​​ABOUT SANAI HEALTH INDUSTRY
Corporate Profile
Chairman's Statement
Directors and Senior Management
Awards and Achievements
主席報告
To all Shareholders:
On behalf of the board (the “Board”) of directors (the “Directors”) of Sanai Health Industry Group Company Limited (formerly known as Wuyi International Pharmaceutical Company Limited) (“Sanai Health Industry” or the “Company”), I am pleased to present to the shareholders the annual results of the Company and its subsidiaries (collectively, the “Group”) for the financial year ended 31 December 2017.

As the executive director and chairman of the Company in 2017, it is my pleasure to experience such an extraordinary year with all the staff of the Group. The Company has changed its name to Sanai Health Industry Group Company Limited in 2017 which representing a brand new start.

BUSINESS REVIEW
Although the government has introduced various medical reformation measures, the size of pharmaceutical market is huge and under growth. However, with the significant structural changes, small and medium enterprises’ ability against increasing costs and changing policies are relatively weak. Enterprises with self-developed sales network, exclusive medicine and innovative medicine would have their market shares significantly increase during the shuffle period. Meanwhile, the underground steam pipelines of the Haixi plant of the wholly-owned subsidiary of the Group, Fujian Sanai Pharmaceutical Company Limited (“Fujian Sanai”) ruptured at the end of 2016. Due to the complexity, the repair lasted until February this year and caused various work suspension of Fujian Sanai during the period, which resulted in loss of customers and market share. The national implementation of the “Two-Invoice System” greatly affected the original sales system of Fujian Sanai. It lost certain major distributor customers and obtained more direct end customers. Fujian Sanai has to input more resources on products promotion. Another wholly-owned subsidiary of the Group, Fuzhou Sanai Pharmaceutial Company Limited (“Fuzhou Sanai”) was affected by the “Two-Invoice System” and production suspension due to internal rectification. The Perilla Oil Capsule was not listed in the National Reimbursement Drug List, instead, competitive products was listed in the National Reimbursement Drug List, which resulted in the plunge in sales of Perilla Oil Capsule. The two subsidiaries Fujian Sanai and Fuzhou Sanai are the major operating units of the Group, the aggregate results dropped by approximately 90% to RMB30.2 million, which led to the consolidated results of the Group decreased by 76% to RMB62.5 million. The assets of pharmaceutical sector of the Group are subject to assessed and impaired due to the decrease of results. The shareholders should pay attention that the impairment does not represent loss, damage or obsolete of the Company’s assets or cash loss of the Company but only an accounting treatment.

The Group would develop a more diversified business mix outside the pharmaceutical industry so to cope with the increasingly fierce competition in pharmaceutical industry. During the year, the accumulated financing facilities were approximately HK$147 million as a result of exercise of share option and placing finance. Among which, approximately HK$50 million was applied to finance leasing business and general trading business. The finance leasing business recorded a profit of RMB1.88 million this year, pursuant to the agreement that entered by the Company, the finance leasing business would achieve a higher growth rate in 2018. The finance leasing company will commence direct leasing business in 2018 which lease rehabilitation and treatment equipment and devices to individuals and operating entities. Such business matches with the general strategy of the Group.

On November 2017, the subsidiary under the Company, Zhejiang Sanai Biotechnology Company Limited and Yangtze Delta Region Institute of Tsinghua University in Zhejiang officially entered into an agreement to set up Tsinghua Yangtze Delta Region Sanai Precision Medicine Research and Development Center. I am honored to invite Professor Zhang Rongqing as an executive director of the Company and responsible for the business exploration on Precision medicine sector and biotechnology sector. I believe that by combining the research efforts of Yangtze Delta Region Institute of Tsinghua University and the rich resources of Professor Zhang in biotechnology sector, the Company will gradually increase competitive products which make the Company stands out in the industry.

FUTURE PROSPECTS
The Group aims to be a comprehensive health industry group, providing safe, reliable, high-quality health products and health services to the society. Health products include pharmaceutical products, healthcare products, food, medical equipment, while health services include medical detection, rehabilitation services, and medical services. The Group has to set up platforms on organizational structure level so as to achieve such goal. The Group would set brand-building as core and integrate platform resources, make use of the capital platform and introduce strategic investment and strategic partners, encourage internal innovation and valuecreating and profit-sharing. The crucial foundation of platform structure is to realize networking and digitization, the Group will embrace the internet completely and make digitization as the core strategy of the Group. The first step is to realize networking and exponential growth. The Group has to provide more products suitable for the public while creating products with self-distribution ability. The customers can voluntarily share the products of the Company after using them. By gathering customers continuously, stable sales channels of the Company can be formed. The second step is to improve the interaction and connection between customers so that the customers of the Group can transform to the business partners of the Company and participate in product design and promotion. The Company develops plans for research and development and sales with big data. The third step is to realize networking of the shareholders of the Company in the hope that turning the customers, business partners and staff of the Group to shareholders of the Company and share the profit of organizational development.

Other than networking and digitization of platforms, brand-building is another mission of the Group. The China consumers is growing rapidly, the information volume is larger than ever. They have earned sufficient bargaining power on the internet. The reputation promotion is the main way of brand promotion. The brand is representing the values and attitude of a company. We shall carefully maintain the Sanai brand by valuing the products quality and commitment on high standard of raw material and craft, otherwise we would be casted away by consumers in new era.

I believe that the path of transformation is challenging yet with bright future. The political and economic environment of China after the 19th Communist Party of China National Congress will the most stable one in the world. With people who are hard-working and willing to learn, the innovative ability of China is building constantly with the speed accelerating at the same time. We have to take the chance of this high speed train, to change ourselves with our own initiative and equipped with networking so to gain a position of winners in the future. The problem was not arisen overnight. We have to reflected on the failings and conclude the lesson we learnt. By improving the management system and talent team in a practical manner, the Group would face our customers sincerely and provide genuine products and services to the society.

I would like to thank the shareholders for the trust on the management, all staff for the concerted efforts and business partners for great support again. I would also like to hereby thank for the dedication of all directors.


By Order of the Board
Chen Chengqing
Chairman

Hong Kong, 20 April 2018

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