Annual Report 2021

MANAGEMENT DISCUSSION AND ANALYSIS 11 The United Laboratories International Holdings Limited Annual Report 2021 The Group also made positive progress in the Quality and Efficacy Consistency Evaluation of Generic Drugs (“Consistency Evaluation”). In January 2021, the Group obtained the Drug Registration Certificate and deemed to have passed the Consistency Evaluation for its oral hypoglycemic drug Glipizide Tablets (specification: 5mg) and Tenofovir Dipivoxil Fumarate Tablets (specification: 300mg) for the treatment of chronic hepatitis B and HIV-1 infection in adults. In April, the Amoxicillin Capsule (specification: 0.25g) submitted by The United Laboratories, Limited (Hong Kong) passed the Consistency Evaluation. In May, the Memantine Hydrochloride Tablets (specification: 10mg), a drug to treat Alzheimer’s disease, passed the Consistency Evaluation. As of 31 December 2021, there are six products of the Group that have passed the Consistency Evaluation, further enhancing its market competitiveness. In order to actively expand the R&D of biological drugs and realize the leapfrog development of the Group’s business, the Group established Zhuhai United Bio-Pharmaceutical Co., Ltd. （珠海聯邦生物醫藥有限公司） and The United Bio-Technology (Hengqin) Co., Ltd. （聯邦生物科技（珠海橫琴）有限公司） . The Company will rely on the Group’s existing technology platform and research team to expand investment in biological fields and high-end R&D talents, and deepen cultivation and expansion in the fields of diabetes drugs, monoclonal antibody drugs, chronic disease management, cooperation in research institutes in Guangdong-Hong Kong-Macao Greater Bay Area, and carry out drug molecular screening, process R&D, clinical trials, declaration and registration, market production, commissioned production and other related businesses. Optimising Financing Structure The Group reduced its finance costs by adjusting the ratio of domestic and offshore borrowings, and continued to optimise the financial structure and improve liquidity. During the Year, the finance costs of the Group decreased from RMB181.3 million in 2020 to RMB60.2 million, representing a significant decrease of 66.8% year-on-year. As at 31 December 2021, the Group’s net bank balances and cash (after deducting borrowings and trade payables under supplier finance arrangement) amounted to RMB212.6 million (2020: RMB20.3 million) and its financial position remained stable. Liquidity and Financial Resources As at 31 December 2021, the Group had pledged bank deposits, bank balances and cash amounted to approximately RMB4,158.4 million (2020: RMB3,437.0 million). As at 31 December 2021, the Group had interest-bearing borrowings of approximately RMB1,831.1 million (2020: RMB2,209.7 million), which were denominated in Hong Kong dollars, Renminbi, Euro and United States dollars with maturity within five years. Borrowings of approximately RMB18.4 million are fixed rates loans while the remaining balance of approximately RMB1,812.7 million is at floating rates. The directors expect that all such borrowings will either be repaid by internally generated funds or rolled over upon maturity and will continue to provide funding to the Group’s operations.