IL-25 receptor, will have broad effects on airway inflammation, which is expected to provide a new therapeutic channel with efficacy and safety for asthma diseases and bring relief and treatment to asthma patients.

STRATEGIC IN-HOUSE PLATFORMS FOR ESTABLISHING STRONG PIPELINE

We have developed several proprietary, innovative technological and therapeutic platforms, allowing us to identity novel antibody candidates that are specific for novel targets and have the potential to achieve therapeutic effects via novel mechanisms of actions.

B-cell Therapeutic Platform

The Company was established with an initial focus on developing therapeutics that target B cells. As more and more data accumulated and the functions of these B cell antigens/targets and the roles of B cells played in the immune system were better understood, B cells' potentials for treating autoimmune diseases has become prominent forming our bases for "B cell therapy approach". There are possibilities of use in combination of our different products developed on our B cell therapeutic platform in the future. These antigens and targets include:

• a. CD22 our SM03 (Suciraslimab) and SM06, each an anti-CD22 antibody, were developed under our B-cell therapeutic platform.
• b. CD20 our SM09, a novel, framework-patched, humanised anti-CD20 antibody, was developed under our B-cell therapeutic platform.
• c. BTK our SN1011, a third-generation covalent reversible BTK inhibitor, was developed to maximise the therapeutic benefits of B cell therapy.

Alarmins-pathway Therapeutic Platform

The immune system is an interplay between different cell lineages and factors, but the majority of which include B cells, T cells and cytokines. Albeit our good coverage on B cell specific targets, there are other areas we need to fill in order to address other immune related ailments. While most cytokines are well studied, and products against which have been approved, there emerges a new class of factors known as alarmins that are upstream of the immune pathway and have not been well studied. These alarmins play crucial roles in autoimmune diseases involving the respiratory tract and dermatological tissues such as asthma, AD, IPF, and so on.

IL-25 is one of the three alarmins that targets a particular receptor called IL-17RB. Our SM17 is a humanised, IgG4-k mAb targeting the receptor for IL-25 (also known as IL-17RB), which was developed under our alarmins-pathway therapeutic platform.

Selective-T Cell Therapeutic Platform

Our pipeline covers B cells, alarmins/cytokines, and another major piece in the immunotherapy portfolio — T cells. The T-cell associated receptor is not well researched in the biopharma area as its function is promiscuous. We have developed a platform to isolate antibodies that have selective binding to T-cell associated receptors, resulting in the identification of a battery of antibodies with differentiated functionality covering a wide range of immunological diseases.

Neurological Disease Platform

In 2019, there was a paper published in the journal Nature that demonstrated that anti-CD22 antibody would have therapeutic effects on degenerative neurological disease in a murine model. We researched the possibility of using SM03 (Suciraslimab) for treating MCI due to Alzheimer's disease and Alzheimer's disease and found that CD22 is significantly expressed in microglia and other neurological cells.

The discovery that our anti-CD22 antibody can induce the internalisation of Aβ protein has led to the development of bispecific antibodies that target anti-inflammatory cell surface antigens and Aβ protein for treating Alzheimer's disease and other neurological diseases. Product candidates are descendants of the SM03 (Suciraslimab)/SM06 lineage.

Antibody Framework-Patching Humanisation Platform

Most antibodies are produced in a murine background, and antibody humanisation (a genetic engineering approach) is needed to convert the murine sequence into human sequence without affecting the affinity and specificity of the original antibody (parent antibody). We employ a novel approach known as "framework-patching" to introduce "human-ness" in a functional perspective (functional humanisation). Our SM06 and SM09 antibodies were humanised using this novel, proprietary technology unique to the Company.

FINANCIAL REVIEW

Other income and gains

Our other income and gains consist primarily of bank interest income, changes in fair value on a financial asset at fair value through profit or loss and government grants. Total other income and gains were approximately RMB4.3 million for the Reporting Period, representing a decrease of approximately RMB2.8 million from the six months ended 30 June 2023, which was mainly due to a decrease in government grants of approximately RMB2.3 million.

R&D costs

	Six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Laboratory consumables and experiment costs	26,120	34,336
Employment costs	18,984	23,368
Others	9,931	9,046
	55,035	66,750

Our R&D costs mainly include laboratory consumables and experiment costs, employment costs of R&D employees, depreciation of right-of-use assets relating to leases of research facilities and depreciation of research and testing equipment.

For the six months ended 30 June 2024 and 2023, we incurred R&D costs of approximately RMB55.0 million and RMB66.8 million, respectively. The decrease in R&D costs during the Reporting Period was mainly attributable to (i) a decrease in laboratory consumables and experiment costs of approximately RMB8.2 million after acceptance of BLA for SM03 (Suciraslimab) in September 2023 and receiving the clinical report for SM17's first-in-human Phase I clinical trial in the U.S. in the first quarter of 2024, and (ii) a decrease in employment costs of R&D employees of approximately RMB4.4 million mainly due to simplification of our clinical team for better efficiency.

Administrative expenses

Our administrative expenses primarily consist of employee costs of administrative personnel, depreciation of right-of-use assets relating to leases of office space, depreciation and amortisation, rental and property management fees, consulting and auditing fees, legal and other professional advisory service fees, office expenses, transportation costs and others.

For the six months ended 30 June 2024 and 2023, our total administrative expenses were approximately RMB34.2 million and RMB50.2 million, respectively. The decrease was mainly due to (i) a decrease in the non-cash share-based payment expenses of approximately RMB7.5 million, and (ii) a decrease in deprecation and amortisation expenses of approximately RMB3.9 million in the Reporting Period.

Other expenses

For the six months ended 30 June 2024, there was a foreign exchange loss, net, of approximately RMB2.9 million. During the Reporting Period, most of the Group's cash and cash equivalents were denominated in RMB. The majority of the exchange loss, which was caused by the difference of the functional currency of the Hong Kong headquarters in HKD and the presentation currency of the Group in RMB, did not represent the Company's actual loss.

Liquidity and capital resources

The Group has always adopted a prudent treasury management policy. The Group places strong emphasis on having funds readily available and accessible and is in a stable liquidity position with sufficient funds in standby banking facilities to cope with daily operations and meet its future development demands for capital.

As at 30 June 2024, total funding available to use including cash and cash equivalents, pledged and restricted deposits and structured deposit is RMB220.0 million, compared to RMB233.1 million as at 31 December 2023.

	30 June	31 December
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(audited)
Cash and cash equivalents	153,617	203,664
Pledged and restricted deposits	56,353	29,439
Structure deposit (included in the financial assets at fair
value through profit or loss)	10,052	–
Total funding available to use	220,022	233,103

The net decrease of approximately RMB13.1 million was mainly due to (i) the net proceeds from issue of shares of approximately RMB56.6 million; (ii) the increase in net bank borrowings of approximately RMB43.9 million, offset by (iii) spending on capital expenditures of approximately RMB28.1 million and (iv) the net cash used in operating activities of approximately RMB70.6 million in the Reporting Period.

The following table sets forth a condensed summary of the Group's interim condensed consolidated statement of cash flows for the periods indicated and analysis of balances of cash and cash equivalents for the periods ended indicated:

	Six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Net cash flows used in operating activities	(70,587)	(62,750)
Net cash flows used in investing activities	(76,390)	(61,942)
Net cash flows from financing activities	93,446	42,044
Net decrease in cash and cash equivalents	(53,531)	(82,648)
Cash and cash equivalents at the beginning of the period	203,664	345,712
Effect of foreign exchange rate changes, net	3,484	19,146
Cash and cash equivalents at the end of the period	153,617	282,210
Analysis of balances of cash and cash equivalents
Cash and cash equivalents as stated in the interim condensed consolidated
statement of financial position	153,617	286,463
Bank balances restricted for special purpose	–	(4,253)
Cash and cash equivalents as stated in the interim condensed consolidated
statement of cash flows	153,617	282,210

As at 30 June 2024, cash and cash equivalents were mainly denominated in Renminbi, United States dollars and Hong Kong dollars.

Bank Borrowings and gearing ratio

As at 30 June 2024, the Group's outstanding borrowings of RMB423.8 million (31 December 2023: RMB391.4 million) were denominated in RMB and at the effective interest rate ranging from 3.15% to 3.90% (31 December 2023: 3.30% to 4.05%) per annum.

As at 30 June 2024, the amount of unutilised banking facilities of the Group is approximately RMB543.7 million.

The Group monitored capital using gearing ratio. Gearing ratio is calculated using interest-bearing bank borrowings less total funding available to use divided by total equity and multiplied by 100%. As at 30 June 2024, the gearing ratio was 73.6% (31 December 2023: 53.5%).

Foreign Exchange Risk

Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between RMB and other currencies in which the Group conducts business may affect the Group's financial condition and results of operations.

