Golden Meditech Announces FY2019/2020 Annual Results

Revenue Fluctuated during the Pandemic, The Group is Confident to Meet Future Challenges

Sustainable Growth in Beijing Sunbow O&G Hospital, Interim Achievements in Cell Therapy Clinical Trials

HONG KONG, June 30, 2020 /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 2020 (the "Year").

Revenue of the Group decreased slightly by 2.7% year-on-year to HK$307,141,000. This was because the impact of COVID-19 outbreak was only started in early 2020. Among them, revenue generated from the healthcare services segment decreased by 9.6% year-on-year to HK$151,600,000, accounting for 49.4% of the Group's revenue; while the medical devices segment recorded a revenue increase of 3.2% year-on-year to HK$147,168,000, accounting for 47.9% of the Group's revenue.

The adjusted loss attributable to equity shareholders of the Company was HK$315,904,000, down 14.5% year-on-year; the adjusted basic loss per share was 10.8 HK cents, down 15.0% year-on-year. The decrease was mainly attributable to the decrease in adjusted operating loss, finance costs and the withholding tax on PRC dividend.

Mr. Feng Wen, Chairman of the Group, said, "The COVID-19 pandemic has affected the Group to a certain context, nevertheless, we are confident to deal with the tough time ahead, and will try our best to minimise the impact of the pandemic on the Group's results in anticipation of the challenging market environment. With respect to healthcare services, we will continue to build the predominant disciplines of our hospitals, fully tapping into the market potential of the premium healthcare services. At the same time, we will fully utilise the long-term competitiveness underpinned by the Group's nationwide marketing network to expand the sales channels and sales volume of medical devices. The Group will also further integrate its resources and strengthen the synergetic effect among its various business segments, so as to enhance its revenue and profitability."

Healthcare Services Segment

During the Year, the fluctuations in the performance of the healthcare services segment were mainly caused by a number of factors, including the expansion work and relocation of Shanghai East International Medical Center, the modification work to the laboratory and the impact of the pandemic. Revenue from hospital businesses, medical insurance administration business and cells and tissues storage and genetic testing services businesses have decreased by 1.3%, 28.5% and 88.9% year-on-year to HK$145,043,000, HK$5,036,000 and HK$1,521,000, respectively, accounting for 95.7%, 3.3% and 1.0% of the healthcare services revenue. Being the key expansion of the Group, hospital businesses maintain a sustainable development, laying a solid foundation for the steady development of the healthcare services segment.

Hospital Businesses

Beijing Sunbow Obstetrics & Gynecology Hospital recorded revenue of HK$39,924,000, up 29.6% year-on-year. The increase was mainly attributable to the growing demand of expectant mothers for quality healthcare services, good reputation of the hospital and its innovative services. Beijing Qinghe Hospital's rental income reduced by 9.9% year-on-year to HK$60,424,000. Shanghai East International Medical Center has relocated to the new operating site after completing the expansion work in the second half of 2019, and recorded a year-on-year decrease of 9.1% in revenue to HK$44,695,000.

Medical Insurance Administration Business

Revenue from medical insurance administration business amounted to HK$5,036,000 during the Year. Counting on its self-developed smart platform and cloud data processing center, as well as comprehensive domestic and international background and experience in the healthcare sector, the Group will further expand large insurance company customers, so as to enhance its business performance.

Cells and Tissues Storage and Genetic Testing Services Businesses

As a result of laboratory modification work during the Year, revenue generated from cells and tissues storage and genetic testing businesses was down by 88.9% to HK$1,521,000.

Medical Devices Segment

The medical devices segment showed steady development. Among them, revenue from sales of medical devices and distribution of third parties medical device and consumables increased by 30.7% and 31.8% year-on-year to HK$2,727,000 and HK$52,043,000, respectively. The increase was mainly attributable to the increased sales volume as a result of the drop in prices of the Group's medical devices, and the increased selling prices of the third parties medical devices and consumables. Revenue from medical device consumables decreased by 8.5% year-on-year to HK$92,398,000 due mainly to the pandemic.

Strategic Investments and Developments

Chinese Herbal Medicines Business

The Chinese herbal medicines business recorded a revenue of HK$8,373,000 during the Year, up 56.4% year-on-year, primarily attributable to the improved sales volume in certain regions.

Cell Therapy Business

The Group has obtained a number of interim achievements in the research and development of cell therapies, providing a solid ground for the Group to penetrate into high-end healthcare market with a first-mover advantage in the big health industry.

In 2019, the Group collaborated with the Department of Biology of Hong Kong Baptist University to conduct in-depth research in the area of cell therapy, particularly treating neurodegenerative diseases with stem cells.

Additionally, the Group's associate company in the United States ("U.S."), Cellenkos, has initiated Phase I clinical trial of its lead product, CK0801, for treatment of bone marrow failure syndrome as well as Guillain-Barré syndrome. In June 2020, Cellenkos once again obtained the approval from the U.S. Food and Drug Administration to initiate Phase I clinical trial of CK0802 for treatment of COVID-19 associated acute respiratory distress syndrome.

Proposal for the Privatisation of Golden Meditech*

On 17 June 2020, Meditech Global Group Limited (the "Offeror") and Golden Meditech issued a joint announcement in connection with the proposed privatisation of Golden Meditech by way of a scheme of arrangement (the "Proposal"). The sole director of the Offeror is Mr. Kam Yuen, the Company's major shareholder.

An Independent Board Committee has been established to make a recommendation to the Disinterested Shareholders. A Scheme Document will be dispatched to the Shareholders as soon as practicable and in compliance with the requirements of the Takeovers Code and applicable laws and regulations.

Outlook

Looking ahead, Mr. Feng commented, "It is highly possible that China will continue to implement favourable policies and encourage the development of big health industry since the industrial restructuring is becoming the norm. The next ten years is set to be the golden decade of the big health industry, representing a huge opportunity to the Group. As a leading integrated healthcare enterprise in China, we will, as always, capture the opportunities brought by the upgrade and development of the healthcare industry, and we will actively participate in the fast-growing big health market, creating sustainable and favourable returns for the shareholders of the Company."

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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.

* Details of the Proposal have been published by the Company in accordance with the Hong Kong Listing Rules and posted on the Company's website as follows:
http://www.goldenmeditech.com/eng/ir/announcements.php?year=2020

SOURCE Golden Meditech Holdings Limited

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