Hutchison China MediTech Limited
Condensed Consolidated Balance Sheets
(in US$'000, except share data)

	Note	September 30, 2019		December 31, 2018

		(Unaudited)
Assets
Current assets
Cash and cash equivalents	3	97,082		86,036
Short-term investments	4	104,493		214,915
Accounts receivable—third parties	5	40,332		40,176
Inventories	6	15,653		12,309
Other current assets		19,521		17,105

Total current assets		277,081		370,541
Property, plant and equipment		18,528		16,616
Right-of-use assets	7	6,566		—
Investments in equity investees	8	145,337		138,318
Other assets		6,580		6,643

Total assets		454,092		532,118



Liabilities and shareholders' equity
Current liabilities
Accounts payable	9	23,029		25,625
Other payables, accruals and advance receipts	10	74,753		56,327
Lease liabilities	7	3,497		—
Other current liabilities		4,066		3,527

Total current liabilities		105,345		85,479
Lease liabilities	7	3,500		—
Long-term bank borrowings	11	—		26,739
Other liabilities		7,460		7,645

Total liabilities		116,305		119,863
Commitments and contingencies	12

Company's shareholders' equity
Ordinary shares; $0.10 par value; 1,500,000,000 shares authorized; 666,786,450 and 666,577,450 shares issued at September 30, 2019 and December 31, 2018 respectively	13	66,679		66,658
Additional paid-in capital		512,585		505,585
Accumulated losses		(260,172	)	(183,004	)
Accumulated other comprehensive loss		(5,575	)	(243	)

Total Company's shareholders' equity		313,517		388,996
Non-controlling interests		24,270		23,259

Total shareholders' equity		337,787		412,255

Total liabilities and shareholders' equity		454,092		532,118

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

Hutchison China MediTech Limited
Condensed Consolidated Statements of Operations
(Unaudited, in US$'000, except share and per share data)

		Nine Months Ended September 30,

	Note	2019		2018
Revenues
Goods—third parties		130,225		114,623
—related parties	17(i)	5,334		5,243
Services—commercialization—third parties		2,584		8,246
—collaboration research and development—third parties		10,468		25,581
—research and development—related parties	17(i)	373		7,308
Other collaboration revenue—royalties—third parties		2,562		—

Total revenues	15	151,546		161,001

Operating expenses
Costs of goods—third parties		(111,165	)	(95,128	)
Costs of goods—related parties		(3,718	)	(3,685	)
Costs of services—commercialization—third parties		(1,929	)	(6,303	)
Research and development expenses	16	(100,735	)	(88,732	)
Selling expenses		(11,660	)	(13,657	)
Administrative expenses		(30,291	)	(21,967	)

Total operating expenses		(259,498	)	(229,472	)

Loss from operations		(107,952	)	(68,471	)
Other income, net of other expenses		5,312		4,878

Loss before income taxes and equity in earnings of equity investees		(102,640	)	(63,593	)
Income tax expense	18	(2,559	)	(2,995	)
Equity in earnings of equity investees, net of tax	8	30,508		11,050

Net loss		(74,691	)	(55,538	)
Less: Net income attributable to non-controlling interests		(1,771	)	(2,731	)

Net loss attributable to the Company		(76,462	)	(58,269	)



Losses per share attributable to the Company—basic and diluted (US$ per share)	19	(0.11	)	(0.09	)
Number of shares used in per share calculation—basic and diluted	19	665,612,400		664,003,277

Note: The losses per share attributable to the Company—basic and diluted presented were adjusted retroactively for the nine months ended September 30, 2018 to take into account the share split approved by ordinary resolution at the Extraordinary General Meeting of the Company held on May 29, 2019, pursuant to which each ordinary share was subdivided into 10 ordinary shares with effect from May 30, 2019.

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

Hutchison China MediTech Limited
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited, in US$'000)

	Nine Months Ended September 30,

	2019		2018
Net loss	(74,691	)	(55,538	)
Other comprehensive loss
Foreign currency translation loss	(6,093	)	(7,004	)

Total comprehensive loss	(80,784	)	(62,542	)
Less: Comprehensive income attributable to non-controlling interests	(1,010	)	(1,777	)

Total comprehensive loss attributable to the Company	(81,794	)	(64,319	)

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

Hutchison China MediTech Limited
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited, in US$'000, except share data in '000)

	Ordinary Shares Number	Ordinary Shares Value	Additional Paid-in Capital		Accumulated Losses		Accumulated Other Comprehensive Income/(Loss)		Total Company's Shareholders' Equity		Non- controlling Interests		Total Shareholders' Equity

As at January 1, 2018	664,470	66,447	496,960		(108,184	)	5,430		460,653		23,230		483,883
Net (loss)/income	—	—	—		(58,269	)	—		(58,269	)	2,731		(55,538	)
Issuances in relation to share option exercises	886	89	655		—		—		744		—		744
Share-based compensation
Share options	—	—	5,117		—		—		5,117		12		5,129
Long-term incentive plan ("LTIP")	—	—	2,932		—		—		2,932		8		2,940

	—	—	8,049		—		—		8,049		20		8,069
LTIP—treasury shares acquired and held by Trustee	—	—	(5,451	)	—		—		(5,451	)	—		(5,451	)
Transfer between reserves	—	—	15		(15	)	—		—		—		—
Foreign currency translation adjustments	—	—	—		—		(6,050	)	(6,050	)	(954	)	(7,004	)

As at September 30, 2018	665,356	66,536	500,228		(166,468	)	(620	)	399,676		25,027		424,703



As at December 31, 2018	666,577	66,658	505,585		(183,004	)	(243	)	388,996		23,259		412,255
Impact of change in accounting policy (Note 2)	—	—	—		(655	)	—		(655	)	(16	)	(671	)

As at January 1, 2019	666,577	66,658	505,585		(183,659	)	(243	)	388,341		23,243		411,584
Net (loss)/income	—	—	—		(76,462	)	—		(76,462	)	1,771		(74,691	)
Issuances in relation to share option exercises	209	21	134		—		—		155		—		155
Share-based compensation
Share options	—	—	5,400		—		—		5,400		12		5,412
LTIP	—	—	1,761		—		—		1,761		5		1,766