In response to the foreign exchange risk, the Company seeks to limit its exposure to foreign currency risk by minimising its net foreign currency position to reduce the impact of the foreign exchange risk on the Company.

Share Capital

During the Reporting Period, a total of 56,834,719 new ordinary shares of the Company were issued at a subscription price of HK\$1.29 per share in accordance with fifteen subscription agreements entered into by the Company with fifteen subscribers. Further details of the said new ordinary shares of the Company are disclosed in note 14 to the interim condensed consolidated financial statements.

Loss Per Share

The basic and diluted loss per share are RMB0.08 for the six months ended 30 June 2024 (30 June 2023: RMB0.13).

The calculations of basic and diluted loss per share are based on:

	Six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Loss
Loss attributable to ordinary equity holders of the parent	(90,622)	134,096

	Six months ended 30 June	Number of shares
	2024 (unaudited)	2023 (unaudited)
Shares Weighted average number of ordinary shares in issue during the period	1,071,475,873	1,017,964,900

Pledge of Assets

As at 30 June 2024, land use right and construction in progress of net carrying amount of approximately RMB327.0 million was pledged to secure the bank loan borrowed by the Group (31 December 2023: RMB323.6 million). In accordance with the agreement with the bank, the maximum amount of pledge is RMB158.4 million.

Capital Commitments

Particulars of capital commitments of the Group as at 30 June 2024 are set out in note 15 to the interim condensed consolidated financial statements.

Contingent Liabilities

As at 30 June 2024, the Group had no contingent liabilities (31 December 2023: Nil).

DIVIDEND

No dividend was paid or declared by the Company for the Reporting Period.

MATERIAL ACQUISITIONS OR DISPOSALS OF SUBSIDIARIES OR ASSOCIATES

During the Reporting Period, there were no material acquisitions or disposals of subsidiaries or associates of the Company.

FUTURE PLANS FOR MATERIAL INVESTMENTS OR CAPITAL ASSETS

During the Reporting Period and as at the date of this interim report, there were no future plans approved by the Group for any material investments or capital assets.

SIGNIFICANT INVESTMENTS HELD AND DISPOSED

The Group did not have any significant investment which accounted for more than 5% of the Group's total assets as at 30 June 2024.

CHANGE IN USE OF PROCEEDS

As reported in the announcement dated 19 August 2024, the Board resolved to change the use of unutilised net proceeds from listing. The change in use of proceeds was made to facilitate efficient allocation of financial resources and strengthen the future development of the Group. Further details are disclosed under paragraph headed "USE OF PROCEEDS FROM GLOBAL OFFERING" in the "Other Information" section to this Interim Report.

Independent Review Report

Ernst & Young 27/F, One Taikoo Place, 979 King's Road, Quarry Bay, Hong Kong 安永會計師事務所 香港鰂魚涌英皇道979號 太古坊一座27樓

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Independent review report To the Board of Directors of SinoMab BioScience Limited (Incorporated in Hong Kong with limited liability)

INTRODUCTION

We have reviewed the interim financial information set out on pages 24 to 44, which comprises the condensed consolidated statement of financial position of SinoMab BioScience Limited (the "Company") and its subsidiaries (the "Group") as at 30 June 2024 and the related condensed consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the six-month period then ended, and explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard 34 Interim Financial Reporting ("HKAS 34") issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). The directors of the Company are responsible for the preparation and presentation of this interim financial information in accordance with HKAS 34. Our responsibility is to express a conclusion on this interim financial information based on our review. Our report is made solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the HKICPA. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with HKAS 34.

Ernst & Young Certified Public Accountants Hong Kong 19 August 2024

Interim Condensed Consolidated Statement of Profit or Loss

For the six months ended 30 June 2024

		Six months ended 30 June
		2024	2023
	Notes	RMB'000	RMB'000
		(unaudited)	(unaudited)
REVENUE	4	2,026	1,365
Cost of sales		(1,483)	(943)
Gross profit		543	422
Other income and gains		4,319	7,155
Research and development costs		(55,035)	(66,750)
Administrative expenses		(34,205)	(50,200)
Finance costs		(3,287)	(3,202)
Other expenses	5	(2,957)	(21,521)
LOSS BEFORE TAX	6	(90,622)	(134,096)
Income tax expense	7	–	–
LOSS FOR THE PERIOD		(90,622)	(134,096)
LOSS PER SHARE ATTRIBUTABLE TO
ORDINARY EQUITY HOLDERS OF THE PARENT
Basic and diluted (RMB)	9	(0.08)	(0.13)

Interim Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2024

	Six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
LOSS FOR THE PERIOD	(90,622)	(134,096)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not be reclassified to profit or loss
in subsequent periods:
Exchange differences on translation to the presentation currency	3,664	20,194
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD	(86,958)	(113,902)

Interim Condensed Consolidated Statement of Financial Position

30 June 2024

		30 June 2024	31 December 2023
	Notes	RMB'000	RMB'000
		(unaudited)	(audited)
NON-CURRENT ASSETS
Property, plant and equipment	10	486,762	463,914
Right-of-use assets		65,868	72,860
Intangible assets		1,173	1,844
Deposits		1,099	1,100
Other non-current assets		20,844	37,885
Total non-current assets		575,746	577,603
CURRENT ASSETS
Prepayments, deposits and other receivables		14,848	6,087
Financial assets at fair value through profit or loss	11	41,238	30,993
Pledged and restricted deposits	12	56,353	29,439
Cash and cash equivalents	12	153,617	203,664
Total current assets		266,056	270,183
CURRENT LIABILITIES
Other payables and accruals		85,471	101,395
Lease liabilities		11,441	4,663
Interest-bearing bank borrowings	13	105,784	66,588
Total current liabilities		202,696	172,646

Interim Condensed Consolidated Statement of Financial Position (continued)

30 June 2024

		30 June	31 December
		2024	2023
	Notes	RMB'000	RMB'000
		(unaudited)	(audited)
NET CURRENT ASSETS		63,360	97,537
TOTAL ASSETS LESS CURRENT LIABILITIES		639,106	675,140
NON-CURRENT LIABILITIES
Lease liabilities		44,183	54,750
Interest-bearing bank borrowings	13	317,993	324,807
Total non-current liabilities		362,176	379,557
Net assets		276,930	295,583
EQUITY
Equity attributable to owners of the parent
Share capital	14	1,790,094	1,725,211
Reserves		(1,513,164)	(1,429,628)
Total equity		276,930	295,583

Interim Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2024

			Shares held
			under share	Share-based		Exchange
		Share	award	payment	Capital	fluctuation	Accumulated	Total
		capital	scheme*	reserve*	reserve*	reserve*	losses*	equity
	Note	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
At 1 January 2024 (audited) Loss for the period Other comprehensive income for the period: Exchange differences on translation to the		1,725,211 –	(52,616) –	114,310 –	8,637 –	(9,729) –	(1,490,230) (90,622)	295,583 (90,622)
presentation currency		–	–	–	–	3,664	–	3,664
Total comprehensive loss for the period		–	–	–	–	3,664	(90,622)	(86,958)
Issue of shares Equity-settled share-based payment expenses	14	64,883 –	– –	– 3,422	– –	– –	– –	64,883 3,422
At 30 June 2024 (unaudited)		1,790,094	(52,616)	117,732	8,637	(6,065)	(1,580,852)	276,930

Interim Condensed Consolidated Statement of Changes in Equity (continued)

For the six months ended 30 June 2024

		Shares held
		under share	Share-based		Exchange
	Share	award	payment	Capital	fluctuation	Accumulated	Total
	capital	scheme	reserve	reserve	reserve	losses	equity
	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
At 1 January 2023 (audited)	1,725,211	(55,914)	98,450	8,637	(19,690)	(1,247,119)	509,575
Loss for the period	–	–	–	–	–	(134,096)	(134,096)
Other comprehensive income
for the period:
Exchange differences on translation
to the presentation currency	–	–	–	–	20,194	–	20,194
Total comprehensive loss
for the period	–	–	–	–	20,194	(134,096)	(113,902)
Equity-settled share-based payment
expense	–	–	10,465	–	–	–	10,465
At 30 June 2023 (unaudited)	1,725,211	(55,914)	108,915	8,637	504	(1,381,215)	406,138

* These reserve accounts comprise the consolidated reserves of RMB1,513,164,000 (31 December 2023: RMB1,429,628,000) in the interim condensed consolidated statements of financial position as at 30 June 2024.

