Healthcare Services Business Achieves Organic Growth and Diversification
Newly Start-up Cells and Tissues Storage and Genetic Testing Services Completes Our Entry into the Biomedical Industry
HONG KONG, June 27, 2018 /PRNewswire/ — Golden Meditech Holdings Limited (SEHK stock code: 00801) ("Golden Meditech" or the "Company", together with its subsidiaries, the "Group"), a leading integrated healthcare enterprise in China, announces today its annual results for the year ended 31 March 2018 (the "Year" or "FY2017/2018").

For the Year Ended 31 March

2018 (HK$’000)
2017 (HK$’000)
Change (%)

Continuing Operations Revenue
  250,719
  230,666
  8.7

Healthcare services segment revenue
113,548
65,149
74.3

   Hospital services income
107,118
60,456
77.2

   Medical insurance administration services income 
5,486
4,693
16.9

   Cells and tissues storage and genetic testing services income
944

N/M

Medical devices segment revenue
131,897
160,663
(17.9)

Strategic investments revenue
5,274
4,854
8.7

Gross profit
109,928
97,887
12.3

Loss before interest, taxes, depreciation and amortisation
(140,443)
(204,527)
(31.3)

Finance costs
(377,055)
(572,119)
(34.1)

Impairment loss on goodwill

(294,995)
N/M

Reversal of impairment loss on investment in Fortress Group Limited

734,525
N/M

Profit from discontinued operation
4,108,092
291,399
1,309.8

Profit/(loss) for the year
3,363,086
(171,194)
N/M

Basic earnings/(loss) per share (in HK cents)
114.9
(5.0)
N/M

Thanks to its revenue growth in the healthcare services segment during the Year, the Group’s total revenue from continuing operations bounced back from its recent decline to reach HK$250,719,000, an increase of 8.7% year-on-year. Revenue from the healthcare services segment and the medical devices segment accounted for 45.3% and 52.6% (FY2016/2017: 28.2% and 69.7%) of the Group’s total revenue from continuing operations, respectively. In particular, healthcare services revenue as a percentage of total revenue from continuing operations showed a notably increase. This was mainly attributable to a significant year-on-year increase of 77.2% in revenue from hospital business. By accelerating and diversifying our healthcare services segment, the management believes that they will drive the Group’s future growth. Loss before interest, taxes, depreciation and amortisation from continuing operations was HK$140,443,000, a decrease of 31.3% year-on-year.
As a result of completing the disposal (the "Disposal") of 65.4% equity interest in Global Cord Blood Corporation ("GCBC", formerly known as China Cord Blood Corporation), the Company’s profit for the year reached HK$3,363,086,000 (FY2016/2017: loss of HK$171,194,000); basic earnings per share was 114.9 HK cents (FY2016/2017: loss of 5.0 HK cents).
Mr. Kam Yuen, Chairman and Chief Executive Officer of the Group, said, "With the successful completion of the Disposal, the Company declared and paid a special cash dividend of HK$0.30 per share, totalling approximately HK$875 million, in appreciation of our shareholders’ continuous support. The Group is actively seeking investment opportunities in the healthcare industry, and the board of directors does not rule out possibility of declaring further special dividends if there are no suitable investment opportunities in the future."
Mr. Kam Yuen continued, "The Chinese healthcare industry maintains a steady growth and looks vibrant with various healthcare innovations. At the same time, the people’s demand for health care will create a broader market prospect for the healthcare sector. We will make good use of the balance of the Disposal proceeds to drive organic growth as well as growth through acquisitions, so as to achieve diversified and sustainable business development."
The Group has also conducted a series of acquisitions to propel future development, including:
1) Proposed to acquire 16.14% interest in Nanjing Ying Peng Hui Kang Medical Industry Investment Partnership (Limited Partnership)*. The total cash consideration is RMB1,060,000,000 (equivalent to approximately HK$1,303,800,000 as at the agreement date) with a 9% annual return rate (in any event, the total consideration shall not be more than approximately RMB1,127,172,000 (equivalent to approximately HK$1,386,422,000 as at the agreement date)). The Company will convene an extraordinary general meeting for shareholders to approve the transaction.
2) Acquired 50% equity interests in a Japanese real estate asset management company at a cash consideration of JPY425,000,000 (equivalent to approximately HK$29,219,000 as at the agreement date).
3) Acquired more than 50% equity interests in Life Corporation Limited ("LFC") in Singapore through the debt capitalisation. LFC is engaged in the construction of an automated columbarium and the related services in Singapore.
Mr. Kam Yuen concluded, "Leveraging on our first-mover advantage in the healthcare sector, the Group not only fully integrated its hospital, cells and tissues storage, genetic testing and other related businesses in the fast growing biomedical value chain, but also established closer cooperative relationships with overseas healthcare partners, with a view to enabling the public access to precision medicine."
