As is customary in the pharmaceutical industry, we use CROs to conduct and support our preclinical studies and clinical trials under our close supervision and overall management.
Summary · p. 14
We have adopted procedures to ensure that production qualifications, facilities and processes of CMOs/CDMOs comply with the relevant regulatory requirements and our internal guidelines.
Business · p. 309
To ensure the production process consistency, we will collaborate with reputable CMOs/CDMOs to manufacture certain drug candidates for pivotal clinical trials, followed by initial commercialization.
We outsource and subcontract the manufacturing of our products to multiple contract manufacturers located in China. We believe that outsourcing the manufacturing of our products enables greater scale and flexibility at lower costs than establishing our own manufacturing facilities.
Business · p. 187
Although we generally do not restrict our outsourcing and subcontracting partners to supply fitness products to other parties, they are required to supply exclusively to us the fitness products that are protected under our intellectual properties, such as smart fitness devices and certain fitness gear collections.
Business · p. 187
Although we do not have employees stationed at the facilities of our outsourcing and subcontracting partners, our quality control team performs sampling inspection to ensure that our outsourcing and subcontracting partners fully adhere to our quality standards.
Our products are manufactured by selected third-party manufacturers in China that specialize in the manufacturing of skincare products or nutritional food.
Business · p. 249
We from time to time enter into OEM cooperation framework agreements with OEM manufacturers in relation to the production of various products.
Business · p. 254
We are entitled to check and inspect Hangzhou Hengmei’s factories and quality control system.
In 2020, 2021 and 2022, subcontracting costs amounted to RMB14.2 million, RMB20.7 million and RMB20.1 million, respectively, which accounted for approximately 9.9%, 11.2% and 9.9%, respectively, of our total cost of sales.
Business · p. 277
To ensure the overall quality of our subcontractors, we maintain a list of subcontractors based on our series of assessment standards, including, among others, the amount of registered capital, qualifications, size of overall operations, track record performance, management style and operational procedures.
Business · p. 278
We also conduct annual surveys among property owners and residents regarding the quality of services provided by our subcontractors.
We currently outsource certain manufacturing activities, primarily the production of small molecules, to industry-recognized CMOs in China, and we intend to continue doing so in the future.
Business · p. 382
To monitor and evaluate the services of our CMOs, we conduct quality assurance audit programs to ensure, among other criteria, full compliance of our CMOs with the relevant regulatory requirements.
Business · p. 382
In addition to conducting our core R&D activities in-house, we also engage reputable CROs to manage, conduct, and support our preclinical research and clinical trials.
For the years ended 31 December 2020, 2021 and 2022, we engaged 37, 26 and 18 contractors in the PRC who were engaged in engineering and construction business for the construction of heat service facilities such as primary distribution pipelines and heat exchange stations, respectively.
Business · p. 272
We would engage qualified external contractors for carrying out the construction. The qualified external contractors engaged by us would be responsible for constructing the facilities as well as installing and testing the relevant equipment, instruments and systems.
Business · p. 227
It is our Group's policy to select our contractors for the construction of pipelines and heat service facilities through competitive tender process or competitive negotiation.
We collaborate with our CDMO partners (including both CMOs and CDMOs) to manufacture a portion of our drug candidates to supply for pre-clinical studies, clinical trials and potentially for the commercial-scale production of large molecule drugs.
Business · p. 325
In 2021 and 2022, the expenses related to CDMO partners included in our research and development expenses were RMB42.6 million and RMB98.3 million, respectively.
Business · p. 327
LAE002, the drug candidate that we expect to first commercialize, will be initially manufactured by CDMOs upon marketing approval and later transferred to our own manufacturing facility upon approval by competent regulatory authority.
For other product dosage forms that cannot be produced at this stage in our Wuxi plant, we engage CDMO for shared production facilities, reduced investment in fixed assets, and reduced R&D and conversion time.
Business · p. 321
In terms of the involvement and contributions of each of the major CDMO partners (including CMOs) to the development of our product candidates, we collaborate with our CDMO partners to manufacture a portion of our product candidates to supply for pre-clinical studies and clinical trials.
Business · p. 324
We maintained cooperation relationship with 27 and 39 CRO and CDMO partners in 2021 and 2022, respectively.
To balance efficiency, service quality and scalability, and in order to satisfy our customers' nationwide, diverse and complete technical support demand, we also collaborate with third-party technical companies for their engineers to support our managed IT services in geographical areas where we have less presence.