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2024

	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
NET CASH FLOWS USED IN OPERATING ACTIVITIES	(70,587)	(62,750)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of items of property, plant and equipment	(28,099)	(60,245)
Prepayments for purchases of property, plant and equipment	–	(1,008)
Purchases of intangible assets	(30)	(64)
Increase in pledged deposits	(38,473)	–
Purchase of financial assets at fair value through profit or loss	(92,000)	(20,000)
Redemption of financial assets at fair value through profit or loss	82,212	20,000
Settlement of financial liabilities at fair value through profit or loss	–	(625)
Net cash flows used in investing activities	(76,390)	(61,942)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issue of shares	56,560	–
New bank loans	89,545	73,919
Repayment of bank loans	(45,550)	(15,000)
Principal portion of lease payments	(4,301)	(13,639)
Interest paid	(2,808)	(3,236)
Net cash flows from financing activities	93,446	42,044
NET DECREASE IN CASH AND CASH EQUIVALENTS	(53,531)	(82,648)
Cash and cash equivalents at the beginning of the period	203,664	345,712
Effect of foreign exchange rate changes, net	3,484	19,146
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	153,617	282,210
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS
Cash and bank balances	105,426	153,934
Non-pledged time deposits with original maturity of less than three months
when acquired	48,191	132,529
Cash and cash equivalents as stated in the interim condensed consolidated
statement of financial position	153,617	286,463
Bank balances restricted for special purpose	–	(4,253)
Cash and cash equivalents as stated in the interim condensed consolidated
statement of cash flows	153,617	282,210

30 June 2024

1. BASIS OF PREPARATION

The interim condensed consolidated financial information for the six months ended 30 June 2024 has been prepared in accordance with HKAS 34 Interim Financial Reporting. The interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2023.

The financial information relating to the year ended 31 December 2023 that is included in the interim condensed consolidated statement of financial position as comparative information does not constitute the Company's statutory annual consolidated financial statements for that year but is derived from those financial statements. Further information relating to those statutory financial statements required to be disclosed in accordance with section 436 of the Hong Kong Companies Ordinance is as follows:

The Company has delivered the financial statements for the year ended 31 December 2023 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance. The Company's auditors have reported on the financial statements for the year ended 31 December 2023. The auditor's report was unqualified; and did not contain a statement under sections 406(2), 407(2) or 407(3) of the Hong Kong Companies Ordinance.

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2023, except for the adoption of the following revised Hong Kong Financial Reporting Standards ("HKFRSs") for the first time for the current period's financial information.

Amendments to HKFRS 16	Lease Liability in a Sale and Leaseback
Amendments to HKAS 1	Classification of Liabilities as Current or Non-current
	(the "2020 Amendments")
Amendments to HKAS 1	Non-current Liabilities with Covenants
	(the "2022 Amendments")
Amendments to HKAS 7 and HKFRS 7	Supplier Finance Arrangements

The nature and impact of the revised HKFRSs are described below:

(a) Amendments to HKFRS 16 specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. Since the Group has no sale and leaseback transactions with variable lease payments that do not depend on an index or a rate occurring from the date of initial application of HKFRS 16, the amendments did not have any impact on the financial position or performance of the Group.

30 June 2024

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (continued)

The nature and impact of the revised HKFRSs are described below: (continued)

(b) The 2020 Amendments clarify the requirements for classifying liabilities as current or non-current, including what is meant by a right to defer settlement and that a right to defer must exist at the end of the reporting period. Classification of a liability is unaffected by the likelihood that the entity will exercise its right to defer settlement. The amendments also clarify that a liability can be settled in its own equity instruments, and that only if a conversion option in a convertible liability is itself accounted for as an equity instrument would the terms of a liability not impact its classification. The 2022 Amendments further clarify that, among covenants of a liability arising from a loan arrangement, only those with which an entity must comply on or before the reporting date affect the classification of that liability as current or non-current. Additional disclosures are required for noncurrent liabilities that are subject to the entity complying with future covenants within 12 months after the reporting period.

The Group has reassessed the terms and conditions of its liabilities as at 1 January 2023 and 2024 and concluded that the classification of its liabilities as current or non-current remained unchanged upon initial application of the amendments. Accordingly, the amendments did not have any impact on the financial position or performance of the Group.

(c) Amendments to HKAS 7 and HKFRS 7 clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity's liabilities, cash flows and exposure to liquidity risk. The disclosure of relevant information for supplier finance arrangements is not required for any interim reporting period during the first annual reporting period in which an entity applies the amendments. As the Group does not have supplier finance arrangements, the amendments did not have any impact on the interim condensed consolidated financial information.

30 June 2024

3. OPERATING SEGMENT INFORMATION

Management monitors the operating results of the Group as a whole for the purpose of making decisions about resource allocation and performance assessment.

Geographical information

(a) Revenue from an external customer

		For the six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Chinese Mainland	2,026	1,365

The revenue information above is based on the location of the customer.

(b) Non-current assets

	As at	As at
	30 June	31 December
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(audited)
Chinese Mainland	571,456	571,762
Hong Kong	3,191	4,741
Total non-current assets	574,647	576,503

The non-current asset information above is based on the locations of the assets and excludes financial instruments.

30 June 2024

4. REVENUE, OTHER INCOME AND GAINS

An analysis of revenue is as follows:

	For the six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Revenue from contract with a customer	2,026	1,365

Disaggregated revenue information

	For the six months ended 30 June 2024 RMB'000 (unaudited)	2023 RMB'000 (unaudited)
Type of goods Sales of capsules	2,026	1,365
Geographical market Chinese Mainland	2,026	1,365
Timing of revenue recognition Goods transferred at a point in time	2,026	1,365

Notes:

• (i) On 19 December 2022, the Company entered into a capsule sales agreement with Everest Medicines II (HK) Limited ("Everest") to sell the capsule which is the Bruton's tyrosine kinase ("BTK") inhibitor. In April 2024, the Company supplied capsules and recognised the corresponding revenue and costs.
• (ii) The performance obligation is satisfied upon delivery of the capsule products.

5. OTHER EXPENSES

	For the six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Foreign exchange loss, net	2,890	19,974
Others	67	1,547
Total other expenses	2,957	21,521

30 June 2024

6. LOSS BEFORE TAX

The Group's loss before tax is arrived at after charging/(crediting):

	For the six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Fair value gain on financial assets at fair value through profit or loss	(264)	(51)
Foreign exchange loss, net	2,890	19,974

7. INCOME TAX

No Hong Kong profits tax has been made as the Company did not generate any assessable profit during the period (six months ended 30 June 2023: Nil).

Under the Law of the PRC of Enterprise Income Tax (the "EIT Law") and Implementation Regulation of the EIT Law, the estimated tax rate of the Group's Chinese Mainland subsidiaries is 25% during the periods presented in the interim condensed consolidated financial statements. No Enterprise Income Tax was provided for as there was no estimated assessable profit of the Group's subsidiaries in Chinese Mainland during the periods presented in the interim condensed consolidated financial statements.

Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates.

Deferred taxation had not been recognised on the unused tax losses and deductible temporary differences due to the unpredictability of future profit streams.

8. DIVIDENDS

No dividend was paid or declared by the board of directors of the Company during the six months ended 30 June 2024 and 2023.

30 June 2024

9. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

The calculation of the basic loss per share amounts is based on the consolidated loss for the period attributable to ordinary equity holders of the parent of RMB90,622,000 (six months ended 30 June 2023: RMB134,096,000), and the weighted average number of ordinary shares of 1,071,475,873 (six months ended 30 June 2023: 1,017,964,900) in issue during the period, as adjusted to exclude the shares held under the share award scheme of the Company.

No adjustment has been made to the basic loss per share amount presented for the six months ended 30 June 2024 in respect of a dilution as the impact of the share options outstanding had an anti-dilutive effect on the basic loss per share amount presented (six months ended 30 June 2023: no potentially dilutive ordinary shares in issue).

10. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2024, the addition of property, plant and equipment is RMB30,423,000 at cost (30 June 2023: RMB57,086,000).

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	Note	30 June 2024 RMB'000 (unaudited)	31 December 2023 RMB'000 (audited)
Unlisted investment, at fair value Structured deposit	(i)	31,186 10,052	30,993 –
Total financial assets at fair value through profit or loss		41,238	30,993

Note:

(i) The structured deposit was mandatorily classified as financial asset at fair value through profit or loss as its contractual cash flows are not solely payments of principal and interest. The Group has estimated the fair value of the structured deposit based on fair value provided by the financial institution. As of 30 June 2024, the maturity of the structured deposit is within one month, with an expected return rate ranging from 1.50% to 2.65% per annum.

30 June 2024

12. CASH AND CASH EQUIVALENTS

		30 June	31 December
		2024	2023
	Notes	RMB'000	RMB'000
		(unaudited)	(audited)
Cash and bank balances		105,426	67,649
Time deposits		48,191	136,015
Cash and cash equivalents		153,617	203,664
Pledged for bank loans	13(b)	43,473	5,000
Restricted for special purpose	(i)	12,880	24,439
Pledged and restricted deposits		56,353	29,439
Denominated in:
RMB		138,367	144,636
USD		63,010	77,136
HKD		8,191	10,923
EUR		265	271
AUD		137	137
Cash and cash equivalents and pledged and restricted
deposits		209,970	233,103

Note:

(i) As at 30 June 2024, bank balances restricted for special purpose amount, in aggregate, to RMB12,880,000 (31 December 2023: RMB24,439,000) which was designated for the use of a construction project by a subsidiary of the Group in accordance with the relevant facility agreements. The Group management monitors closely the use of the fund to meet its ongoing construction expenditure.