	—	—	7,161		—		—		7,161		17		7,178
LTIP—treasury shares acquired and held by Trustee	—	—	(346	)	—		—		(346	)	—		(346	)
Transfer between reserves	—	—	51		(51	)	—		—		—		—
Foreign currency translation adjustments	—	—	—		—		(5,332	)	(5,332	)	(761	)	(6,093	)

As at September 30, 2019	666,786	66,679	512,585		(260,172	)	(5,575	)	313,517		24,270		337,787

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

Hutchison China MediTech Limited
Condensed Consolidated Statements of Cash Flows
(Unaudited, in US$'000)

		Nine Months Ended September 30,

	Note	2019		2018
Net cash used in operating activities	21	(63,526	)	(18,911	)

Investing activities
Purchases of property, plant and equipment		(5,614	)	(3,433	)
Deposits in short-term investments		(426,695	)	(688,786	)
Proceeds from short-term investments		537,117		759,229
Investment in an equity investee		—		(8,000	)

Net cash generated from investing activities		104,808		59,010

Financing activities
Proceeds from issuance of ordinary shares	14(i)	155		744
Purchases of treasury shares	14(ii)	(346	)	(5,451	)
Dividends paid to a non-controlling shareholder of a subsidiary		(1,282	)	—
Proceeds from bank borrowings	11	—		26,923
Repayment of bank borrowings	11	(26,923	)	(30,000	)
Payment of issuance costs		—		(34	)

Net cash used in financing activities		(28,396	)	(7,818	)

Net increase in cash and cash equivalents		12,886		32,281
Effect of exchange rate changes on cash and cash equivalents		(1,840	)	(1,955	)

		11,046		30,326
Cash and cash equivalents
Cash and cash equivalents at beginning of period		86,036		85,265

Cash and cash equivalents at end of period		97,082		115,591

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

Hutchison China MediTech Limited
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Hutchison China MediTech Limited (the "Company") and its subsidiaries (together the "Group") are principally engaged in researching, developing, manufacturing and marketing pharmaceutical products. The Group and its equity investees have research and development facilities and manufacturing plants in the People's Republic of China (the "PRC") and sell their products mainly in the PRC and Hong Kong.

As at September 30, 2019, the Group had accumulated losses of US$260,172,000 primarily due to its spending in drug research and development ("Drug R&D") activities. The Group regularly monitors current and expected liquidity requirements to ensure that it maintains sufficient cash balances and adequate credit facilities to meet its liquidity requirements in the short and long term. As at September 30, 2019, the Group had cash and cash equivalents of US$97,082,000, short-term investments of US$104,493,000 and unutilized bank borrowing facilities of US$146,282,000. Short-term investments comprised of bank deposits maturing over three months. The Group's operating plan includes the continued receipt of dividends from certain of its equity investees. Dividends received from equity investees for the nine months ended September 30, 2019 and 2018 were US$18,173,000 and US$23,526,000 respectively.

Based on the Group's operating plan, the existing cash and cash equivalents, short-term investments and unutilized bank borrowing facilities are considered to be sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next twelve months (the look-forward period used).

The interim unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, except for the adoption of Accounting Standards Codification ("ASC") 842, Leases ("ASC 842") as described below. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.

The comparative year-end condensed balance sheet data was derived from the annual audited consolidated financial statements, but is condensed to the same degree as the interim condensed balance sheet data.

The interim unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users have read or have access to the annual audited consolidated financial statements for the preceding fiscal year.

The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the interim

unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in determining items such as useful lives of property, plant and equipment, write-down of inventories, allowance for doubtful accounts, share-based compensation, impairments of long-lived assets, impairment of other intangible asset and goodwill, income tax expenses, tax valuation allowances, revenues and cost accruals from research and development projects. Actual results could differ from those estimates.

The Group applied ASC 842 to its various leases at the date of initial application of January 1, 2019. As a result, the Group has changed its accounting policy for leases as detailed below. The core principle of ASC 842 is that a lessee should recognize the assets and liabilities that arise from leases. Therefore, the Group recognizes in the condensed consolidated balance sheets liabilities to make lease payments (the lease liabilities) and right-of-use assets representing its right to use the underlying assets for their lease terms. The Group applied ASC 842 using the optional transition method by recognizing the cumulative effect as an adjustment to opening accumulated losses as at January 1, 2019. The comparative information prior to January 1, 2019 has not been adjusted and continues to be reported under ASC 840, Leases ("ASC 840").

The Group assessed lease agreements as at January 1, 2019 under ASC 842, except for short-term leases. The Group elected the short-term lease exception for leases with a term of 12 months or less and recognizes lease expenses for such leases on a straight-line basis over the lease term and does not recognize right-of-use assets or lease liabilities accordingly. As a result of this assessment, the Group recorded an aggregate US$0.7 million in additional lease expenses as a cumulative adjustment to opening accumulated losses upon adoption. Additionally, the Group recognized right-of-use assets and lease liabilities of US$5.7 million and US$6.4 million respectively as at January 1, 2019.

The lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessees' incremental borrowing rate as at January 1, 2019. The Group's weighted average incremental borrowing rate applied on January 1, 2019 was 3.97% per annum.

A reconciliation of the Group's reported operating lease commitments as at December 31, 2018 and the Group's lease liabilities recognized upon adoption of ASC 842 as at January 1, 2019 is as follows:

	(in US$'000)

Operating lease commitments as at December 31, 2018 (note (a))	8,835
Less: Leases not commenced as at January 1, 2019	(3,676	)
Less: Short-term leases	(5	)
Add: Adjustment as a result of the treatment for a termination option (note (b))	1,409
Less: Discount under the lessees' incremental borrowing rate as at January 1, 2019	(206	)

Lease liabilities recognized as at January 1, 2019	6,357

The Group recognized right-of-use assets as at January 1, 2019 measured at their carrying amounts as if ASC 842 had been applied since their commencement dates, but discounted using the lessees' incremental borrowing rate as at January 1, 2019.

There were no adjustments to net cash generated from/(used in) operating activities, investing activities or financing activities in the condensed consolidated statement of cash flows.

In applying ASC 842 for the first time, the Group has used the following practical expedients permitted by the standard: (i) no reassessment of whether any expired or existing contracts are or contain leases; (ii) no reassessment of the lease classification for any expired or existing leases; (iii) the exclusion of initial direct costs for the measurement of the right-of-use assets at the date of initial application; and (iv) the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group recognizes an obligation to make lease payments equal to the present value of the lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option.