In order to maintain a flexible workforce, and considering our diversified services portfolio and the needs to expand our engineering and technical services segment, we will need to rely on subcontractors to provide an external labor force to provide engineering and technical services to our customers.
Business · p. 201
Starting from the year ended December 31, 2019, we made adjustments to our engineering and technical services portfolio so that we would offer more services for labor-intensive on-site construction work, on which we will require the procurement of a subcontracted labor force.
Business · p. 201
Whilst we are also in the process of gradually building up in-house engineering and technical services team, our Directors estimate that we will continue to rely on subcontractors to provide a certain level of workforce for this business segment in the future.
We enter into service agreements with labour service suppliers, who engage marketers as their employees or contractors.
Business · p. 238
With a view to mitigating our risks exposures, we have established control measures to assess risks and determine whether to purchase insurances, such as third-party liability insurance, exhibition insurance, accident insurance, etc., for different projects having considered different customers' requirements and would generally require our labour service suppliers (i.e. suppliers which provide us with third-party marketers) to purchase such insurances.
During the Track Record Period, our major suppliers primarily consisted of (i) suppliers of raw materials and consumables for our vaccine and therapeutic biologics development, (ii) construction service providers, (iii) property leasing providers and (iv) CROs, who provide third-party contracting services for research and development.
Business · p. 314
During the Track Record Period, we engaged 18 CROs and one SMO based on the needs of our pre-clinical and clinical studies.
Business · p. 316
Our procurement of CRO and SMO services will continue to depend on the cadence of our clinical and pre-clinical studies.
We engage subcontractors to perform more labour intensive works such as the installation and application of the passive fire protection materials and components to enable us to control our staff costs and focus on the most crucial aspects of a passive fire protection works project
Business · p. 165
Despite such delegation, we maintain control over our subcontractors and monitor the quality of the services provided.
Business · p. 165
For the years ended 30 June 2020, 2021 and 2022 and the four months ended 31 October 2022, we incurred subcontracting fees of approximately HK$55.5 million, HK$59.7 million, HK$95.5 million and HK$52.3 million, respectively.
Additionally, we also work with selected third-party distilleries which produce base liquor for us strictly in accordance with our specifications and requirements.
Financial Information · p. 266
These collaborated distilleries provided us with approximately 7,404 tons, 20,546 tons and 7,817 tons of sauce aroma base liquor in 2020, 2021 and 2022, respectively.
Financial Information · p. 266
As we continue to build additional production facilities to enhance our production capacity, we expect to gradually reduce sourcing base liquor from these collaborated distilleries.
Our suppliers during the Track Record Period were mainly providers for services including server, research and development, cloud computing, storage capacity and telecommunications.
Business · p. 245
During the Track Record Period, we engaged third-party research and development service providers mainly for the upgrade of our CRM system, as well as the development of certain module components of our Powershopy platform.
Business · p. 245
We select suppliers based on a variety of factors, including their qualification, reputation, pricing and overall services.
For each of FY2019, FY2020, FY2021 and 3Q2022, the total labour and construction subcontracting fees paid by us to the subcontractors engaged by us amounted to approximately RMB569.0 million, RMB569.6 million, RMB644.4 million and RMB502.1 million, respectively, accounting for approximately 34.7%, 36.0%, 39.6% and 41.2% of our total cost of sales, respectively.
Business · p. 277
We follow strict criteria in selecting subcontractors and maintain a list of qualified subcontractors which we would usually choose from.
Business · p. 277
In the event of any material failure by our subcontractors to meet our safety or quality standards, we may cease to work with and/or claim damages from them.
During the years ended December 31, 2019, 2020 and 2021 and the nine months ended September 30, 2022, the transaction costs of the crew manning services procured from Haizhou Crew Manning (Qingdao) and Sinostar Crew Manning Co., Ltd amounted to approximately USD11.5 million, USD19.3 million, USD25.8 million and USD14.2 million, respectively, representing approximately 45.8%, 57.8%, 53.9% and 34.8% of our total crew manning expenses for the corresponding periods.
Business · p. 268
Our Directors consider that outsourcing crew manning to our related parties Haizhou Crew Manning (Qingdao) and Sinostar Crew Manning during the Track Record Period is in our commercial interests as our related parties are able to provide the necessary crewing services that suit our needs most appropriately at service fees not higher than service fees we pay Independent Third Parties in comparable transactions.
Business · p. 268
Completion of the transfer of shares in Haizhou Crew Manning (Qingdao) took place on October 27, 2022, and the transfer of shares in Sinostar Crew Manning took place on November 14, 2022.