13. INTEREST-BEARING BANK BORROWINGS

	30 June	31 December
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(audited)
Non-current
Unsecured bank borrowings	150,663	152,464
Secured bank borrowing	167,330	172,343
•	•
Total — non-current	317,993	324,807
Current
Unsecured bank borrowings	35,560	34,723
Secured bank borrowing	70,224	31,865
Total — current	105,784	66,588
Total	423,777	391,395
Bank borrowings repayable analysed into:
Within one year	105,784	66,588
In the second year	84,738	47,600
In the third to fifth years, inclusive	233,255	277,207
Total	423,777	391,395

Notes:

• (a) The Group's overdraft facilities amounted to RMB1,015,555,000 (31 December 2023: RMB907,555,000), of which RMB471,843,000 (31 December 2023: RMB409,657,000) had been utilised as at the end of the reporting period.
• (b) Certain of the Group's bank borrowings are secured by:
• (i) mortgages over the Group's land use right and construction in progress, which had a net carrying value at the end of the reporting period of approximately RMB326,996,000 (31 December 2023: RMB323,619,000). In accordance with the agreement with the bank, the maximum amount of pledge is RMB158,400,000.
• (ii) The pledge of certain of the Group's deposits amounting to RMB43,473,000 (31 December 2023: RMB5,000,000).
• (c) All borrowings are denominated in RMB.
• (d) The interest rates of the bank borrowings as at 30 June 2024 ranged from 3.15% to 3.90% (31 December 2023: 3.30% to 4.05%) per annum.

30 June 2024

14. SHARE CAPITAL

	30 June 2024 RMB'000	31 December 2023 RMB'000
Issued and fully paid: 1,091,755,119 (2023: 1,034,920,400) ordinary shares	1,790,094	1,725,211

Note:

(i) On 14 December 2023, the Company entered into fifteen subscription agreements with fifteen subscribers for the issuance of an aggregate of 56,834,719 new ordinary shares at a subscription price of HK\$1.29 per share. The Company completed an issue of 48,322,093 new ordinary shares for thirteen subscription agreements and 8,512,626 new ordinary shares for two subscription agreements on 12 January 2024 and 31 January 2024 respectively. The net proceeds amounting to approximately HK\$73,181,794 were settled as of 31 January 2024.

An aggregate of 56,834,719 shares, represents (i) approximately 5.49% of the issued share capital of the Company immediately before the completion of the share subscription; and (ii) approximately 5.21% of the issued share capital of the Company as enlarged by the allotment and issue of the subscription shares.

15. COMMITMENTS

The Group had the following contractual commitments at the end of the reporting period:

	30 June	31 December
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(audited)
Buildings, plant and machinery	126,162	161,094

16. RELATED PARTY TRANSACTIONS

(a) Outstanding balances with related party:

		30 June	31 December
		2024	2023
	Notes	RMB'000	RMB'000
		(unaudited)	(audited)
Other payables and accruals:
Haikou Pharmaceutical Factory Co., Ltd.	(i)	508	1,004
Prepayments:
Haikou Pharmaceutical Factory Co., Ltd.		1,147	382
Lease liabilities:
Haikou Pharmaceutical Factory Co., Ltd.	(ii)	53,382	55,426

Notes:

• (i) This balance is unsecured, interest-free and has no fixed terms of repayment.
• (ii) The Company is in a lease agreement with Haikou Pharmaceutical to lease equipment and a manufacturing building for a term of 10 years commencing from 1 January 2016 to 31 December 2025, with annual rental of RMB9,400,000 since 2022. The Company is in a lease agreement with Haikou Pharmaceutical to lease a property building for a term of 20 years commencing from 1 April 2021 to 31 March 2041, with annual rental of RMB3,393,000. As at 30 June 2024, the total lease liabilities payable to Haikou Pharmaceutical amounted to RMB53,382,000 (31 December 2023: RMB55,426,000). The total lease payment paid to Haikou Pharmaceutical amounted to RMB3,393,000 (30 June 2023: RMB11,845,000) under the leases during the period.

The transactions under these two lease agreements constituted one-off connected transactions as defined under Chapter 14A of the Listing Rules to the Company and have complied relevant requirements under Chapter 14A.

(b) Compensation of key management personnel of the Group:

	Six months ended 30 June
	2024	2023
	RMB'000	RMB'000
	(unaudited)	(unaudited)
Salaries, allowances and benefits in kind	5,801	8,307
Equity-settled share-based payment expense	2,402	4,854
Pension scheme contributions	40	88
Total compensation paid to key management personnel	8,243	13,249

30 June 2024

17. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows:

As at 30 June 2024

Financial assets

	Financial assets at fair value through profit or loss RMB'000 (unaudited)	Financial asset at amortised cost RMB'000 (unaudited)	Total RMB'000 (unaudited)
Cash and cash equivalents Financial assets at fair value through profit or loss Pledged and restricted deposits Financial assets included in prepayments, deposits and other receivables	– 41,238 – –	153,617 – 56,353 694	153,617 41,238 56,353 694
Total	41,238	210,664	251,902

Financial liabilities

	Financial liabilities at amortised cost RMB'000 (unaudited)
Financial liabilities included in other payables and accruals Interest-bearing bank borrowings	78,102 423,777
Total	501,879

30 June 2024

17. FINANCIAL INSTRUMENTS BY CATEGORY (continued)

As at 31 December 2023

Financial assets

	Financial
	asset at	Financial
	fair value	assets at
	through	amortised
	profit or loss	cost	Total
	RMB'000	RMB'000	RMB'000
	(audited)	(audited)	(audited)
Cash and cash equivalents	–	203,664	203,664
Financial asset at fair value through profit or loss	30,993	–	30,993
Pledged and restricted deposits	–	29,439	29,439
Financial assets included in prepayments,
deposits and other receivables	–	1,593	1,593
Total	30,993	234,696	265,689

Financial liabilities

	Financial
	liabilities at
	amortised
	cost
	RMB'000
	(audited)
Financial liabilities included in other payables and accruals	93,166
Interest-bearing bank borrowings	391,395
Total	484,561

30 June 2024

18. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

All the carrying amounts of the Group's financial instruments approximate to their fair values.

The Group's finance department headed by chief financial officer is responsible for determining the policies and procedures for the fair value measurement of financial instruments. At each reporting date, the finance department analyses the movements in the values of financial instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the chief financial officer. The valuation process and results are discussed with the audit committee twice a year for interim and annual financial reporting.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair value of the non-current portion of financial assets included in prepayments, deposits and other receivables have been calculated by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and remaining maturities.

The Group invests in structured deposits, which represent a wealth management product issued by a bank in Mainland China. The Group has estimated the fair value of these structured deposits based on fair values provided by financial institutions.

As at 30 June 2024, the Group had an unlisted equity investment, which was classified as a financial asset at fair value through profit or loss as the Group has not elected to recognise the fair value gain or loss through other comprehensive income. The Group estimated the fair value of the unlisted investment based on the most recent transaction price of funding. The carrying amount of the financial asset at fair value through profit or loss is the same as its fair value.

30 June 2024

18. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

(continued)

Fair value hierarchy

The following table illustrates the fair value measurement hierarchy of the Group's financial instruments:

Assets measured at fair value:

As at 30 June 2024

	Fair value measurement using
	Quoted
	prices in	Significant	Significant
	active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	RMB'000	RMB'000	RMB'000	RMB'000
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Financial asset at fair value through
profit or loss	–	41,238	–	41,238

As at 31 December 2023

	Fair value measurement using
	Quoted
	prices in	Significant	Significant
	active	observable	unobservable
	markets	inputs	inputs
	(Level 1)	(Level 2)	(Level 3)	Total
	RMB'000	RMB'000	RMB'000	RMB'000
	(audited)	(audited)	(audited)	(audited)
Financial asset at fair value through
profit or loss	–	30,993	–	30,993

During the period, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 for financial assets (six months ended 30 June 2023: Nil).

19. APPROVAL OF THE FINANCIAL STATEMENTS

The unaudited interim condensed consolidated financial statements were approved and authorised for issue by the board of directors on 19 August 2024.

USE OF PROCEEDS FROM GLOBAL OFFERING

On 12 November 2019, Shares were listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") (the "Listing") and the Company raised net proceeds of HK\$1,272.8 million ("Net Proceeds").