Lease liabilities include the net present value of the following lease payments: (i) fixed payments; (ii) variable lease payments; and (iii) payments of penalties for terminating the lease if the lease term reflects the lessee exercising that option, if any. Lease liabilities exclude the following payments that are generally accounted for separately: (i) non-lease components, such as maintenance and security service fees and value added tax, and (ii) any payments that a lessee makes before the lease commencement date. The lease payments are discounted using the interest rate implicit in the lease or if that rate cannot be determined, the lessee's incremental borrowing rate being the rate that the lessee would have to pay to borrow the funds in its currency and jurisdiction necessary to obtain an asset of similar value, economic environment and terms and conditions.

An asset representing the right to use the underlying asset during the lease term is recognized that consists of the initial measurement of the operating lease liability, any lease payments made to the lessor at or before the commencement date less any lease incentives received, any initial direct cost incurred by the Group and any restoration costs.

After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense.

Payments associated with short-term leases are recognized as lease expenses on a straight-line basis over the period of the leases.

Subleases of right-of-use assets are accounted for similar to other leases. As an intermediate lessor, the Group separately accounts for the head-lease and sublease unless it is relieved of its primary obligation under the head-lease. Sublease income is recorded on a gross basis separate from the head-lease expenses. If the total remaining lease cost on the head-lease is more than the anticipated sublease income for the lease term, this is an indicator that the carrying amount of the right-of-use asset associated with the head-lease may not be recoverable, and the right-of-use asset will be assessed for impairment.

	September 30, 2019	December 31, 2018

	(in US$'000)
Cash at bank and on hand	87,322	78,556
Bank deposits maturing in three months or less (note (a))	9,760	7,480

	97,082	86,036



Denominated in:
US$ (note (b))	79,844	58,291
RMB (note (b))	12,071	23,254
UK Pound Sterling ("£") (note (b))	386	331
Hong Kong dollar ("HK$")	4,781	4,160

	97,082	86,036

Accounts receivable from contracts with customers, net of allowance for doubtful accounts, consisted of the following:

Substantially all accounts receivable are denominated in RMB, US$ and HK$ and are due within one year from the end of the reporting periods. The carrying values of accounts receivable approximate their fair values due to their short-term maturities.

Inventories, net of provision for excess and obsolete inventories, consisted of the following:

The Group leases various offices, factories and other assets. Lease contracts are typically within a period of 1 to 5 years.

Notes:

(a): Includes (i) US$0.9 million right-of-use asset for offices in the United States of America that is leased through July 2024 in which the contract has an option to renew the lease up to an additional 3 years; and (ii) US$1.1 million right-of-use asset for corporate offices in Hong Kong that is leased through May 2021 in which the contract has a termination option with 3 months advance notice. The renewal and termination options were not recognized as part of the right-of-use assets and lease liabilities.
(b): Includes US$0.3 million right-of-use asset for retail space in the United Kingdom that is leased through May 2022 which the Group has subleased through May 2022.

		Nine Months Ended September 30, 2019

		(in US$'000)
Lease expenses:
Short-term leases with lease terms equal or less than 12 months		173
Leases with lease terms greater than 12 months		2,421

		2,594



Sublease rental income		61



Cash paid on lease liabilities		2,701



Non-cash: Lease liabilities recognized from obtaining right-of-use assets		3,197

The weighted average remaining lease term and the weighted average discount rate as at September 30, 2019 was 2.93 years and 4.11% respectively.

	September 30, 2019

	(in US$'000)
Lease payments:
Not later than 1 year	3,714
Between 1 to 2 years	1,550
Between 2 to 3 years	925
Between 3 to 4 years	789
Between 4 to 5 years	463

Total lease payments (note)	7,441
Less: Discount factor	(444	)

Total lease liabilities	6,997

Note: Excludes future lease payments on lease not commenced as at September 30, 2019 in the aggregate amount of US$1.1 million.

All of the equity investees are private companies and there are no quoted market prices available for their shares.

Summarized financial information for the significant equity investees HBYS, SHPL and NSPL is as follows:

	Commercial Platform								Innovation Platform

	Consumer Health HBYS				Prescription Drugs SHPL				Drug R&D NSPL
	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
	(in US$'000)
Current assets	104,536		116,020		130,462		124,512		16,754		17,320
Non-current assets	94,914		100,353		92,571		98,532		—		—
Current liabilities	(63,668	)	(73,974	)	(65,671	)	(84,357	)	(387	)	(1,117	)
Non-current liabilities	(16,659	)	(17,302	)	(6,389	)	(6,909	)	—		—

Net assets	119,123		125,097		150,973		131,778		16,367		16,203
Non-controlling interests	(2,529	)	(3,113	)	—		—		—		—

	116,594		121,984		150,973		131,778		16,367		16,203

	Commercial Platform								Innovation Platform

	Consumer Health HBYS				Prescription Drugs SHPL				Drug R&D NSPL^(note^(a))
	Nine Months Ended September 30,
	2019		2018		2019		2018		2019	2018
	(in US$'000)
Revenue	156,987		160,713		210,167		211,903		—	—



Gross profit	83,732		83,050		149,794		147,373		—	—



Impairment provision (note (b))	—		—		—		—		—	(30,000	)



Interest income	121		68		422		496		210	138



Finance cost	(13	)	(140	)	—		—		—	—



Profit/(loss) before taxation	15,512		16,390		55,698		52,958		165	(37,637	)
Income tax expense (note (c))	(2,416	)	(3,367	)	(8,726	)	(6,809	)	—	—

Net income/(loss)	13,096		13,023		46,972		46,149		165	(37,637	)
Non-controlling interests	472		366		—		—		—	—

Net income/(loss) attributable to the shareholders of equity investee	13,568		13,389		46,972		46,149		165	(37,637	)

(b): On November 19, 2018, NSPL's Board reviewed the progress of its drug candidates. After due consideration of the timeline and further investments required to complete NSPL's clinical trials and reach the commercialization stage, it decided to explore alternative strategic options to maximize the economic returns from the drug candidates. NSPL performed an annual impairment assessment of the recoverability of the related US$30,000,000 intangible asset by comparing its carrying amount to the higher of the asset's value-in-use or its fair value less costs to sell. In preparing its assessment, although NSPL was in the process of identifying potential buyers or collaboration partners to maximize its economic returns from the drug candidates, there was no certainty of an available market or that a suitable buyer or partner could be readily identified. Accordingly, NSPL recorded a full impairment provision for the nine months ended September 30, 2018 as the impairment conditions were determined to have existed as at September 30, 2018. The Company's attributable portion was US$15,000,000.
(c): The main entities within the HBYS and SHPL groups have been granted the High and New Technology Enterprise ("HNTE") status. Accordingly, the entities were eligible to use a preferential income tax rate of 15% for the nine months ended September 30, 2019 and 2018.

