Golden Meditech Announces 2012 / 2013 Annual Results
Published: Jun 28, 2013
HONG KONG, June 28, 2013 /PRNewswire/ --
For the year ended
31 March 2013
31 March 2012
+ / -
Cord Blood Bank Service Income
Hospital Management Service Income
Medical Insurance Administration Service Income
Medical Devices Sales
Medical Accessories Sales
Chinese Herbal Medicine Sales
Share of Profits from Associate
Fortress Group Limited (Formerly FunTalk China)
Profit After Tax
Profit Attributable to Shareholders
Adjusted Profit Attributable to Shareholders of the Company *
Earnings Per Share (Basic)
HK 6.3 cents
HK 7.7 cents
Adjusted Earnings Per Share (Basic) #
HK 6.8 cents
HK 9.9 cents
Excluding loss of HK$18,952,000 (year ended 31 March 2012 : gain of HK$84,523,000) due to the fair value changes of financial assets and liabilities; and excluding the gain on disposal of interest in associates of HK$8,527,000 (year ended 31 March 2012 : HK$41,436,000)
Based on Adjusted Profit Attributable to Shareholders of the Company
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 annual results for the year ended 31 March 2013 ("Fiscal Year").
During the reporting period, we have early adopted certain new Hong Kong Financial Reporting Standards ("HKFRS") for the preparation of financial statements. After assessing our investment in China Cord Blood Corporation ("CCBC") under the guidance of the HKFRS 10, and concluded that we have de facto control over CCBC and as a result, the financial statements of the Group have been restated retrospectively with CCBC fully consolidated in the Group's financial statement.
Total revenue for the fiscal year rose by 20.4% to HK$1,079,062,000 as each business segment of the Group continued to perform in line with management expectations. Revenue from the Group's healthcare services business accounted for 71.9% of total revenue while medical devices business accounted for 25.7%. Although the operational performance of the healthcare services segment was affected by the relocation of our haematology hospital in Beijing, rest of the operations maintained steady growth during the year. Profit attributable to shareholders of the Company totalled HK$135,660,000, while basic earnings per share reached HK6.3 cents. Excluding loss of HK$18,952,000 due to fair values changes of financial assets and financial liabilities, and gain on disposal of interests in associates of HK$8,527,000, our adjusted profit attributable to shareholders of the Company decreased by 25.5% to HK$146,085,000 as compared to the previous reporting period.
Mr. Kam Yuen, Chairman and Chief Executive Officer of the Group, said, "Despite the sluggish global economies, our seasoned experiences and strengths have enabled us to execute our long term business strategies efficiently and fortify our leading position in China's integrated healthcare industry. Golden Meditech has accomplished a number of significant achievements during the fiscal year. Our newly constructed Qinghe Hospital in Beijing's Haidian District has begun its trial run and is expected to be operational in the third quarter of 2013. Its commencement is expected to diversify our source of income, strengthen our cash flow and moderate our capital expenditure. Meanwhile, a new business to distribute imported medical devices has been established to allow our existing sales platforms and networks to be fully utilized for seizing potential market demand for premium medical devices in China."
The Board of Directors has recommended a final dividend of HK1.3 cent per share (2012: HK 1 cent) to acknowledge the continuous support and trust from our shareholders which enable us to stride forward persistently.
HEALTHCARE SERVICES SEGMENT
Revenue from the healthcare services segment increased to HK$776,316,000 during the reporting period. Revenue generated from the cord blood bank business, hospital management business and medical insurance administration business were HK$647,265,000, HK$126,930,000 and HK$2,121,000 respectively.
The expansion of Beijing hospital facilities temporarily affected our operation and slowed down the overall growth momentum of the hospital management business, however, the new hospital is believed to contribute a higher level of revenue once it has become operational in the third quarter of 2013. The Qinghe Hospital is specialised not only in haematology but also house departments of various medical disciplines such as IVF Centre. It has a gross floor area of approximately 75,000 m2 with more than 600 beds, which include 48 beds for the haematology wards.
In order to further fortify our existing competitive advantages in the hospital management business, we repurchased the convertible notes issued by our hospital management subsidiary 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.