As at 30 June 2024, the unutilised balance of Net Proceeds was approximately HK\$98.0 million. In respect of the use of proceeds in the Company's prospectus dated 31 October 2019 (the "Prospectus") and subsequent changes in use of proceeds as disclosed in the announcements dated 22 July 2020, 14 August 2020, 21 March 2022, 20 March 2023 and 25 March 2024, the Board resolved to change the use of unutilised Net Proceeds.

Change in use of proceeds raised from the Listing

As a result of an enhanced procurement process of the Group, the current estimated expenditure on purchase of laboratory equipment and the construction of an upstream production facility and downstream purification facility is less than the original estimation.

To better use the unutilised Net Proceeds, the Company proposes to reallocate a total of HK\$15.0 million, among which HK\$10.0 million from the use of proceeds from "For the purchase of laboratory equipment, primarily for the R&D of SM03 and potentially for the R&D of other products in our pipeline" under "For the construction of our Suzhou production base primarily for the commercial-scale production of our core product SM03" and HK\$5.0 million from the use of proceeds from "For the construction of an upstream production facility and downstream purification facility" under "For the construction of the Suzhou production base", to "For our working capital, expanding internal capabilities and other general corporate purposes".

The Board considered the impact of the proposed change in the use of the proceeds on the Group's business and believes that, in view of the Group's operation and business development, the reallocation of the unutilised Net Proceeds would be appropriate and would facilitate efficient allocation of financial resources and strengthen the future development of the Group, and is therefore in the interests of the Company and its shareholders as a whole.

To strive for better business performance of the Group, the Board will continuously assess the use of unutilised Net Proceeds and may revise or amend the plan for the use of the unutilised net proceeds where necessary in respond to the changing market conditions.

Save for the above, there is no other change in the use of Net Proceeds.

Use of proceeds	Planned applications (Note 1) (HK\$ million)	Revised allocation (HK\$ million)	Utilised amount of Net Proceeds during the Reporting Period (HK\$ million)	Actual utilisation up to 30 June 2024 (HK\$ million)	Unutilised Net Proceeds as at 30 June 2024 (HK\$ million)	Expected timeline for full utilisation of the unutilised Net Proceeds (Note 2)
For the R&D and commercialisation of our drug candidates For the R&D and commercialisation of our core product, SM03, to fund clinical trials for SM03 including (i) ongoing and planned clinical trials in the PRC; (ii) additional clinical trials to be initiated in the PRC for additional indications; (iii) clinical trials in Australia and the United States; and (iv) New Drug Application	250.9	250.9	13.2	245.4	5.5	By the end of 2024
registration filings and the commercial launch of SM03 To fund pre-clinical research, clinical trials, production, preparation for registration filings and potential commercial launches of the other drug candidates in our pipeline	299.4	299.4	1.0	294.0	5.4	By the end of 2024
To further advance our R&D programmes, expand our R&D team, build our commercialisation team, develop our proprietary technology and enhance our full-spectrum platform	52.4	52.4	–	52.4	–	N/A
For the discovery and development of new drug candidates not currently in our pipeline to diversify our product portfolio For the construction of our Suzhou production base primarily for the commercial-scale production of our core product SM03	99.9	99.9	1.2	93.2	6.7	N/A (Note 3)
For the purchase of laboratory equipment, primarily for the R&D of SM03 and potentially for the R&D of other products in our pipeline	85.8	75.8	11.2	61.9	13.9	By the end of 2024
For the purchase of manufacturing equipment, primarily for the production of SM03	59.7	59.7	8.3	22.4	37.3	By the end of 2024
For the construction of the Suzhou production base For the construction of additional R&D facilities and purchase of laboratory equipment to aid the ongoing R&D of SM03 for the treatment of rheumatoid arthritis, systemic lupus erythematosus, non-Hodgkin's lymphoma and other potential indications, R&D of SM03 at commercialisation to enhance craftsmanship for large-scale production, as well as the development of other products in our pipeline	87.6	87.6	–	87.6	–	N/A
For the construction of an upstream production facility and downstream purification facility	28.2	23.2	8.0	16.5	6.7	By the end of 2024
For the purchase of land from the Suzhou Dushu Lake Higher Education Town and other expenses related to the expansion of our Suzhou production base	107.9	107.9	0.5	105.0	2.9	By the end of 2024
For our working capital, expanding internal capabilities and other general corporate purposes	162.2	177.2	10.5	157.6	19.6	N/A
Collaboration with D2M Group	38.8	38.8	–	38.8	–	N/A
Total	1,272.8	1,272.8	53.9	1,174.8	98.0

Notes:

• (1) Planned applications as revised and disclosed in the Company's announcements dated 22 July 2020, 14 August 2020, 21 March 2022, 20 March 2023 and 25 March 2024.
• (2) The expected timeline for utilising the unutilised Net Proceeds is based on the best estimation made by the Group. It is subject to change based on the future development and events which may be outside of the Group's control.
• (3) As the discovery and development of new drug candidates not currently in pipeline is a continuous and ongoing process, the Company is unable to set out a detailed timeline for the utilisation of such Net Proceeds.
• (4) SM03 refers to SM03 (Suciraslimab), the flagship product of the Company.

Such utilisation of the Net Proceeds was in accordance with the planned applications as set out in the above. The unutilised portion of the Net Proceeds will be applied in a manner consistent with the above planned applications.

USE OF PROCEEDS FROM NEW SHARE SUBSCRIPTIONS UNDER GENERAL MANDATE

2022 Share Subscriptions

On 16 November 2022, the Company completed an issue of 28,680,000 new ordinary shares at a subscription price of HK\$1.78 per share to two subscribers and raised net proceeds of approximately HK\$50,890,400, representing a net subscription price of approximately HK\$1.77 per subscription share (the "2022 Subscriptions"). The subscription price of HK\$1.78 per share represents (i) the closing price per Share of HK\$1.78 as quoted on the Stock Exchange on 2 November 2022, being the date of the subscription agreements; and (ii) a discount of approximately 0.56% to the average closing price per Share of HK\$1.79 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the subscription agreements. Each of the investors, namely Ms. Shun Kuen CHAN and Mr. Shanchun WANG subscribed 14,340,000 new ordinary shares.

The 2022 Subscriptions were conditional upon the approval of the listing of, and permission to deal in, all the new shares being granted by the Listing Committee of the Stock Exchange, such approval was given by the Stock Exchange in November 2022.

The Directors consider that the 2022 Subscriptions represent a good opportunity for the Company to raise capital to meet the Company's funding needs and strengthen the shareholding base of the Company.

References are made to the Company's announcements dated 2 November 2022, 7 November 2022, 16 November 2022 and 20 March 2023.

Details of the planned applications of the net proceeds from the 2022 Subscriptions were disclosed in the Company's announcement dated 7 November 2022 and subsequently revised and disclosed in the Company's announcement dated 20 March 2023. The following table sets out the planned applications of the net proceeds and the actual usage up to 30 June 2024.

	Use of proceeds	Planned application (HK\$ million)	Details of usage	Utilised amount of net proceeds during the Reporting Period (HK\$ million)	Actual utilisation up to 30 June 2024 (HK\$ million)	Unutilised net proceeds as at 30 June 2024 (HK\$ million)	Expected timeline for full utilisation of the unutilised net proceeds (Note 1)
(i)	For the R&D and commercialisation of our drug candidate	39.6	For the R&D and commercialisation of our core product, SM03, to fund clinical trials for SM03 including (i) ongoing and planned clinical trials in the PRC; and (ii) New Drug Application registration filings and the commercial launch of SM03.	–	31.9	7.7	By the end of 2024
(ii)	Further advance the Company's R&D programmes, expand its R&D team, build its commercialisation team,	0.2	For R&D programmes of SN1011, especially for the Phase II clinical study for neuromyelitis optica spectrum disorder (NMOSD) in China, for the trial expense and related production cost.	–	0.2	–	N/A
	develop its proprietary technology and enhance its full-spectrum platform	4.0	To fund the expansion of R&D team.	0.7	0.7	3.3	By the end of 2024
		2.0	To build the Company's commercialisation team, develop its proprietary technology and enhance the Company's full-spectrum platform.	1.1	1.1	0.9	By the end of 2024
	(iii) For general working capital purpose	5.1	For the general working capital of the Group, including but not limited to staff employment cost and rental and property management fees.	–	4.5	0.6	By the end of 2024
Total		50.9		1.8	38.4	12.5

Notes:

1. The expected timeline for utilisation of the unutilised net proceeds is based on the best estimation made by the Group and is subject to change based on the future development and events which may be outside the Group's control.

2. SM03 refers to SM03 (Suciraslimab), the flagship product of the Company.

Such utilisation of the net proceeds was in accordance with the planned applications as set out in the above. The unutilised portion of the net proceeds will be applied in a manner consistent with the above planned applications.