For the nine months ended September 30, 2019 and 2018, other immaterial equity investees had net income of approximately US$311,000 and US$200,000 respectively.

Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees is as follows:

	Commercial Platform								Innovation Platform^(note)

	Consumer Health HBYS				Prescription Drugs SHPL				Drug R&D NSPL
	2019		2018		2019		2018		2019		2018
	(in US$'000)
Opening net assets after non-controlling interests as at January 1	121,984		110,616		131,778		132,731		16,203		38,401
Impact of change in accounting policy (ASC 842)	(19	)	—		(2	)	—		—		—
Net income/(loss) attributable to the shareholders of equity investee	13,568		13,389		46,972		46,149		165		(37,637	)
Dividends declared	(14,615	)	—		(21,731	)	(31,538	)	—		—
Other comprehensive loss	(4,324	)	(5,502	)	(6,044	)	(5,898	)	(1	)	—
Investments	—		—		—		—		—		16,000

Closing net assets after non-controlling interests as at September 30	116,594		118,503		150,973		141,444		16,367		16,764



Group's share of net assets	58,297		59,252		75,487		70,722		8,184		8,382
Goodwill	—		—		2,821		2,924		—		—

Carrying amount of investments as at September 30	58,297		59,252		78,308		73,646		8,184		8,382

Note: The Innovation Platform includes other immaterial equity investees. As at September 30, 2019 and December 31, 2018, the aggregate carrying amount of investments in NSPL and other immaterial equity investees was approximately US$8,732,000 and US$8,514,000 respectively.

Substantially all accounts payable are denominated in RMB and US$ and due within one year from the end of the reporting period. The carrying values of accounts payable approximate their fair values due to their short-term maturities.

	September 30, 2019	December 31, 2018

	(in US$'000)
Accrued salaries and benefits	12,437	8,715
Accrued research and development expenses	42,422	28,883
Accrued selling and marketing expenses	4,121	4,675
Accrued administrative and other general expenses	8,526	6,181
Deferred government incentives	425	1,817
Deposits	1,269	1,230
Dividend payable to a non-controlling shareholder of a subsidiary (Note 17(iv))	—	1,282
Others	5,553	3,544

	74,753	56,327

The weighted average interest rate for outstanding bank borrowings for the nine months ended September 30, 2019 and the year ended December 31, 2018 was 3.29% per annum and 2.79% per annum respectively. The carrying amounts of the Group's bank borrowings were denominated in HK$. The Group

had fully repaid the bank borrowings in June 2019 and there were no outstanding bank borrowings as at September 30, 2019.

In November 2017, the Group through its subsidiary, entered into facility agreements with a bank for the provision of unsecured credit facilities in the aggregate amount of HK$400,000,000 (US$51,282,000). The credit facilities included (i) a HK$210,000,000 (US$26,923,000) 3-year term loan facility and (ii) a HK$190,000,000 (US$24,359,000) 18-month revolving loan facility. The term loan bore interest at the Hong Kong Interbank Offered Rate ("HIBOR") plus 1.50% per annum and an upfront fee of HK$1,575,000 (US$202,000). The revolving loan facility bore interest at HIBOR plus 1.25% per annum. The term loan was drawn in May 2018 and was fully repaid in June 2019. The revolving loan facility expired in May 2019.

In August 2018, the Group through its subsidiary, entered into two separate facility agreements with banks for the provision of unsecured credit facilities in the aggregate amount of HK$507,000,000 (US$65,000,000). The first credit facility is a HK$351,000,000 (US$45,000,000) revolving loan facility, with a term of 2 years and an annual interest rate of HIBOR plus 1.35% per annum. The second credit facility is a HK$156,000,000 (US$20,000,000) revolving loan facility, with a term of 2 years and an annual interest rate of HIBOR plus 1.35% per annum. These credit facilities are guaranteed by the Company. As at September 30, 2019 and December 31, 2018, no amount has been drawn from either of the revolving loan facilities.

In February 2017, the Group through its subsidiary, entered into two separate facility agreements with the banks for the provision of unsecured credit facilities in the aggregate amount of HK$546,000,000 (US$70,000,000). The first credit facility included (i) a HK$156,000,000 (US$20,000,000) term loan facility and (ii) a HK$195,000,000 (US$25,000,000) revolving loan facility, both with a term of 18 months and an annual interest rate of HIBOR plus 1.25% per annum. The second credit facility included (i) a HK$78,000,000 (US$10,000,000) term loan facility and (ii) a HK$117,000,000 (US$15,000,000) revolving loan facility, both with a term of 18 months and an annual interest rate of HIBOR plus 1.25% per annum. The term loans from the first and second credit facilities were repaid in May 2018. Both revolving loan facilities were terminated in August 2018.

(iii) 3-year revolving loan facility and 3-year term loan and revolving loan facilities

In November 2018, the Group through its subsidiary renewed a 3-year revolving loan facility with a bank in the aggregate amount of HK$234,000,000 (US$30,000,000) with an annual interest rate of HIBOR plus 0.85% per annum. This credit facility is guaranteed by the Company. As at September 30, 2019 and December 31, 2018, no amount has been drawn from the revolving loan facility.

In May 2019, the Group through its subsidiary, entered into a separate facility agreement with the bank for the provision of additional unsecured credit facilities in the aggregate amount of HK$400,000,000 (US$51,282,000). The 3-year credit facilities include (i) a HK$210,000,000 (US$26,923,000) term loan facility and (ii) a HK$190,000,000 (US$24,359,000) revolving loan facility, both with an annual interest rate of HIBOR plus 0.85% per annum, and an upfront fee of HK$819,000 (US$105,000) on the term loan. These credit facilities are guaranteed by the Company. As at September 30, 2019, no amount has been drawn from either of these credit facilities.

