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EQS-News / 16/03/2018 / 11:14 UTC+8
*?For Immediate Release? 16 March 2018 *
*Yestar Healthcare Holdings Company Limited
(Stock code: 2393.HK)*
*Announces 2017 Annual Results*
*Revenue Increased by 30.0% to RMB3,927 Million
Profit for the Year Surged by 29.9% yoy to RMB351 Million*
(Hong Kong - 16 March 2018) *Yestar Healthcare Holdings Company Limited
*("Yestar" or the "Company" together with its subsidiaries, the "Group",
stock code: 2393.HK) was pleased to announce its annual results for year
ended 31 December 2017 (the "Year") on 15 March 2018 .
During the Period, the Group has once again recorded another set of
outstanding results. Benefiting from the consolidated financial results of
the acquired subsidiaries for the last few years as well as the increasing
average demand of IVD products, the Group achieved an overall revenue of
approximately RMB3,926.9 million for the Year, representing approximately
30.0% year-on-year ("yoy") increase when comparing with the corresponding
period of last year (2016: approximately RMB3,021.8 million). Due to the
increase in bargaining power in procurement, gross profit also surged by
approximately 44.3% yoy to approximately RMB1,105.8 million (2016:
approximately RMB766.3 million), with gross profit margin rising by
approximately 2.8 p.p. to approximately 28.2% (2016: approximately 25.4%),
As a result of the outstanding performance of our IVD business and the
consolidation of financial information of the previous acquired companies,
despite the amortization expenses arising from acquisitions and interest
expenses from the issuance of Senior Notes, profit attributable to the
owners of the parents rose by 24.3% to RMB250.0 million as compared to
RMB201.0 million in 2016. Earnings per share was RMB11.5 cents (2016: RMB9.2
cents). The Board of Directors recommends a final dividend of HK5.5 cents
per share for the Year, with a dividend payout ratio at approximately 40.0%
*Horizontal Expansion into the Northern China Market through the Acquisition
of Beijing
Kaihongda*
During the Year, the Group has maintained its network expansion through
merger and acquisitions ("M&A"). On 20 September 2017, the Group announced
the acquisition of 70% equity interest of Beijing Kaihongda Technology
Company Limited ("Beijing Kaihongda"), a primary distributor of Rosche
Diagnostics Products with well-established sales network in Beijing
Municipality and the Hebei Province in the PRC, at a cash consideration of
RMB105.0 million. Pursuant to the sale and purchase agreement, an
accumulated profit guarantee from Beijing Kaihongda for the three calendar
years from 2017 to 2019 for a total of RMB54.6 million net profit after tax
was made. The acquisition has been completed in October 2017, and the
guaranteed net profit of RMB15.0 million to the Group's financial results
for the Year was also acheived. Upon the completion of the acquisition,
Yestar is now equipped with an IVD distribution network covering all the top
first-tier cities (Beijing, Shanghai, Guangzhou and Shenzhen) in China,
where citizens have a doubled average disposable income than the national
average, and the Group was able to leverage on such sales network to further
drive sales of IVD products and medical film products to local hospitals,
while solidifying the Group's position as one of the leading and largest
distributors for Roche Diagnostic Products.
*Vertical Expansion into the Downstream Independent Clinical Laboratory
Market through
Investment in Shanghai Zhongkerunda*
According to industry experts' analysis report, the China Independent
Clinical Laboratory ("ICL") market is forecasted to maintain a 22% CARG
growth from Year 2015, reaching RMB74 billion by Year 2025. In order to
capture this enormous growing opportunity, in May 2017, Shanghai Emphasis
Investment Management Consulting Co., Ltd. ("Emphasis Investment"), a wholly
owned subsidiary of the Company jointed hands with Shanghai Runda Medical
Technology Co., Ltd. and Chinese Academy of Sciences to establish a medical
and clinical laboratory, Shanghai ZhongkeRunda Medical Laboratory Testing
Co., Ltd. (the "Laboratory"), in Shanghai, the PRC. The Laboratory principal
engages in the operation of a complex comprising an integrated medical
laboratory, a quality control management centre and an information
technology service centre. Such investment in ICL marks a significant
milestone in the Group venture into the growing market, and with Yestar
holding a 39% interest in the Laboratory, the Group will be entitled to a
share profit of associates in the future.