2023 Share Subscriptions

On 14 December 2023, the Company entered into fifteen subscription agreements with fifteen subscribers for the issuance of an aggregate of 56,834,719 new ordinary shares at a subscription price of HK\$1.29 per share (the "2023 Subscriptions"). The completion of the 2023 Subscriptions took place in January 2024 and raised net proceeds of approximately HK\$73,181,794, representing a net subscription price of approximately HK\$1.29 per subscription share. The Company completed an issue of 48,322,093 new ordinary shares for thirteen subscription agreements and 8,512,626 new ordinary shares for two subscription agreements on 12 January 2024 and 31 January 2024, respectively. The subscription price of HK\$1.29 per share represents (i) a discount of approximately 18.35% to the closing price per Share of HK\$1.58 as quoted on the Stock Exchange on 14 December 2023, being the date of the subscription agreements; (ii) a discount of approximately 16.77% to the average closing price per Share of HK\$1.55 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the subscription agreements; and (iii) a discount of approximately 9.15% to the average closing price per Share of HK\$1.42 as quoted on the Stock Exchange for the last ten consecutive trading days immediately preceding the date of the subscription agreements. Each of the subscribers and its ultimate beneficial owner(s), are independent third parties of the Company. All subscribers are individuals (including employees of the Company), corporations and/or professional investors procured by the Company. The 2023 Subscriptions were conditional upon the approval of the listing of, and permission to deal in, all the new shares being granted by the Listing Committee of the Stock Exchange, such approval was given by the Stock Exchange in December 2023.

The Directors consider that the 2023 Subscriptions represent a good opportunity for the Company to raise capital to meet the Company's funding needs and strengthen the shareholding base of the Company.

References are made to the Company's announcements dated 14 December 2023, 12 January 2024 and 31 January 2024. The following table sets out the planned applications of the net proceeds and the actual usage up to 30 June 2024:

Use of proceeds	Planned application (HK\$ million)	Utilised amount of net proceeds during the Reporting Period (HK\$ million)	Actual utilisation up to 30 June 2024 (HK\$ million)	Unutilised net proceeds as at 30 June 2024 (HK\$ million)	Expected timeline for full utilisation of the unutilised net proceeds (Note 1)
For marketing and commercialisation, including establishment of a sales and marketing team, post commercialisation medical activities and marketing and academic promotion activities for Suciraslimab	25.6	0.9	0.9	24.7	By the end of 2025
For commercial production and post-launch site transfer for Suciraslimab	14.6	–	–	14.6	By the end of 2025
For Biologies Licence Application (BLA) commercialisation application and extension study for Suciraslimab	11.0	0.8	0.8	10.2	By the end of 2025
For clinical trials of Suciraslimab for the treatment of mild cognitive impairment (MCI)	11.0	–	–	11.0	By the end of 2025
For clinical studies for SM17 for the treatment of atopic dermatitis	11.0	6.7	6.7	4.3	By the end of 2025
Total	73.2	8.4	8.4	64.8

Note:

1. The expected timeline for utilisation of the unutilised net proceeds is based on the best estimation made by the Group and is subject to change based on the future development and events which may be outside the Group's control.

Such utilisation of the net proceeds was in accordance with the planned applications as set out in the above. The unutilised portion of the net proceeds will be applied in a manner consistent with the above planned applications.

SHARE INCENTIVES

During the Reporting Period, the Company maintained two share incentive schemes, Share Award Scheme and Share Option Scheme (amended on 14 June 2024). The number of shares that may be issued in respect of options and awards granted under all schemes of the Company during the Reporting Period divided by the weighted average number of shares of the relevant class in issue for the Reporting Period is 0.

On 14 June 2024, the Company amended and refreshed the scheme mandate limit of its Share Option Scheme, details of which are disclosed under below paragraph headed "Share Option Scheme (amended on 14 June 2024)".

The number of options and awards available for grant under the scheme mandate (including options and awards under the service provider sublimit) of all share schemes of the Company is 533,620 share options (including 533,620 share options under service provider sublimit) at the beginning of the Reporting Period and 109,175,511 share options (including 10,917,551 share options under service provider sublimit) at the end of the Reporting Period.

Share Award Scheme

A share award scheme, as amended from time to time, (the "Share Award Scheme") was adopted by the Company on 4 February 2021 (the "Adoption Date"). The purposes of the Share Award Scheme are to incentivise our directors, senior management, employees and consultants for their contribution to our Group and to attract, motivate and retain skilled and experienced personnel to strive for the future development and expansion of our Group by providing them with the opportunity to own equity interests in our Company and to promote the success of our Company's business.

Under the Share Award Scheme, the Board or an authorised person may select any eligible person and grant an award (the "Award") to the selected participants ("Selected Participants"). Any individual, being an employee or director of any member of the Group who the Board or an authorised person (as the case may be) considers, in its sole discretion, to have contributed or will contribute to the Group, are eligible person under the Share Award Scheme ("Eligible Person"). However, no individual who is resident in a place where the grant, acceptance or vesting of an Award pursuant to the Share Award Scheme is not permitted under the laws and regulations of such place or where, in the view of the Board or an authorised person, compliance with applicable laws and regulations in such place makes it necessary or expedient to exclude such individual, shall be entitled to participate in the Share Award Scheme and such individual shall therefore be excluded from the term Eligible Person. Computershare Hong Kong Trustees Limited (the "Trustee") has been appointed by the Company as the trustee for the Share Award Scheme. To satisfy an Award, the Company shall transfer to the trust the necessary funds and instruct the Trustee to acquire Shares through on-market transactions at the prevailing market price or through manual trades.

The Share Award Scheme will remain in force for a period of 10 years commencing on its Adoption Date until 3 February 2031, unless otherwise terminated under the terms of the Share Award Scheme. The remaining life of the Share Award Scheme is 6 years 4 months.

The maximum number of Award Shares throughout the duration of the Share Award Scheme is 50,312,020 Shares, being 5% of the issued Shares of the Company as at the Adoption Date. The maximum number of Shares which may be awarded to a Selected Participant under the Share Award Scheme is 20,124,808 Shares, being 2% of the issued Shares of the Company as at the Adoption Date. Details of the Share Award Scheme are set out in the announcement of the Company dated 4 February 2021. The vesting schedule will be set out in the grant letter for each grant.

There were 11,075,500 Awards (being 1.07% of the issued shares of the Company at 1 January 2024) at the beginning and at the end of the Reporting Period available for grant under the Share Award Scheme. No Share was purchased by the Trustee from the market during the Reporting Period. As at the date of this report, the Company has 1,091,755,119 issued Shares and there are 11,075,500 Awards under the Share Award Scheme, being 1.01% of the issued Shares of the Company, available for grant.

During the Reporting Period, there were no movements with regard to the Share Award Scheme, no Awards were exercised, cancelled, lapsed or granted by the Company pursuant to the Share Award Scheme.

Share Option Scheme (amended on 14 June 2024)

A share option scheme was adopted by the Shareholders on 26 October 2022 (the "Adoption Date") ("2022 Share Option Scheme"). Pursuant to the 2022 Share Option Scheme, the Board may grant options to eligible participants to subscribe for ordinary shares in the Company subject to the terms and conditions stipulated therein.

The purpose of the 2022 Share Option Scheme is to provide the participants with the opportunity to acquire proprietary interests in the Company, to provide incentives to the participants, and to recognise their contributions made and to be made to the growth and development of the Group and for such other purposes as the Board may approve from time to time.

Any employee (whether full-time or part-time), director, service provider of any member of the Group, is participant ("Participant") under the 2022 Share Option Scheme, provided that the Board may have absolute discretion to determine whether or not one falls within this category.

In order to give the Company flexibility to grant share options to the Participants under the 2022 Share Option Scheme as incentives and rewards for their contributions to the Group, the Company amended the 2022 Share Option Scheme so as to increase the scheme mandate limit and service provider sublimit (the "Amendments"). For the purpose of providing more flexibility for the Company to motivate the Participants for their future contributions to the Group and/or to reward them for their past contributions, and to maintain on-going relationship with them, the Company also refreshed the scheme mandate limit and service provider sublimit (the "Refreshment"). Both the Amendments and Refreshment were approved by the shareholders of the Company at the annual general meeting of the Company held on 14 June 2024 (the "2024 AGM").