The Group's bank borrowings are repayable as from the dates indicated as follows:

As at September 30, 2019 and December 31, 2018, the Group had unutilized bank borrowing facilities of HK$1,141,000,000 (US$146,282,000) and HK$931,000,000 (US$119,359,000) respectively.

Pursuant to a resolution passed in the Annual General Meeting on April 24, 2019, the Company's authorized share capital was increased from US$75,000,000 to US$150,000,000 by the addition of 75,000,000 ordinary shares of US$1.00 each (equivalent to 750,000,000 ordinary shares of US$0.10 each after the share split effective on May 30, 2019) in the share capital of the Company.

Pursuant to a resolution passed in the Extraordinary General Meeting on May 29, 2019, with effect from May 30, 2019, each ordinary share of the Company was subdivided into 10 ordinary shares and the par value per ordinary share was changed from US$1.00 to US$0.10. All Company ordinary share and per share amounts presented were adjusted retroactively as the share split was effective when the interim unaudited condensed consolidated financial statements were issued.

As at September 30, 2019, the Company is authorized to issue 1,500,000,000 ordinary shares.

Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors of the Company.

The Company conditionally adopted a share option scheme on June 4, 2005 (as amended on March 21, 2007) and such scheme has a term of 10 years. It expired in 2016 and no further share options

can be granted. Another share option scheme was conditionally adopted on April 24, 2015 (the "HCML Share Option Scheme"). Pursuant to the HCML Share Option Scheme, the Board of Directors of the Company may, at its discretion, offer any employees and directors (including Executive and Non-executive Directors but excluding Independent Non-executive Directors) of the Company, holding companies of the Company and any of their subsidiaries or affiliates, and subsidiaries or affiliates of the Company share options to subscribe for shares of the Company.

As at September 30, 2019, the aggregate number of shares issuable under the HCML Share Option Scheme is 23,130,970 ordinary shares and the aggregate number of shares issuable under the prior share option scheme which expired in 2016 is 1,636,180 ordinary shares. Additionally, the number of shares authorized but unissued was 833,213,550 ordinary shares.

Share options granted are generally subject to a four-year vesting schedule, depending on the nature and the purpose of the grant. Share options subject to the four-year vesting schedule, in general, vest 25% upon the first anniversary of the vesting commencement date as defined in the grant letter, and 25% every subsequent year. However, certain share option grants may have a different vesting schedule as approved by the Board of Directors of the Company. No outstanding share options will be exercisable or subject to vesting after the expiry of a maximum of eight to ten years from the date of grant.

A summary of the Company's share option activity and related information is as follows:

	Number of share options		Weighted average exercise price in £ per share	Weighted average remaining contractual life (years)	Aggregate intrinsic value (in £'000)

Outstanding at January 1, 2018	11,264,120		1.77	6.29	43,158
Granted	10,606,260		4.69
Exercised	(2,107,080	)	1.40
Cancelled	(1,208,450	)	4.30

Outstanding at December 31, 2018	18,554,850		3.31	7.35	15,158



Granted	180,000		4.22
Exercised	(209,000	)	0.61
Cancelled	(932,110	)	4.64
Expired	(96,180	)	4.65

Outstanding at September 30, 2019	17,497,560		3.28	6.52	9,016



Vested and exercisable at December 31, 2018	8,032,040		1.68	4.84	14,843
Vested and exercisable at September 30, 2019	10,195,420		2.35	5.12	9,016

In estimating the fair value of share options granted, the following assumptions were used in the Polynomial model for awards granted in the periods indicated:

	Year Ended December 31,					Nine Months Ended September 30, 2019

	2011	2013	2016	2017	2018	Nine Months Ended September 30, 2019
Weighted average grant date fair value of share options (in £ per share)	0.18	0.32	0.90	1.27	1.67	1.51
Significant inputs into the valuation model (weighted average):
Exercise price (in £ per share)	0.44	0.61	1.97	3.11	4.69	4.22
Share price at effective date of grant (in £ per share)	0.43	0.61	1.97	3.11	4.66	4.22
Expected volatility (note (a))	46.6%	36.0%	39.0%	36.3%	37.6%	37.7%
Risk-free interest rate (note (b))	3.13%	3.16%	1.00%	1.17%	1.46%	1.08%
Contractual life of share options (in years)	10	10	8	10	10	10
Expected dividend yield (note (c))	0%	0%	0%	0%	0%	0%

The Company will issue new shares to satisfy share option exercises. The following table summarizes the Company's share option exercises:

The Group recognizes compensation expense on a graded vesting approach over the requisite service period. The following table presents share-based compensation expense included in the Group's condensed consolidated statements of operations:

As at September 30, 2019, the total unrecognized compensation cost was US$8,415,000, and will be recognized on a graded vesting approach over the weighted average remaining service period of 2.6 years.

The Company grants awards under the LTIP to participating directors and employees, giving them a conditional right to receive ordinary shares of the Company or the equivalent American depositary shares ("ADS") (collectively the "Awarded Shares") to be purchased by the Trustee up to a cash amount. Vesting will depend upon continued employment of the award holder with the Group and will otherwise be at the discretion of the Board of Directors of the Company. Additionally, some awards are subject to change based on annual performance targets prior to their determination date.

Performance targets vary by award, and may include targets for shareholder returns, free cash flows, revenues, net profit after taxes and the achievement of clinical and regulatory milestones. As the extent of achievement of the performance targets is uncertain prior to the determination date, a probability based on management's assessment on the achievement of the performance target has been assigned to calculate the amount to be recognized as an expense over the requisite period with a corresponding entry to liability.

Upon the determination date, the Company will pay a determined monetary amount, up to the maximum cash amount based on the actual achievement of the performance target specified in the award, to the Trustee to purchase the Awarded Shares. Any cumulative compensation expense previously recognized as a liability will be transferred to additional paid-in capital, as an equity-settled award. If the performance target is not achieved, no Awarded Shares of the Company will be purchased and the amount previously recorded in the liability will be reversed through share-based compensation expense.