Benefited by the Dragon Year Baby Boom and its success in penetrating the high-end market segment, CCBC has achieved a record of 72,228 new subscribers and its revenue increased by a remarkable 39.9% to HK$647,265,000 as compared to the previous fiscal year. However, as a result of the fair value changes of the convertible notes issued to Kohlberg Kravis Roberts investment fund in April 2012, which caused its profit for the year of CCBC to decline.
As a result of our strong confidence in the prospects of China's cord blood bank industry and CCBC's market leadership, we invested US$50 million in CCBC through the subscription of its convertible notes. Our shareholding in CCBC would increase to 53.3% assuming such convertible notes are fully converted into CCBC new shares. This investment is believed to enhance our share of contribution from CCBC.
In addition, GM-Medicare Management (China) Company Limited, which engages in the medical insurance administration business, has achieved satisfactory progress during the reporting period. Although this business remains in the development stage, it has been appreciated by the market in serving as the missing link between multiple stakeholders in the medical insurance market in China.
MEDICAL DEVICES SEGMENT
Revenue from the medical devices segment increased by 7.5% to HK$277,242,000 compared to last fiscal year, accounting for 25.7% of the Group's total revenue.
The Chinese government is committed to enhancing the standards of the healthcare system. The Ministry of Health has launched a series of measures to alleviate the shortage of surgical blood, such as the implementation of the "Level III General Hospital Accreditation and Administration Standards" to encourage the clinical adoption of Autologous Blood Recovery System ("ABRS"). With the new government in power and favourable policies in place, we believe the market demand for ABRS will continue to increase.
Because of the rising demand for prime medical devices, we believe the separate listing of the medical devices division at the right stock exchange market will be beneficial to the Group and our shareholders in the long run. The Group thereby repurchased shares of China Bright Group Co. Limited ("China Bright"), a non-wholly-owned medical devices subsidiary of Golden Meditech. As of today, the Group has increased its stake in China Bright to 95.1%.
Moreover, we leveraged on our seasoned experience in selling blood related medical devices to establish imported medical devices distribution business in China. In August 2012, we signed our first distribution agreement with ThermoGenesis Corp. (NASDAQ: KOOL) for the AXP® AutoXpress® System ("AXP System"), an automated device used for the process of extracting blood stem cells from cord blood. Under the five-year agreement, we have exclusive distribution rights for the AXP System in China (excluding Hong Kong and Taiwan), and certain other regions in Asia-Pacific region once relevant government approval has been obtained in each respective region. This newly developed distribution business will enable us to meet the growing demand for premium medical devices.
The Group currently holds two strategic investments, a 29.4% stake in Fortress Group Limited ("Fortress"), the special private vehicle which privatized the previously NASDAQ-listed FunTalk China Holdings Limited ("FunTalk") in August 2011 and 100% shareholding in Chinese herbal medicine business.
The performance of the underlying FunTalk business was up by 44.7% during the period, compared with the same period last year. However, Fortress needed to account for non-cash expenses associated with derivatives on certain financial instruments; our share of profit from Fortress was decreased by 11.4% to HK$83,714,000 compared with the previous reporting period.
The Chinese herbal medicine business consists of a GMP-approved production facility over a site area of 58,000 m2 located in a prime location in Municipal Shanghai. The business itself reported an operating loss of HK$28,407,000 during the year, and was below management expectations.
OUTLOOK AND STRATEGIES
Looking ahead, Mr. Kam commented, "We believe the demand for premium medical devices and healthcare services is growing with dedication from the Chinese government to enhance the healthcare system. The commencement of the Beijing Qinghe Hospital will provide fresh momentum for growth and its cash flow will enable us to capture new business opportunities as well as allow the market to appreciate the intrinsic values of Golden Meditech." Mr. Kam continued, "We are fully confident in the prospect of Golden Meditech. We will ride on the industry development trend, in alignment with our leading position in China's integrated healthcare industry, to create a competitive edge at our advantage. We will continue to accelerate the development of our medical devices and healthcare services businesses through leveraging on our strengths in innovation and seasoned experience in China's healthcare industry, with a view to maximize our shareholders' value."
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
(852) 3605 8180
(852) 3605 8181
SOURCE Golden Meditech Holdings Limited
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