Maintained Steady Financial Performance under COVID-19 Pandemic
Proceed with Hospital Group Business
The board (the “Board”) of directors (the “Directors”) of Genertec Universal Medical Group Company Limited (the “Company” or “Universal Medical”) is pleased to announce the interim results of the Company and its subsidiaries (together, the “Group”) for the 6 months ended 30 June 2020.
2020 INTERIM RESULTS HIGHLIGHTS
– The revenue amounted to approximately RMB4,024.2 million, representing an increase of 25.9% as compared with that of approximately RMB3,195.4 million for the corresponding period of 2019.
– The profit for the period amounted to approximately RMB861.0 million, representing a decrease of 1.3% as compared with that of approximately RMB872.5 million for the corresponding period of 2019.
– The profit for the period attributable to owners of the parent amounted to approximately RMB793.4 million, representing a decrease of 2.3% as compared with that of approximately RMB812.0 million for the corresponding period of 2019.
– The total assets amounted to approximately RMB59,199.2 million, representing an increase of 2.3% as compared with that of approximately RMB57,852.5 million as at 31 December 2019.
– The equity attributable to owners of the parent amounted to approximately RMB9,851.0 million, representing an increase of 3.8% as compared with that of approximately RMB9,489.3 million as at 31 December 2019.
– For the six months ended 30 June 2020, the return on equity was 16.41% and the return on total assets was 2.94%.
In the first half of 2020, Universal Medical was actively engaged in epidemic prevention and control of the new novel coronavirus (COVID-19) epidemic. A total of 23 member medical institutions were identified as designated hospitals for treatment and isolation, and all Grade II Class A and above hospitals have established fever clinics and participated in the joint prevention and control work of communities, stations, terminals, and airports. Additionally, the headquarters of the Group has implemented various medical supplies for the hospitals and strived to ensure the smooth development of the epidemic prevention and control work in the hospitals. Universal Medical orderly promoted the resumption of work and production and minimize the impact of the epidemic as much as possible, while adapting to the new normal of ongoing epidemic control. In the first half of 2020, the operating results of the Group were generally stable.
Maintained Steady Financial Performance and Proceed with Hospital Group Business
The Group recorded revenue of RMB4,024.2 million, representing an increase of 25.9% as compared to the corresponding period of the previous year, as a result of more medical institutions being consolidated into the Group’s financial statements in the second half of 2019 and the first half of 2020; recorded profit for the period of RMB861.0 million, representing a slight decrease of 1.3% as compared to the corresponding period of the previous year due to the impact of the epidemic; recorded profit for the period attributable to the owners of the parent of RMB793.4 million, representing a slight decrease of 2.3% as compared to the corresponding period of the previous year; and recorded total assets of RMB59,199.2 million as of 30 June 2020, representing an increase of 2.3% as compared to the end of 2019, with asset quality generally safe and controllable.
Hospital group is the most essential resources of building a medical and health conglomerate. In the first half of 2020, the Group continued to actively participate in the integration and takeover of medical institutions of SOEs, and build up a tightly-knit medical networks surrounding key regions and cities across China. As of 30 June 2020, the Group had entered into contracts in relation to takeover of 48 medical institutions (including 5 Grade III Class A hospitals and 24 Grade II hospitals) with actual capacity of over 15,000 beds. Meanwhile, the Group continued to improve the post-investment management of our medical institutions, and comprehensively improved the medical technology, management efficiency and service capabilities of our medical institutions by focusing on discipline construction, operation management, organization management innovation, service system construction, hospital digitalization, supply chain management, hospital renovation and expansion, so as to ensure their sound and orderly development.
Affected by the epidemic control in the first half of 2020, the number of outpatient visits of the medical institutions decreased by approximately 15% as compared to the corresponding period of the previous year, the number of inpatient visits decreased by approximately 18% as compared to the corresponding period of the previous year, and the number of medical examination services decreased by approximately 25% as compared to the corresponding period of the previous year, resulting in varying degrees of decline in the income of medical institutions of the Group and their profit contribution to the Group. The Group believes that the impact of the epidemic on the business of member medical institutions is temporary. With the epidemic under control in the second quarter, the number of patient visits of the medical institutions of the Group has rebounded significantly. Since May 2020, the overall monthly income has basically recovered to the same level for the corresponding period of the previous year, and the monthly income of most medical institutions in June 2020 has exceeded the level of the corresponding period of the previous year.