Continuing Operations
Healthcare Services Segment
During the Year, healthcare services revenue increased significantly by 74.3% year-on-year to HK$113,548,000, accounting for 45.3% of total revenue from continuing operations. Revenue generated from hospital business, medical insurance administration business, cells and tissues storage and genetic testing businesses were HK$107,118,000, HK$5,486,000 and HK$944,000, accounting for 94.3%, 4.8% and 0.9% of the healthcare services revenue, respectively.
Hospital Business. All three hospitals contributed revenue to the Group. Among which, Beijing Qinghe Hospital performed particularly well and became a key source of revenue for the hospital business. Shanghai East International Medical Center has a well-established operational model and is expected to deliver improved operational performance. Beijing Sunbow Obstetrics & Gynecology Hospital has world-class obstetrics and gynecology facilities and is positioned to be a key hospital for high-end obstetrics and gynecology services in Beijing area.
Medical Insurance Administration Business. The Group is able to provide tailor-made third-party administrator services by building upon its self-developed intelligent software platform. Such services include claims, review process, bill settlement and data analysis that are custom-made to customers’ needs. These services enable the medical insurance companies to minimise their operational costs as well as enhance efficiency. The Group is well positioned to become a leading player in the medical insurance administration sector by tapping into our extensive network of medical institutions, overseas cooperation platforms and professional experience in information technology and services.
Cells and Tissues Storage Business and Genetic Testing Services Business. The Group commenced the provision of cells and tissues storage services as well as their clinical applications, high-end clinical molecular genetic testing and molecular pathology testing services. These businesses not only will play a pivotal role in the research and development on cancer treatment, using its biological samples, but also will improve the Group’s profitability in the future.
Medical Devices Segment
Medical devices revenue decreased by 17.9% year-on-year to HK$131,897,000, accounting for 52.6% of the Group’s total revenue from continuing operations. The decrease was mainly attributable to the intensified market competition, leading to the decline in sales volume. The Group adjusted its marketing campaigns in a timely manner to promote our products and at the same time actively exploring new project opportunities.
Strategic Investments
Precision Medicine Business. Golden Meditech Javadi Precision Medicine Limited ("GM Javadi") is jointly established by the Group, Dr. Nader Javadi, a pioneer in precision medicine in the United States of America ("U.S."), and an independent strategic investor. GM Javadi owns a renowned day clinic in the U.S. that focuses on the combined treatment of chemotherapy, immunotherapy and targeted therapy for various cancers, enhancing patients’ living quality and extended their survival rate.
Cell Therapy Business. The Group partnered with the University of Texas at MD Anderson Cancer Center and an independent strategic investor to set up Cellenkos Inc. ("Cellenkos"). Cellenkos aims to develop cord blood derived T-regulatory cellular therapies in treating autoimmune diseases as well as expand the therapies into key Asian markets. Cellenkos’ lead product, CK0801, delivers clinically meaningful doses of cord blood derived regulatory T-cells to overcome immune dysfunction. Presently, U.S. Food and Drug Administration ("FDA") has cleared the investigational new drug ("IND") application which allows Cellenkos to proceed with clinical trials of CK0801 to assess its activity, pharmacokinetics and safety in patients with a variety of autoimmune diseases and inflammatory disorders. Additionally, Cellenkos successfully registered its stand-alone manufacturing facility as good manufacturing practice ("GMP") compliant with FDA.
Both GM Javadi and Cellenkos are the Group’s prospective layout in the precision medicine field. Such foresight would create first-mover advantage in the research and development of cancer immunotherapy, benefiting the Group in the long run.
Cord Blood Storage Business – Discontinued Operation
During the ten months ended 31 January 2018, revenue from the discontinued operation amounted to HK$916,800,000, an annualised increase of 25.6% year-on-year. Excluding the net gain on the Disposal, profit from discontinued operation was HK$318,411,000, an annualised increase of 31.1% year-on-year. The increase was largely attributable to the expanded subscribers base. During the Year, the Group completed the Disposal and recorded net gain on disposal of HK$3,789,681,000.  