Grant date	Maximum cash amount per annum (in US$ millions)	Covered financial years		Performance target determination date

October 19, 2015	1.8	2014-2016		note (a	)
March 24, 2016	0.3	note (b	)	note (b	)
March 15, 2017	0.4	note (c	)	note (c	)
March 15, 2017 and August 2, 2017	6.0	2017-2019		note (d	)
December 15, 2017	0.5	2018-2019		note (d	)
August 6, 2018	0.1	2018-2019		note (d	)
December 14, 2018	1.5	2019		note (d	)
August 5, 2019	0.7	2019		note (d	)

Notes:
(a): The annual performance target determination date is the date of the announcement of the Group's annual results for the covered financial year and vesting occurs one business day after the publication date of the annual report of the Company for the financial year falling two years after the covered financial year to which the LTIP award relates.
(b): This award does not stipulate performance targets and is subject to a vesting schedule of 25% on each of the first, second, third and fourth anniversaries of the date of grant.
(c): This award did not stipulate performance targets and vested one business day after the publication date of the annual report for the 2017 financial year.
(d): The annual performance target determination date is the date of the announcement of the Group's annual results for the covered financial year and vesting occurs two business days after the announcement of the Group's annual results for the financial year falling two years after the covered financial year to which the LTIP award relates.

The Trustee has been set up solely for the purpose of purchasing and holding the Awarded Shares during the vesting period on behalf of the Group using funds provided by the Group. On the determination date, if any, the Company will determine the cash amount, based on the actual achievement of each annual performance target, for the Trustee to purchase the Awarded Shares. The Awarded Shares will then be held by the Trustee until they are vested.

The Trustee's assets include treasury shares and funds for additional treasury shares, trustee fees and expenses. The number of treasury shares (in the form of ordinary shares or ADS of the Company) purchased and held by the Trustee were as follows:

For the nine months ended September 30, 2019 and 2018, US$262,000 and US$396,000 of the LTIP awards were forfeited respectively.

The following table presents the share-based compensation expenses recognized under the LTIP awards:

For the nine months ended September 30, 2019 and 2018, US$526,000 and US$1,770,000 were reclassified from liability to additional paid-in capital respectively upon LTIP awards reaching the determination date. As at September 30, 2019 and December 31, 2018, US$1,477,000 and US$1,235,000 were recorded as liabilities respectively for LTIP awards prior to the determination date.

As at September 30, 2019, the total unrecognized compensation cost was approximately US$3,147,000, which considers expected performance targets and the amount expected to vest, and will be recognized over the requisite periods.

	Nine Months Ended September 30, 2019

	Innovation Platform	Commercial Platform	Total
	(in US$'000)
Goods—Manufacturing	—	4,753	4,753
Goods—Distribution	—	130,806	130,806
Services	10,841	2,584	13,425
Royalties	—	2,562	2,562

	10,841	140,705	151,546



Third parties	10,468	135,371	145,839
Related parties (Note 17(i))	373	5,334	5,707

	10,841	140,705	151,546

	Nine Months Ended September 30, 2018

	Innovation Platform	Commercial Platform	Total
	(in US$'000)
Goods—Distribution	—	119,866	119,866
Services	20,754	8,246	29,000
Licenses	12,135	—	12,135

	32,889	128,112	161,001



Third parties	25,581	122,869	148,450
Related parties (Note 17(i))	7,308	5,243	12,551

	32,889	128,112	161,001

17. Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries

The Group has the following significant transactions with related parties and non-controlling shareholders of subsidiaries, which were carried out in the normal course of business at terms determined and agreed by the relevant parties.

	Nine Months Ended September 30,

	2019	2018
	(in US$'000)
Sales to:
Indirect subsidiaries of CK Hutchison	5,334	5,243



Revenue from research and development services from:
Equity investees	373	7,308



Purchases from:
Equity investees	1,792	1,812



Rendering of marketing services from:
Indirect subsidiaries of CK Hutchison	324	377
An equity investee	2,682	9,652

	3,006	10,029



Rendering of support services from:
An indirect subsidiary of CK Hutchison	698	682

	September 30, 2019	December 31, 2018

	(in US$'000)
Accounts receivable—related parties
Indirect subsidiaries of CK Hutchison (note (a))	1,227	2,709
An equity investee (note (a))	127	73

	1,354	2,782



Accounts payable
An equity investee (note (a))	1,495	6,507



Amounts due from related parties
An indirect subsidiary of CK Hutchison (notes (a) and (b))	3,294	—
Equity investees (note (a))	898	889

	4,192	889



Amounts due to related parties
An indirect subsidiary of CK Hutchison (note (c))	—	432



Other deferred income
An equity investee (note (d))	1,147	1,356

(iv) Balances with non-controlling shareholders of subsidiaries included in:

(b): Taxation in the PRC has been provided for at the applicable rate on the estimated assessable profits less estimated available tax losses, if any, in each entity. Under the PRC Enterprise Income Tax Law (the "EIT Law"), the standard enterprise income tax rate is 25%. In addition, the EIT Law provides for, among others, a preferential tax rate of 15% for companies which qualify as HNTE. Hutchison MediPharma Limited and its wholly-owned subsidiary Hutchison MediPharma (Suzhou) Limited qualify as a HNTE up to December 31, 2019 and 2020 respectively.

Pursuant to the EIT law, a 10% withholding tax is levied on dividends paid by PRC companies to their foreign investors. A lower withholding tax rate of 5% is applicable under the China-HK Tax Arrangement if direct foreign investors with at least 25% equity interest in the PRC companies are Hong Kong tax residents, and meet the conditions or requirements pursuant to the relevant PRC tax regulations regarding beneficial ownership. Since the equity holders of the major subsidiaries and equity investees of the Company are Hong Kong incorporated companies and Hong Kong tax residents, and meet the aforesaid conditions or requirements, the Company has used 5% to provide for deferred tax liabilities on retained earnings which are anticipated to be distributed. As at September 30, 2019 and December 31, 2018, the amounts accrued in deferred tax liabilities relating to withholding tax on dividends were determined on the basis that 100% of the distributable reserves of the major subsidiaries and equity investees operating in the PRC will be distributed as dividends.
(c): The Company's subsidiary in the U.S. with operations in New York State is subject to U.S. federal and state taxes, and have been provided for at approximately 21% and 9% on the estimated assessable profit respectively. Certain income receivable by the Company is subject to U.S. withholding tax of 30%.