*Medical Consumable Business - Accounting for 84.4% of overall revenue*
Contributed by the previous acquisitions and the increasing in average
demand of IVD products, the medical consumable business recorded a strong
revenue growth of approximately 43.7% yoy to approximately RMB3,329.6
million (2016: approximately RMB2,317.4 million). Segment gross profit
margin also rose by 2.6p.p. to approximately 30.2% (2016: approximately
27.6%). The surge was mainly due to the Group has achieved economies of
scale, the increased bargaining power in procurement, and reduce in logistic
cost brought by the Group's enlarged distribution and servicing network.
*Other Business - Accounting for 15.2% of overall revenue*
During the Year, revenue of other businesses of the Group recorded a
decrease of approximately 15.2% yoy to approximately RMB597.3 million (2016:
approximately RMB704.5 million). Segment gross profit margin also remained
stable at approximately 17.0% for the Year (2016: approximately 18.0%). In
the long run, medical segment is still the key focus of the Group. However,
as the market of color photographic paper and industrial imaging products
remain stable, which brings in positive and stable cash inflow to the Group,
the Group will continue with the existing business operation and strengthen
its relationship with Fujifilm.
*Prospects*
With the flourishing demand of IVD products in the China market, the Group
remains upbeat with its future development. The National Bureau of
Statistics of China announced that the population of civilians with age over
60 has reached approximately 241 million, accounting for 17.3% of the
overall population in 2017. The growing aging population would triggers more
frequent medical check-up on cancer screening and chronic disease. The
Ministry of Human Resources and Social Security also announced that the
coverage of basic medical insurance in 2017 has increased by 58.2% to 1,177
million people when comparing with 2016. The average basic medical insurance
for urban and rural residents of 2017 also increased by RMB30 yoy to RMB450
per person. Besides, according to the research conducted by Research and
Markets, the annual consumption per capita of the PRC's in-vitro diagnostic
products was USD4.6 in 2017, which has enjoyed a cumulative increase of
206.7% as compared to the expenditure in 2013. In view of above-mentioned
facts, the Group is optimistic that the industry has a vast potential to
grow.
*Mr. James Hartono, the Chairman of Yestar Healthcare* , stated, "The
demographic trend and favoruable government policy will stimulate the demand
for IVD products and bring a positive outlook of Yestar's furture business
growth. In view of the PRC's IVD industry has experienced dramatic growth in
the past few years and believed to continue its strong growth momentum, the
Group will continue to solidify its IVD distribution platform through
channel expansion and look for vertical upstream expansion opportunities.
The Group is exploring IVD research and production targets that are
complementary to Roche's product and service portfolio and continuing to
focus on product diversification and value creation in order to enrich our
platform. Meanwhile, the Group further diversified into the downstream ICL
market. With Roche Diagnostic as the solid backup, Yestar is able to build
stronger relations with hospitals by providing a wider range of services."
*Mr. Hartono* continued, "Looking forward to 2018, Yestar will continue to
solidify its IVD distribution platform through channel expansion, in which
the Group will actively seek for M&A opportunities to expand into new
regions such as Northeast and Central China. The Group will also look for
further opportunities to diversity its position along the IVD industry value
chain. At the same time, leverage on the solid and long-term partnership
with Roche, the Group is confident that Yestar can extend its dominance in
the IVD market, while bringing better services and values to the civilians
and creating greater, long-term value to its shareholders. "
_- End -_
*About Yestar Healthcare Holdings Company Limited*
Yestar Healthcare Holdings Company Limited (formerly known as Yestar
International Holdings Company Limited) is the largest distributor of
Fujifilm products in the PRC and have been transformed itself into a high
margin medical consumables manufacturer and distributor in the PRC since
2014. Targeting the booming domestic healthcare industry, the core business
of the Group focuses on high margin and fast-moving healthcare consumables
namely, IVD products and medical imaging products.
This press release is issued by DLK Advisory Limited on behalf of *Yestar
Healthcare Holdings Company Limited*.
For enquiries, please contact:
*DLK Advisory *
Tel: +852 2857 7101
Fax: +852 2857 7103
Document: http://n.eqs.com/c/fncls.ssp?u=GFPHBBRVMW [1]
Document title: [Yestar Healthcare 2393.HK] Yestar Healthcare Announces 2017
Annual Results: Revenue Increased by 30.0% and Profit for the Year Surged by
29.9% yoy
16/03/2018 Dissemination of a Financial Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
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