Investments in Equity Investees (Tables)
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6 Months Ended |
Jun. 30, 2023 |
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| Schedule of composition of equity investees |
| | | | | | | June 30, | | December 31, | | | 2023 | | 2022 | | | | (in US$’000) | Shanghai Hutchison Pharmaceuticals Limited (“SHPL”) | | 37,740 | | 73,461 | Other (note) | | — | | 316 | | | 37,740 | | 73,777 |
Note: On April 13, 2023, the Group completed a transaction to sell its entire investment in a former equity investee to a third party.
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| Summarized balance sheets for equity investee SHPL |
| | | | | | | June 30, | | December 31, | | | 2023 | | 2022 | | | | (in US$’000) | Current assets | | 228,185 | | 214,267 | Non-current assets | | 74,950 | | 80,062 | Current liabilities | | (163,222) | | (147,952) | Non-current liabilities | | (69,791) | | (4,944) | Net assets | | 70,122 | | 141,433 |
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| Summarized statements of operations for equity investee SHPL |
| | | | | | | Six Months Ended June 30, | | | 2023 | | 2022 | | | | (in US$’000) | Revenue | | 235,271 | | 212,413 | Gross profit | | 175,750 | | 165,208 | Interest income | | 438 | | 623 | Finance cost (note (a)) | | (1,022) | | — | Income before taxation | | 84,064 | | 78,472 | Income tax expense (note (b)) | | (13,840) | | (11,209) | Net income (note (c)) | | 70,224 | | 67,263 |
Notes: | (a) | On January 31, 2023, SHPL declared dividends of US$146,974,000. Finance cost is from the accretion of the US$3,654,000 discount recorded on the dividends payable. |
| (b) | The main entity within SHPL group has been granted the High and New Technology Enterprise (“HNTE”) status (the latest renewal of this status covered the years from 2020 to 2022). This entity was eligible to use a preferential income tax rate of 15% for the year ended December 31, 2022 on this basis. The entity is in the process of applying to renew the HNTE status for another three years. Management considers that the renewal of HNTE status will be granted and the preferential income tax rate of 15% continues to be applicable for the six months ended June 30, 2023. |
| (c) | Net income is before elimination of unrealized profits on transactions with the Group. The amounts eliminated were approximately US$2,000 and US$80,000 for the six months ended June 30, 2023 and 2022 respectively. |
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| Reconciliation of the summarized financial information presented to the carrying amount of investment in SHPL |
| | | | | | | 2023 | | 2022 | | | | (in US$’000) | Opening net assets as at January 1 | | 141,433 | | 145,741 | Net income | | 70,224 | | 67,263 | Dividends declared | | (146,974) | | (45,385) | Discount on dividends payable | | 3,654 | | — | Other comprehensive income/(loss) | | 1,785 | | (8,544) | Closing net assets as at June 30 | | 70,122 | | 159,075 | Group’s share of net assets | | 35,061 | | 79,538 | Goodwill | | 2,795 | | 3,000 | Elimination of unrealized profits on sales to SHPL | | (116) | | — | Carrying amount of investments as at June 30 | | 37,740 | | 82,538 |
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| Schedule of SHPL commitments |
| | | | | June 30, | | | 2023 | | | (in US$’000) | Property, plant and equipment | | | Contracted but not provided for | | 1,168 |
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