The reconciliation of the Group's reported income tax expense to the theoretical tax amount that would arise using the tax rates of the Company against the Group's loss before income taxes and equity in earnings of equity investees is as follows:

	Nine Months Ended September 30,

	2019		2018
	(in US$'000)
Loss before income taxes and equity in earnings of equity investees	(102,640	)	(63,593	)



Tax calculated at the statutory tax rate of the Company	(16,936	)	(10,493	)
Tax effects of:
Different tax rates available in different jurisdictions	1,331		451
Tax valuation allowance	18,928		14,881
Preferential tax rate difference	(123	)	(21	)
Preferential tax deduction	(3,686	)	(4,119	)
Expenses not deductible for tax purposes	1,963		1,294
Utilization of previously unrecognized tax losses	(32	)	(3	)
Withholding tax on undistributed earnings of PRC entities	1,533		1,546
Others	(419	)	(541	)

Income tax expense	2,559		2,995

Basic losses per share is calculated by dividing the net loss attributable to the Company by the weighted average number of outstanding ordinary shares in issue during the period. Treasury shares held by the Trustee are excluded from the weighted average number of outstanding ordinary shares in issue for purposes of calculating basic losses per share.

Diluted losses per share is calculated by dividing net loss attributable to the Company by the weighted average number of outstanding ordinary shares in issue and dilutive ordinary share equivalents outstanding during the period. Dilutive ordinary share equivalents include shares issuable upon the exercise or settlement of share option and LTIP awards issued by the Company using the treasury stock method.

For the nine months ended September 30, 2019 and 2018, the share options and LTIP awards issued by the Company were not included in the calculation of diluted losses per share because of their anti-dilutive effect. Therefore, diluted losses per share was equal to basic losses per share for the nine months ended September 30, 2019 and 2018.

The Group determines its operating segments from both business and geographic perspectives as follows:

Innovation Platform and Prescription Drugs businesses under the Commercial Platform are primarily located in the PRC. The locations for Consumer Health business under the Commercial Platform are further segregated into the PRC and Hong Kong.

The performance of the reportable segments is assessed based on operating (loss)/profit.

For the nine months ended September 30, 2019, the Group began including the results of a prescription pharmaceutical developed from the Innovation Platform into the Prescription Drugs business under the Commercial Platform.

	Nine Months Ended September 30, 2019

	Innovation Platform		Commercial Platform
	Drug R&D		Prescription Drugs	Consumer Health
	PRC		PRC	PRC		Hong Kong	Subtotal	Unallocated		Total
	(in US$'000)
Revenue from external customers	10,841		114,919	9,276		16,510	140,705	—		151,546

Interest income	287		47	20		16	83	3,812		4,182
Equity in earnings of equity investees, net of tax	238		23,486	6,784		—	30,270	—		30,508
Operating (loss)/profit	(96,979	)	31,344	6,876		1,080	39,300	(13,682	)	(71,361	)
Interest expense	—		—	—		—	—	771		771
Income tax expense	169		666	(92	)	154	728	1,662		2,559
Net (loss)/income attributable to the Company	(96,907	)	29,801	6,211		439	36,451	(16,006	)	(76,462	)
Depreciation/amortization	3,313		118	16		67	201	120		3,634
Additions to non-current assets (other than financial instruments and deferred tax assets)	6,563		2,624	14		3	2,641	156		9,360

	As at September 30, 2019

	Innovation Platform	Commercial Platform
	Drug R&D	Prescription Drugs	Consumer Health
	PRC	PRC	PRC	Hong Kong	Subtotal	Unallocated	Total
	(in US$'000)
Total assets	122,831	130,597	63,272	11,561	205,430	125,831	454,092
Property, plant and equipment	17,128	312	67	322	701	699	18,528
Right-of-use assets	2,922	2,191	24	407	2622	1,022	6,566
Leasehold land	1,108	—	—	—	—	—	1,108
Goodwill	—	2,681	407	—	3,088	—	3,088
Other intangible asset	—	288	—	—	288	—	288
Investments in equity investees	8,732	78,308	58,297	—	136,605	—	145,337

	Nine Months Ended September 30, 2018

	Innovation Platform		Commercial Platform
	Drug R&D		Prescription Drugs	Consumer Health
	PRC		PRC	PRC	Hong Kong	Subtotal	Unallocated		Total
	(in US$'000)
Revenue from external customers	32,889		99,007	9,236	19,869	128,112	—		161,001

Interest income	35		43	11	56	110	4,275		4,420
Equity in earnings of equity investees, net of tax	(18,719	)	23,074	6,695	—	29,769	—		11,050
Operating (loss)/profit	(80,372	)	27,255	7,134	1,814	36,203	(7,646	)	(51,815	)
Interest expense	—		—	—	60	60	668		728
Income tax expense	40		848	104	283	1,235	1,720		2,995
Net (loss)/income attributable to the Company	(80,212	)	24,774	6,367	717	31,858	(9,915	)	(58,269	)
Depreciation/amortization	2,409		100	17	16	133	20		2,562
Additions to non-current assets (other than financial instruments and deferred tax assets)	3,860		13	7	438	458	746		5,064

	As at December 31, 2018

	Innovation Platform	Commercial Platform
	Drug R&D	Prescription Drugs	Consumer Health
	PRC	PRC	PRC	Hong Kong	Subtotal	Unallocated	Total
	(in US$'000)
Total assets	100,388	118,445	67,352	11,686	197,483	234,247	532,118
Property, plant and equipment	15,223	204	71	418	693	700	16,616
Leasehold land	1,174	—	—	—	—	—	1,174
Goodwill	—	2,779	407	—	3,186	—	3,186
Other intangible asset	—	347	—	—	347	—	347
Investments in equity investees	8,514	68,812	60,992	—	129,804	—	138,318

Revenue from external customers is after elimination of inter-segment sales. Sales between segments are carried out at mutually agreed terms.

There was one customer which accounted for over 10% of the Group's revenue for the nine months ended September 30, 2019 and 2018 respectively.

Unallocated expenses mainly represent corporate expenses which include corporate employee benefit expenses and the relevant share-based compensation expenses. Unallocated assets mainly comprise cash and cash equivalents and short-term investments.

