Revenue from Core Businesses Maintained Steady Growth
Profit Attributable to Shareholders up 11.2%
New Hospital in Beijing Opens by end of FY12 / 13 as Catalyst for Future Growth
HONG KONG, Nov. 27, 2012 /PRNewswire/ --
| 6 months ended | ||||||
| HK$ | Sep 30 2012 | Sep 30 2011 | H-o-H | |||
| Turnover | ||||||
| Hospital Management Service Income | 71,173,000 | 62,747,000 | +13.4% | |||
| Medical Insurance Administration Service Income | 497,000 | 379,000 | +31.1% | |||
| Medical Devices Sales | 83,432,000 | 81,900,000 | +1.9% | |||
| Medical Accessories Sales | 57,217,000 | 49,994,000 | +14.4% | |||
| Chinese Herbal Medicine Sales | 12,145,000 | 15,862,000 | -23.4% | |||
| 224,464,000 | 210,882,000 | +6.4% | ||||
| Share of Profit from Associates | ||||||
| China Cord Blood Corporation ("CCBC," CO:US) | 30,120,000 | 29,728,000 | +1.3% | |||
| China National Medical Equipment Industry Corp. (CMIC) | 1,608,000 | 2,272,000 | -29.2% | |||
| Fortress Group Limited (Formerly FunTalk China) | 24,435,000 | 40,094,000 | -39.1% | |||
| Profit After Tax | 96,903,000 | 84,425,000 | +14.8% | |||
| Profit Attributable to Shareholders | 85,255,000 | 76,645,000 | +11.2% | |||
| Adjusted Profit Attributable to Shareholders* | 30,363,000 | 83,518,000 | -63.6% | |||
| Earnings Per Share (Basic) | 4.23 HK cents | 3.93 HK cents | +7.6% | |||
| Adjusted Earnings Per Share (Basic)# | 1.51 HK cents | 4.28 HK cents | -64.7% | |||
| * | Excluding non-cash and non-operating gain of HK$54,892,000 (6 months ended 30 September 2011: non-cash and non-operating loss of HK$41,526,000) due to fair value changes of financial assets and financial liabilities; and excluding gain on partial disposal of an associate of HK$34,653,000 recorded in the 6 months ended 30 September 2011 |
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| # | Based on Adjusted Profit Attributable to Shareholders | |||||
Golden Meditech Holdings Limited ("Golden Meditech," together with its subsidiaries collectively as the "Group," - 801.HK; 910801.TW), a leading integrated healthcare enterprise in China, is pleased to announce the Group's interim results for the six months ended 30 September 2012.
During the interim period, the Group reported financial results that were in line with management expectations and barely affected by the current global environment. Total revenue for the interim period increased by 6.4% to HK$224,464,000. Profit attributable to shareholders of the period increased by 11.2% to HK$85,255,000. Excluding non-cash gain of HK$54,892,000 due to fair value changes of financial assets and financial liabilities, adjusted profit attributable to shareholders of the period, which included contributions from associates, dropped by 63.6% to HK$30,363,000.
Mr. Kam Yuen, Chairman and Chief Executive Officer of the Group, said, "Golden Meditech's solid healthcare businesses have weathered the complicated market conditions, and allowed the Company to take advantage of the opportunities that have arisen. The medical devices segment continued to be favoured by the Chinese policies on blood transfusion, while healthcare services segment recorded a steady performance despite the Beijing haematology hospital operations being temporarily suspended until the 600-bed new hospital to be operational by the end of this fiscal year. With living standard and aging population continue to grow, public awareness of quality healthcare is increasing, and the Chinese government has exerted greater support to the development of healthcare industry, which provides a favourable platform for Golden Meditech to drive the business forward."
HEALTHCARE SERVICES SEGMENT
For the interim period, revenue from the healthcare services segment remained steady at HK$71,670,000. Revenue generated from the hospital management business and medical insurance administration business were HK$71,173,000 and HK$497,000 respectively.
The flat revenue growth from the hospital management business during the period was due to the strategic relocation of hospital facilities in Beijing to a much more spacious site which is scheduled to be opened by the end of the year. As a result, the Beijing hospital is temporarily closed, which has slowed down the overall hospital management business this year.
In tandem with the Group's long-term strategies in hospital management business, it entered into an agreement to increase ownership in its non-wholly-owned hospital management subsidiary, GM Hospital Group Limited, through acquiring the US$28,000,000 Convertible Notes from New Horizon Capital III, L.P. ("New Horizon") in August 2012. New Horizon in return received 279,344,444 new shares from Golden Meditech at the issue price of HK$0.9 per share.