Steady Develop Finance and Advisory Business with Safe and Controllable Asset Quality
The Group’s finance business, which is the cornerstone underpinning the Group’s steady development and mainly provides finance lease services for county level public hospitals, and provides financial support for the Company, was affected by the epidemic control policies. The development of the Group’s finance and advisory business and collection of receivables from hospital customers relatively slowed down. Meanwhile, due to the continued and steady downward adjustment of the national monetary policies after the Loan Prime Rate (LPR) reform, the interest rate of the Group’s new leasing business decreased accordingly. Therefore, the average yield dropped as compared to the corresponding period of the previous year, and the operating performance of the finance and advisory business experienced short term fluctuations. During the reporting period, the finance and advisory business of the Group recorded revenue of RMB2,480.5 million, increased by 0.4% as compared to the corresponding period of the previous year; recorded gross profit of RMB1,521.5 million, decreased by 1.7% as compared to the corresponding period of the previous year. Finance lease business recorded revenue of RMB2,049.7 million, increased by 8.3% as compared to the corresponding period of the previous year; recorded gross profit of RMB1,090.7 million, increased by 10.9% as compared to the corresponding period of the previous year; the net interest spread was 3.55% and the net interest margin was 4.13%, still a high ranking among domestic competitors. As at 30 June 2020, the Group’s interest-bearing assets reached RMB50,869.6 million, representing an increase of 2.2% as compared with the beginning of the year; non-performing assets ratio was 0.98% and the overdue ratio (30 days) was 0.92%. The Group strictly controlled the operating risks, and continuously enhanced internal management. Although the non-performing assets ratio and the overdue ratio (30 days) slightly increased due to the epidemic, the overall asset quality was safe and controllable and continued to maintain its leading position in the industry.
Layout the Health Industry Chain and Explore New Opportunities in the Health Industry
In the first half of 2020, the Group continued to promote model exploration, pilot projects and layout in various fields of the health industry chain based on our hospital group, and focused on the Internet medical business. As of 30 June 2020, 4 member medical institutions of the Group, namely XD Group Hospital, Genertec Universal Xi’an Aero-Engine Hospital, Xianyang Caihong Hospital and Yantai Port Hospital, were approved for conducting Internet hospital business. A total of 13 member medical institutions went online based on the Internet platform, with the offline to online conversion rate reaching 5.1% within 4 months, over 30% of online patients showing needs for offline medical services and the patient satisfaction rate reaching 99%. In addition, based on full evaluation of our existing advantages, market prospects and our talent strategies, the Group actively developed businesses of equipment sales and maintenance, and third-party inspection center through various cooperation modes, such as acquisition of majority interest, investment in minority interest and strategic alliance, to build a health industry ecosystem and realize win-win results enjoyed by all.
Prospect for the Future
In the future, the Group will continue to uphold the philosophy of whole industry chain and whole life cycle, which is centered on medical services and supported by financial services, to build a shared and win-win health industry ecosystem, strive for a trustworthy medical and health group, and contribute to construction of “Healthy China”.
About Genertec Universal Medical Group Company Limited
Genertec Universal Medical Group Company Limited (“Universal Medical”) is a listed subsidiary (Stock code: HK.02666) of China General Technology (Group) Holding Co., Ltd (“Genertec”), one of the backbone SOEs directly administrated by the central government. Universal Medical is a diversified healthcare company focused on China’s rapidly evolving healthcare industry. With reliance on modern management concepts, professional teams, high-quality medical resources, solid financial strength and inclusive corporate culture, Universal Medical upholds the philosophy of whole industry chain and whole life cycle, which is centered on medical services and supported by financial services, to build a shared and win-win health industry ecosystem, strive for a trustworthy medical and health group, and contribute to construction of “Healthy China”.
This press release is issued by Institutional Capital Advisory (Asia) Limited on behalf of Genertec Universal Medical Group Company Limited.
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Institutional Capital Advisory (Asia) Limited
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