Reconciliation of net loss for the period to net cash used in operating activities:

	Nine Months Ended September 30,

	2019		2018
	(in US$'000)
Net loss	(74,691	)	(55,538	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	3,634		2,562
Share-based compensation expense—share options	5,412		5,129
Share-based compensation expense—LTIP	2,008		2,152
Equity in earnings of equity investees, net of tax	(30,508	)	(11,050	)
Dividends received from equity investees	18,173		23,526
Changes in right-of-use assets	(874	)	—
Other adjustments	2,173		1,726
Changes in working capital
Accounts receivable—third parties	(159	)	(195	)
Inventories	(3,763	)	(1,493	)
Accounts payable	(2,596	)	(3,454	)
Other payables, accruals and advance receipts	19,128		14,576
Lease liabilities	693		—
Other changes in working capital	(2,156	)	3,148

Total changes in working capital	11,147		12,582

Net cash used in operating activities	(63,526	)	(18,911	)

From time to time, the Group may become involved in litigation relating to claims arising from the ordinary course of business. The Group believes that there are currently no claims or actions pending against the Group, the ultimate disposition of which could have a material adverse effect on the Group's results of operations, financial position or cash flows. However, litigation is subject to inherent uncertainties and the Group's view of these matters may change in the future. When an unfavorable outcome occurs, there exists the possibility of a material adverse impact on the Group's financial position and results of operations for the periods in which the unfavorable outcome occurs, and potentially in future periods.

On May 17, 2019, Luye Pharma Hong Kong Ltd. issued a notice to the Group purporting to terminate a distribution agreement that granted the Group exclusive commercial rights to Seroquel in the PRC for failure to meet a pre-specified target. The Group disagrees with this assertion and believes that they have no basis for termination, and therefore intends to enforce its rights under the current agreement. On July 29, 2019, the Group initiated arbitration in Hong Kong and the arbitration is still in progress. Accordingly, no adjustment has been made to Seroquel-related balances as at September 30, 2019, including accounts receivable, long-term prepayment, accounts payable and other payables of US$1.1 million, US$1.1 million, US$0.9 million and US$1.1 million respectively.

The Group evaluated subsequent events through January 21, 2020, which is the date when the interim unaudited condensed consolidated financial statements were issued.

In October 2019, the Group granted 1,735,000 share options with an exercise price of £2.98 per ordinary share.

In October 2019, the Group granted awards under the LTIP up to a maximum cash amount of US$96,000 that do not stipulate performance targets. Shares under such LTIP awards are subject to the vesting schedule of 25% on each of the first, second, third and fourth anniversaries of the date of grant.

In October 2019, the 3-year term loan facility of HK$210,000,000 (US$26,923,000) was drawn down and is due in May 2022.

In December 2019, the Group granted 400,000 share options with an exercise price of £3.59 per ordinary share and granted awards under the LTIP up to a maximum cash amount of US$6.6 million subject to performance targets.

In December 2019, the Group acquired the remaining 50% shareholding in NSPL for consideration of approximately US$8.1 million. Afterwards, the effective equity interest of the Group in NSPL changed to 99.75%.

		(in US$'000)

Offices		4,877
Factories		383
Others		487

		5,747

	Number of treasury shares		Cost (in US$'000)

As at January 1, 2018	559,775		1,957
Purchased	795,005		5,451
Vested	(233,750	)	(731	)

As at December 31, 2018	1,121,030		6,677
Purchased	60,430		346
Vested	(240,150	)	(944	)

As at September 30, 2019	941,310		6,079

	Nine Months Ended September 30,

	2019	2018
	(in US$'000)
Research and development expenses	872	1,082
Selling and administrative expenses	1,136	1,070

	2,008	2,152



Recorded with a corresponding credit to:
Liability	768	982
Additional paid-in capital	1,240	1,170

	2,008	2,152

	Nine Months Ended September 30,

	2019	2018
	(in US$'000)
Clinical trial related costs	62,370	57,952
Personnel compensation and related costs	33,570	26,832
Other research and development expenses	4,795	3,948

	100,735	88,732

		December 31, 2018

		(in US$'000)
Not later than 1 year		3,026
Between 1 to 2 years		2,735
Between 2 to 3 years		1,056
Between 3 to 4 years		882
Between 4 to 5 years		810
Later than 5 years		326

Total minimum lease payments		8,835

	September 30, 2019	December 31, 2018

	(in US$'000)
Bank deposits maturing over three months (note)
Denominated in:
US$	104,111	214,538
HK$	382	377

	104,493	214,915

	September 30, 2019		December 31, 2018

	(in US$'000)
Accounts receivable, gross	40,375		40,217
Allowance for doubtful accounts	(43	)	(41	)

Accounts receivable, net	40,332		40,176

	2019		2018

	(in US$'000)
As at January 1	41		258
Increase in allowance for doubtful accounts	36		161
Decrease in allowance due to subsequent collection	(33	)	(225	)
Write-off	—		(1	)
Exchange difference	(1	)	(14	)

As at September 30	43		179

	September 30, 2019	December 31, 2018

	(in US$'000)
Raw materials	1,765	652
Finished goods	13,888	11,657

	15,653	12,309

		September 30, 2019

		(in US$'000)
Right-of-use assets
Offices (note (a))		5,938
Factories		177
Others (note (b))		451

Total right-of-use assets		6,566



Lease liabilities—current		3,497
Lease liabilities—non-current		3,500

Total lease liabilities		6,997

	September 30, 2019	December 31, 2018

	(in US$'000)
Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS")	58,297	60,992
Shanghai Hutchison Pharmaceuticals Limited ("SHPL")	78,308	68,812
Nutrition Science Partners Limited ("NSPL")	8,184	8,102
Other	548	412

	145,337	138,318

		September 30, 2019

		(in US$'000)
Property, plant and equipment
Contracted but not provided for		1,868

	September 30, 2019	December 31, 2018

	(in US$'000)
Accounts payable—third parties	17,618	14,158
Accounts payable—non-controlling shareholders of subsidiaries (Note 17(iv))	3,916	4,960
Accounts payable—related party (Note 17(ii))	1,495	6,507

	23,029	25,625

	2019	2018

As at January 1	666,577	664,470
Share option exercises	209	886

As at September 30	666,786	665,356

	September 30, 2019	December 31, 2018

	(in US$'000)
Accounts receivable—third parties	4,758	5,070



Accounts payable	3,916	4,960



Other payables, accruals and advance receipts
Dividend payable	—	1,282



Other non-current liabilities
Loan	579	579

	Nine Months Ended September 30,

	2019		2018
Weighted average number of outstanding ordinary shares in issue	665,612,400		664,003,277



Net loss attributable to the Company (US$'000)	(76,462	)	(58,269	)

Losses per share attributable to the Company (US$ per share)	(0.11	)	(0.09	)