Discontinued Operation
Ten Months from 1 April 2017 to 31 January2018 (HK$’000)
  FY2016/2017 (HK$’000)

Revenue
916,800
876,201

Gross profit
773,497
732,034

Other income
24,585
26,974

Selling, marketing and administrative expenses
(417,998)
(418,277)

Impairment loss on available-for-sale securities

(2,943)

Profit from operations
380,084
337,788

Finance costs

(1,704)

Profit before tax
380,084
336,084

Income tax expense
(61,673)
(44,685)

Profit after tax
318,411
291,399

Gain on disposal of GCBC
4,501,901

Income tax expense in relation to the disposal of GCBC
(712,220)

Net gain on disposal of GCBC
3,789,681

Profit for the period/year from discontinued operation
4,108,092
291,399

Outlook
Looking ahead, Mr. Kam commented, "As a leading integrated healthcare enterprise in China, we will continue to grow existing healthcare services business and plan to make further investments in cells and tissues storage, genetic testing services and biotechnology research and development. Meanwhile, the Group will continue to explore new investment opportunities at home and abroad with high return potential, creating further value to the Group and our shareholders."
* The English name is for identification purpose only.
About Golden Meditech Holdings Limited (SEHK stock code: 00801)
Golden Meditech (www.goldenmeditech.com) is a leading integrated-healthcare enterprise in China. It is a first-mover in China, having established its dominant positions in several markets including the medical devices market and the hospital market in the healthcare industry, thanks to its strengths in innovation and market expertise and the ability to capture emerging market opportunities. Going forward, Golden Meditech will continue to pursue a leading position in China’s healthcare industry both through organic growth and strategic expansion.
SEGMENT RESULTS
Information regarding the Group’s reportable segments for the years ended 31 March 2018 and 2017 is set out below:

(HK$’000 )
Continuing Operations
Discontinued Operation
      Total

      Medical Devices
      Hospital Business
  Medical InsuranceAdministration
    Chinese HerbalMedicines
Cells and Tissues Storage and Genetic Testing Services
    Cord Blood Storage

2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017

Revenue from External Customers
94,089
124,183
107,118
60,456
5,486
4,693
5,274
4,854
944

916,800
876,201
1,129,711
1,070,387

Inter-segment Revenue
37,808
36,480










37,808
36,480

Reportable SegmentRevenue
131,897
160,663
107,118
60,456
5,486
4,693
5,274
4,854
944

916,800
876,201
1,167,519
1,106,867

Reportable Segment Profit/(Loss)
10,390
34,956
(147,835)
(441,865)
(25,670)
(31,834)
(27,186)
(23,345)
(10,582)

380,084
340,731
179,201
(121,357)

Reportable Segment Profit/(Loss) is Arrived at After Charging/(Crediting):

Depreciation and Amortisation Charges
8,660
7,838
69,681
69,577
7,538
9,425
19,929
19,108
1,411



107,219
105,948

(Reversal)/Increase of Impairment Loss on Trade Receivables 

(86)
21
(356)

791




30,346
34,095
30,367
34,444

Impairment Loss on Goodwill



294,995









294,995

 
Source: prnasia

  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
trusted cooling companion top banner
webAD-YeapSurgery728x90.jpg
webAD-KHNGSurgery728x90.jpg
webAD-HealthTrendsBlackberry728x90.jpg