China Cord Blood Corporation ("CCBC"), an associate company of the Group continued to post strong half-year results with 31.1% growth in revenue and 33.5% increase in operating profit to US$14,550,000. However, its net profit was affected by non-cash accounting treatment for derivatives associated with financial instruments of the convertible notes issued to KKR investment fund in April 2012. As the results, CCBC's contribution to the Group only increased slightly by 1.3% to HK$30,120,000.
With strong confidence in the prospects of CCBC and its market leadership, Golden Meditech invested US$50,000,000 into CCBC in September 2012 through the subscription of 7% Convertible Notes due 2017. The new investment will allow CCBC to speed up its development and seize the upcoming opportunities in China and any other untapped markets.
Meanwhile, the Company's medical insurance administration business, GM-Medicare has achieved satisfactory progress during the reporting period and continued to serve as the missing link between multiple stakeholders in the medical insurance market in China.
MEDICAL DEVICES SEGMENT
Revenue from the Group's medical devices segment amounted to HK$140,649,000, representing 6.6% increase relative to the previous corresponding period, accounting for 62.7% of the Group's total revenue.
With the Chinese government initiatives dedicated to elevate the quality and standard of healthcare industry, a number of favourable policies, such as the "Level III General Hospital Accreditation and Administration Standards" by the Ministry of Health which demands hospital managers to promote the clinical application of autologous blood recovery system (the "ABRS") to alleviate surgical blood shortages where implemented and one of the Company's key products, the ABRS, is set to rise in the coming years.
Golden Meditech believes the separate listing of medical devices division at a right stock exchange under the appropriate market conditions is beneficial to the Group and its shareholders in the long run. Therefore, the Group has decided to enter into agreements with shareholders of China Bright Group Co. Limited ("China Bright") to purchase back the shares, and to extend the listing of China Bright for another 18 months until February 2014. As of today, the Group has increased its stake in China Bright to 95.10%.
In addition, leveraging on its seasoned experience in selling blood related medical devices, the division is exploring to develop the distribution of imported medical devices in China to expand the revenue sources. In August 2012, Golden Meditech signed a product purchase and distribution agreement with ThermoGenesis Corp. (NASDAQ: KOOL) for the AXP® AutoXpress® System ("AXP System"), an automated device used for the processing of stem cells from cord blood.
STRATEGIC INVESTMENTS
The performance of Fortress Group Limited ("Fortress") underlying FunTalk China Holdings Limited ("FunTalk") business was down by 13.8% during the period, compared with same period last year. In addition, Fortress needed to account for non-cash expenses associated with derivatives on certain financial instruments. As a result, the Company's share of profits from Fortress was down by 39.1% to HK$24,435,000 compared with the previous reporting period.
The Chinese herbal medicine business reported a loss of HK$16,531,000 during the period, and was below management expectations.
With overall strategy to be focused on the enhancement of core healthcare businesses, the Company intends to consider disposals of non-strategic divisions at appropriate time and any proceeds raised will be allocated among existing businesses, and its shareholders.
OUTLOOK AND STRATEGIES
Looking ahead, Mr. Kam commented, "The Group continues to have high hopes for the healthcare industry in China. The vast and growing Chinese market presents great demand for premium medical devices and healthcare services. Golden Meditech is well positioned to seize the opportunities in the prospective healthcare industry with its dedication and foresights to establish the Company into a leading integrated healthcare enterprise in China." Mr. Kam continued, "In the coming months, Golden Meditech will focus on the completion of the new hospital in Beijing as part of its long term strategies for the healthcare services segment. The new hospital has larger floor areas, more beds and specializes in various departments to address patients' different needs, not solely haematology patients as before. The Group believes that the new hospital will soon contribute higher revenue to the Group and reveal the embedded values of Golden Meditech to the market. In addition, the Group's medical devices segment will continue to benefit from the favourable medical policies on blood transfusion. Leveraging on its existing solid network and ability to penetrate into lower-tiered hospitals, the medical device segment will be promising in the long run."
About Golden Meditech Holdings Limited
Golden Meditech Holdings Limited (www.goldenmeditech.com) is China's leading integrated-healthcare enterprise. Golden Meditech is a first-mover in China, having established dominant positions in medical devices and healthcare services markets, thanks to its strengths in innovation and market expertise and the ability to capture emerging market opportunities. Going forward, the Group will continue to pursue a leading position in China's healthcare industry both through organic growth and strategic expansion.
For inquiries, please contact:
Golden Meditech Holdings Limited
Investor Relations Department
Tel: (852) 3605 8180
Fax: (852) 3605 8181
Email: ir@goldenmeditech.com