Pursuant to the amended 2022 Share Option Scheme (the "Amended 2022 Share Option Scheme"), the maximum number of Shares which may be issued upon exercise of all share options to be granted under the Amended 2022 Share Option Scheme and any other share schemes of the Company shall not in aggregate exceed 109,175,511, representing 10% of the total number of Shares in issue on the 2024 AGM date. Options previously granted under the 2022 Share Option Scheme and any other share schemes of the company shall not be counted for the purpose of calculating the Scheme Mandate Limit (the "Refreshed Scheme Mandate Limit"). Within the Refreshed Scheme Mandate Limit, the total number of Shares which may be issued upon exercise of all options to be granted to Service Providers shall not exceed 10,917,551, representing 1% of the total number of Shares in issue on the 2024 AGM date (the "Refreshed Service Provider Sublimit"). The grantee shall pay HK\$1.00 by way of consideration for the grant within the period stipulated in the offer letter. There were 533,620 share options (including 533,620 share options under Service Provider Sublimit) available for grant at the beginning of the Reporting Period and 109,175,511 share options (including 10,917,551 share options under the Refreshed Service Provider Sublimit) available for grant at the end of the Reporting Period. The total number of shares available for issue under the Amended 2022 Share Option Scheme is 158,623,911, representing 14.53% of the issued shares of the Company as at the date of this interim report. The total number of shares issued and to be issued upon exercise of the share options granted to each participant in any 12-month period shall not exceed 1% of the total number of shares in issue.

The options may be exercised during such period as determined by the Board and such period shall be specified in the offer letter to the grantee, which may be varied by the Board in accordance with the terms of the Amended 2022 Share Option Scheme, provided that it shall not under any circumstances exceed ten years from the date of grant of the relevant option. The vesting period of options granted under the Amended 2022 Share Option Scheme shall be determined by the Board subject to a minimum period set out in the rules of the Amended 2022 Share Option Scheme.

The Board may delegate all or part of the administration to the chief executive officer, a committee or any other authorised agent(s) as deemed appropriate at the sole discretion of the Board.

The exercise price of the options shall not less than the higher of (i) the closing price of the Company's shares as stated in the Hong Kong Stock Exchange's daily quotations sheet on the date of grant, which must be a business day; and (ii) the average of the closing prices of the Company's shares as stated in the Hong Kong Stock Exchange's daily quotations sheet for the five business days immediately preceding the date of grant. The Amended 2022 Share Option Scheme remains in force until 25 October 2032 unless otherwise terminated under the terms of the Amended 2022 Share Option Scheme.

During the Reporting Period, there were no grants of share options under the 2022 Share Option Scheme. Details of movement of options under the 2022 Share Options Scheme during the Reporting Period were as follows:

		Number of share options
Categories of		Closing price per Share immediately before the date of Grant	Outstanding as at 1 January	Granted during the Reporting	Vested during the Reporting	Exercised/ Lapsed/ Cancelled during the Reporting	Outstanding as at 30 June	Exercise Price per Share	Vesting Date/
Selected Participants	Date of Grant	(HK\$)	2024	Period	Period	Period	2024	(HK\$)	Vesting Periods Exercise Period
Employees (Note a)	03/11/2022	1.78	25,156,000	–	–	–	25,156,000	1.79	04/11/2023	04/11/2023–
Employee (Note a)	06/11/2023	1.10	10,062,400	–	–	–	10,062,400	1.102	07/11/2024	02/11/2032 07/11/2024–
										06/11/2034
Employees	16/11/2023	1.12	14,560,000	–	–	330,000 (Note b)	14,230,000	1.120	17/11/2025– 17/11/2028	17/11/2025– 16/11/2033
									(Note c)

Notes:

• a. Each of 10,062,400 share options were granted to Mr. Shanchun WANG who was a senior management at the date of the grant during the year ended 31 December 2022 and 2023. Mr. Wang was appointed as an executive Director of the Company with effect from 7 February 2024.
• b. 330,000 share options were lapsed in accordance with the terms of the scheme during the Reporting Period.
• c. The vesting of the share options was subject to performance evaluation and contribution to the Group.

DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITION IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 June 2024, the interests or short positions of the Directors and chief executive of the Company in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were entered in the register pursuant to section 352 of the SFO, or as otherwise notified to the Company and Stock Exchange pursuant to the Model Code were as follows:

Name of Director/ chief executive	Capacity/nature of interest(1)	Number of Shares	Approximate percentage of shareholding(2)
Dr. Wenyi LIU(3)	Interest in a controlled corporation and interest of spouse	285,703,036	26.17%
Dr. Shui On LEUNG(4)	Interest in a controlled corporation	129,729,200	11.88%
Mr. Shanchun WANG(5)	Beneficial Interest	35,464,800(6)	3.25%

(1) All interests stated are long positions.

(2) As at 30 June 2024, the Company had 1,091,755,119 issued Shares.

(3) As at 30 June 2024, 212,879,400 Shares were held by Apricot Capital (上海杏澤投資管理有限公司) through Apricot Oversea Holdings Limited, West Biolake Holdings Limited, Apricot BioScience Holdings, L.P., Le Rong Limited and Zliverland Holdings Limited, which are ultimately controlled by Dr. Liu. Dr. Liu is deemed to be interested in these Shares for the purposes of the SFO. The interest in the other 72,823,636 Shares were held by Mr. Jing QIANG, of which 46,711,640 Shares were held through Grogene Technology Limited (格擎生物科技有限公司) which is wholly owned by Mr. Jing QIANG. Dr. Liu is the spouse of Mr. Qiang who is deemed to have an interest in the 72,823,636 Shares for the purposes of the SFO.

• (4) As at 30 June 2024, these Shares were held by Skytech Technology, which is wholly owned by Dr. Leung.
• (5) Mr. Shanchun WANG was appointed as an executive Director of the Company with effect from 7 February 2024.
• (6) As at 30 June 2024, Mr. Shanchun WANG held interests in 20,124,800 share options granted under the Company's 2022 Share Option Scheme.

Save as disclosed above, as at 30 June 2024, none of the Directors and the chief executive of the Company had or was deemed to have any interests or short positions in the Shares, underlying Shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) that was required to be recorded in the register of the Company required to be kept under section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES

As at 30 June 2024, to the best knowledge of the Directors, the following persons/entities (not being a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company which had been disclosed to the Company and Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO and recorded in the register required to be kept under section 336 of the SFO were as follows:

		Number of	Approximate percentage of
Name of shareholder	Capacity/nature of interest(1)	Shares	shareholding(2)
Mr. Jing QIANG(4)	Beneficial interest, interest in a controlled corporation and interest of spouse	285,703,036	26.17%
Apricot Capital (上海杏澤投資管理 有限公司) (5)(6)(7)	Interest in a controlled corporation	212,879,400	19.50%
Shanghai Yueyi Investment Centre (Limited Partnership)* (上海月溢 投資中心(有限合夥))(5)(7)	Interest in a controlled corporation	212,879,400	19.50%
Hainan Haiyao Co., Ltd. (海南海藥 股份有限公司) (8)	Beneficial interest	158,882,115	14.55%
Skytech Technology(3)	Beneficial interest	129,729,200	11.88%
Apricot Oversea Holdings Limited(5)	Beneficial interest	108,316,600	9.92%
Ms. Sijia XU(9)	Beneficial interest	89,802,105	8.23%
West Biolake Holdings Limited(6)	Beneficial interest	72,349,000	6.63%
China Citic Bank Co., Ltd., Haikou Branch (8)	Person having a security interest in Shares	158,882,115	14.55%

Notes:

• (1) All interests stated are long positions.
• (2) As at 30 June 2024, the Company had 1,091,755,119 issued Shares.
• (3) Skytech Technology is a company wholly owned by Dr. Shui On LEUNG.

• (4) As at 30 June 2024, 72,823,636 Shares were held by Mr. Jing QIANG of which 46,711,640 Shares were held through his wholly owned company, Grogene Technology Limited (格擎生物科技有限公司). The interest in the other 212,879,400 Shares were held by Apricot Capital (上海杏澤投資管理有限公司) through Apricot Oversea Holdings Limited, West Biolake Holdings Limited, Apricot BioScience Holdings, L.P., Le Rong Limited and Zliverland Holdings Limited, which are ultimately controlled by Dr. Wenyi LIU. Mr. Qiang is the spouse of Dr. Liu who is deemed to be interested in these Shares for the purposes of the SFO.

• (5) Apricot Oversea Holdings Limited is the overseas holding platform of Xingze Xinghe and Shanghai Jianyi Xinghe Startup Investment Center (Limited Partnership)* (上海健益興禾創業投資中心(有限合夥) ("Jianyi Xinghe"), holding as to approximately 8.53% and 1.39% of the issued Shares as at 30 June 2024, respectively. Apricot Capital (上海杏澤投資管理有限公司) is the general partner of Jianyi Xinghe. Apricot Capital and Shanghai Yueyi Investment Centre (Limited Partnership)* (上海月溢投資中心(有限合夥)) ("Yueyi Investment") are the co-general partners of Xingze Xinghe. For the purpose of the SFO, Apricot Capital and Yueyi Investment are deemed to have an interest in the Shares held by Apricot Oversea Holdings Limited.

