Annual Report 2023

MANAGEMENT DISCUSSION AND ANALYSIS 13 The United Laboratories International Holdings Limited Annual Report 2023 – In August 2023, UBT251 Injection , a Class 1 new drug used to treat such diabetes II of adults, was approved for clinical trials. In September, it was approved to address the indications of overweight, obesity and non-alcohol fatty liver disease. In addition, in September, the clinical trial application for the new drug address diabetes II of adults, overweight or obesity indications was approved by the US Food and Drug Administration (“US FDA”). – In September 2023, Class 1 new drug TUL01101 Tablets was approved for clinical trials. The drug, used to treat medium and severe atopic dermatitis, features a definite efficacy and minor side effect. As to the quality and efficacy consistency assessment of generic drugs (“Consistency Assessment”), the Group successively passed the Consistency Assessment with regard to amoxicillin capsules (specification: 0.5g), tazobactam sodium for injection (specification: 2.25g), Ibuprofen Sustained Release Capsules (specification: 0.3g) and the Meropenem for Injection (specifications: 0.25g; 0.5g). The Group will continuously advance the new drug research, development and Consistency Assessment, and provide more safe and high-quality drug choices for patients. Optimising Financial Structure In terms of finance, the Group continuously optimised the financial structure to improve liquidity by adjusting the ratio of onshore and offshore borrowings and reducing the finance costs. During the year, the finance cost of the Group were RMB66.9 million, representing a year-on-year decrease of 18.0%. As at 31 December 2023, the Group’s net bank balances and cash (after deducting bank borrowings and trade payables under supplier finance arrangement) amounted to RMB1,755.5 million (2022: RMB1,394.6 million). The Group will actively adjust its financial structure by using onshore RMB as the main borrowing currency in its efforts to enhance financial flexibility and efficiency in the utilisation of funds and to maintain a healthy financial position. Liquidity and Financial Resources As at 31 December 2023, the Group had pledged bank deposits, bank balances and cash amounted to approximately RMB5,234.2 million (2022: RMB5,437.8 million). As at 31 December 2023, the Group had interest-bearing borrowings of approximately RMB1,496.9 million denominated in Renminbi (2022: RMB2,455.1 million denominated in Hong Kong dollars and Renminbi) with maturity within five years. Borrowings of approximately RMB23.9 million is on a fixed rate basis while the remaining balance of approximately RMB1,473.0 million is on a floating rate basis. 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.