• (6) West Biolake Holdings Limited is the overseas holding platform of Xingze Xingzhan. Apricot Capital is the general partner of Xingze Xingzhan. For the purpose of the SFO, Apricot Capital is deemed to have an interest in the Shares held by West Biolake Holdings Limited.
• (7) Save as Apricot Capital's deemed interest in West Biolake Holdings Limited and Apricot Oversea Holdings Limited pursuant to the SFO, Apricot Capital is the general partner of Xingze Xingzhan. Apricot BioScience Holdings, L.P. held approximately 1.21% of the issued Shares as at 30 June 2024. Le Rong Limited and Zliverland Holdings Limited are the overseas holding platforms of Xingze Xingzhan, holding as to approximately 1.00% and 0.74% of the issued Shares as at 30 June 2024, respectively. Apricot Capital was owned by Dr. Wenyi LIU, a non-executive Director, and Shanghai Zuohe Investment Management Co., Ltd.* (上海佐禾投資管理有限 公司) ("Zuohe Investment") as to 40% and 60%, respectively as at 30 June 2024. Zuohe Investment was owned by Dr. Liu and an independent third party as to 51% and 49% as at 30 June 2024, respectively. For the purpose of the SFO, Dr. Liu is deemed to have an interest in the Shares held by Apricot Capital and Zuohe Investment.
• (8) Pursuant to a share charge where Hainan Haiyao Co., Ltd. (海南海藥股份有限公司) ("Hainan Haiyao") charged 158,882,115 Shares to China Citic Bank Co., Ltd., Haikou Branch ("China Citic Bank"), China Citic Bank had a security interest in 158,882,115 Shares which were beneficially owned by Hainan Haiyao.
• (9) Pursuant to a share charge where Ms. Sijia XU charged 51,000,000 Shares to Haikou City Rural Credit Cooperatives* (海口市農村信 用合作聯社), Haikou City Rural Credit Cooperatives had a security interest in 51,000,000 Shares which were beneficially owned by Ms. Xu.

Save as disclosed above, as at 30 June 2024, the Directors were not aware of any other person or corporation having an interest or short position in the Shares and underlying Shares of the Company as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO.

* For identification purposes only

CHANGE IN INFORMATION OF DIRECTORS

There was no change in information of Directors, which is required to be disclosed pursuant to Rule 13.51B of the Listing Rules, since the publication of the annual report of the Company for the financial year ended 31 December 2023.

Save as disclosed above, there is no other information required to be disclosed pursuant to Rule 13.51B of the Listing Rules.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed securities during the Reporting Period.

MODEL CODE FOR DIRECTORS' SECURITIES TRANSACTIONS

The Company has adopted the Model Code as its own code of conduct regarding Directors' securities transactions.

Having made specific enquiries with each of the Directors, all the Directors confirmed that they had complied with such code of conduct throughout the Reporting Period.

SECURITIES TRANSACTIONS BY RELEVANT EMPLOYEES

The Company has adopted the Model Code as its written guidelines (the "Employee Written Guidelines") in respect of securities dealings by relevant employees who are likely to be in possession of unpublished price-sensitive information of the Company. No incident of non-compliance of the Employee Written Guidelines by the relevant employees was noted by the Company throughout the Reporting Period.

CORPORATE GOVERNANCE

The Board is committed to achieving high corporate governance standards. The Board believes that high corporate governance standards are essential to providing a framework for the Group to safeguard the interests of Shareholders, enhance corporate value, formulate its business strategies and policies, and enhance its transparency and accountability. The Company has applied the principles and code provisions as set out in Part 2 of the CG Code.

The Company has complied with all applicable code provisions as set out in the CG Code during the Reporting Period, except for code provision C.2.1 as explained below.

Chairman and Chief Executive Officer

Code provision C.2.1 stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same individual.

Dr. Shui On LEUNG is currently both the Chairman and the Chief Executive Officer of the Company.

The Board believes that Dr. Leung, being the founder and the chief executive officer of the Company, has extensive understanding of the Company's business. The joining of Mr. Shanchun WANG as the executive Director and President (China) of the Company who is responsible for overseeing and managing the Group's overall operation, including production and commercialisation, as well as clinical development, in China, has also greatly supported Dr. Leung in his focus on research & development, business development and strategic opportunity exploration and identification for the Group, and thus Dr. Leung is the Director best suited, among all Directors, to act as the chief executive officer. The Board further believes that the combined role of chairman and chief executive officer will not impair the balance of power and authority between the Board and the management of the Company, given that: (i) decisions to be made by the Board require approval by at least a majority of the Directors; (ii) Dr. Leung and other Directors are aware of and have undertaken to fulfil their fiduciary duties as Directors, which require, amongst other things, that they act for the benefit and in the best interests of the Company as a whole and will make decisions for the Company accordingly; (iii) the balance of power and authority is protected by the operations of the Board, which consists of two executive Directors (Dr. Leung and Mr. Shanchun WANG who was appointed as an executive Director in February 2024), five non-executive Directors and four independent nonexecutive Directors, and has a fairly strong independence element; and (iv) the overall strategies and other key business, financial, and operational policies of the Company are made collectively after thorough discussions at both the Board and senior management levels. Therefore, the Board considers that it is in the best interests of the Group for Dr. Leung to take up both roles for business development and effective management, and the deviation from the code provision C.2.1 of the CG Code is appropriate in such circumstances.

NO MATERIAL CHANGES

Save as disclosed in this interim report, during the Reporting Period, there were no other material changes in respect of the Company that needed to be disclosed under paragraph 46 of Appendix D2 to the Listing Rules.

REVIEW OF RESULTS

The Audit Committee currently comprises four independent non-executive Directors being Mr. Ping Cho Terence HON (Chairman), Mr. George William Hunter CAUTHERLEY, Dr. Chi Ming LEE and Mr. Dylan Carlo TINKER. The Audit Committee has reviewed this interim report.

The Audit Committee has reviewed, alongside the Company's management and external auditor, the accounting principles and policies adopted by the Group, auditing and internal control and financial reporting matters including the review of the unaudited condensed consolidated financial statements for the Reporting Period. The independent review report of the external auditor is set out on page 23 of this interim report.

Definitions

"Audit Committee"	the audit committee of the Company
"Board"	the board of Directors
"CG Code"	the Corporate Governance Code as set out in Appendix C1 to the Listing Rules
"Company" or "our Company"	SinoMab BioScience Limited (中國抗體製藥有限公司), a company incorporated in Hong Kong on 27 April 2001 with limited liability
"Director(s)"	the director(s) of the Company
"FDA"	the United States Food and Drug Administration
"GMP"	Good Manufacturing Practice
"Group" or "our Group"	the Company and its subsidiaries
"HKFRSs"	the Hong Kong Financial Reporting Standards
"HK\$" or "HKD" or "Hong Kong Dollars"	Hong Kong dollars and cents respectively, the lawful currency of Hong Kong
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or otherwise modified from time to time
"Model Code"	the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules
"NMPA"	National Medical Products Administration of the PRC
"Nomination Committee"	the nomination committee of the Company
"PRC" or "China"	the People's Republic of China
"Prospectus"	the prospectus of the Company dated 31 October 2019
"R&D"	research and development
"Remuneration Committee"	the remuneration committee of the Company
"Reporting Period"	six months ended 30 June 2024

Definitions

"RMB" or "Renminbi"	the lawful currency of the PRC
"SFO"	the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended from time to time
"Share(s)"	ordinary share(s) in the share capital of the Company
"Shareholder(s)"	holder(s) of the Shares
"Skytech Technology"	Skytech Technology Limited, a limited company incorporated in the British Virgin Islands on 2 January 2001 and wholly-owned by Dr. Shui On LEUNG
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subsidiaries"	the Company's subsidiaries and "subsidiaries" has the meaning ascribed to it under section 2 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance Chapter 32 of the Laws of Hong Kong) (as amended from time to time)
"Suzhou Sinovent Pharmaceuticals Co., Ltd. (蘇州信諾維醫藥科技股份 有限公司)"	now known as Evopoint Biosciences Co., Ltd. (蘇州信諾維醫藥科技股份有限公司), a connected person of the Company
"U.S.", "U.S.A." or "United States"	the United States of America, its territories, its possessions and all area subject to its jurisdiction
"we", "our" or "us"	the Company or the Group as the context requires
"Xingze Xinghe"	Shanghai Xingze Xinghe Startup Investment Centre (Limited Partnership) (上海杏澤興 禾創業投資中心(有限合夥)), formerly known as Shanghai Xingze Xinghe Investment Management Centre (Limited Partnership) (上海杏澤興禾投資管理中心 (有限合夥)), a limited partnership established in the PRC on 8 January 2016
"Xingze Xingzhan"	Shanghai Xingze Xingzhan Enterprise Management Centre (Limited Partnership)* (上海 杏澤興瞻企業管理中心(有限合夥)), a limited partnership established in the PRC on 16 October 2018
"%"	per cent

* For identification purposes only