?For Immediate Release? 15 March 2017
Yestar Healthcare Holdings Company Limited
(Stock code: 2393.HK)
Announces 2016 Annual Results
Gross profit margin Increased by 48.1% to RMB766 Million
Profit for the Year Surged by 36.0% yoy to RMB270 Million
|RMB'000 || || || |
|For the year ended 31 December ||2016 ||2015 ||Change |
|Revenue ||3,021,831 ||2,454,684 ||+23.1% |
|Gross profit ||766,333 ||517,408 ||+48.1% |
|EBITDA ||539,211 ||363,985 ||+48.1% |
|Profit for the year ||269,928 ||198,513 ||+36.0% |
|Profit attributable to owners of the parent ||201,031 ||162,756 ||+23.5% |
|Adjusted net profit* ||238,905 ||183,885 ||+29.9% |
|Earnings per share (RMB cents) ||9.2 ||8.1 ||+13.6% |
|Gross profit margin ||25.4% ||21.1% ||+4.3 p.p. |
|EBITDA margin ||17.8% ||14.8% ||+3.0p.p. |
|Profit margin for the year ||8.9% ||8.1% ||+0.8 p.p. |
|Net profit margin attributable to owners of the parent ||6.7% ||6.6% ||+0.1p.p. |
|Adjusted net profit margin* ||7.9% ||7.5% ||+0.4p.p. |
| || || || |
|Final dividend (HK cents) ||4.4 ||3.9 ||+12.8% |
| || || || |
*Adjusted net profit = excluding intangible asset amortization
(Hong Kong - 15 March 2017) Yestar Healthcare Holdings Company Limited ("Yestar" or the "Company" together with its subsidiaries, the "Group", stock code: 2393.HK) is pleased to announce the annual results for year ended 31 December 2016 (the "Year").
Benefitted from the full-year financial contribution from Shanghai Emphasis Investment Management Consulting Co., Ltd, Shanghai Jianchu Medical Investment Co., Ltd, Shanghai Chaolian Trading Co., Ltd, Shanghai Haole Industrial Co., Ltd. and Shanghai Dingpei Industrial Co., Ltd, collectively name as Shanghai Emphasis Group Companies ("Shanghai Anbaida") in 2015 with the fulfillment of its profit guarantee for the Year, together with the steady revenue contribution from the medical imaging business, the Group has recorded a 23.1% year-on-year ("yoy") growth in revenue, reaching RMB3,021.8 million for the Year (2015: RMB2,454.7 million). The overall gross profit of the Group increased from RMB517.4 million in 2015 to RMB766.3 million in the Year, representing a growth of 48.1% yoy. Gross profit margin also surged from 21.1% in 2015 to 25.4%, which was mainly driven by the gross profit margin enhancement of Shanghai Anbaida and Yestar Biotech (Jiangsu) Company Limited ("Yestar Biotech (Jiangsu)") (formerly known as Jiangsu Uno Technology Development Company Limited). Profit attributable to the owners of the parents rose by 23.5% to RMB201.0 million as compared to RMB162.8 million in 2015. Earnings per share was RMB9.2 cents (2015: RMB8.1 cents). The Board of Directors recommends a final dividend of HK4.4 cents per share for the Year.
Strengthening Partnership with Roche and Expanding into the Southern China Market
Through strategic merger and acquisitions in 2014, Yestar has endeavored to build a comprehensive medical distribution and servicing platform. During the year, the Group proposed to acquired 70% of equity interest in each of three In Vitro Diagnostic ("IVD") distribution companies in the PRC, with a total consideration of approximately RMB931.0 million. These three companies are some of the largest distributors of Roche Diagnostic ("Roche") in the PRC, namely Guangzhou Hongen Medical Diagnostic Technologies Company Limited ("Hongen"), Shenzhen De Run Li Jia Company Limited. ("Derunlijia") and Guangzhou Shengshiyuan Trading Company Limited ("Shengshiyuan") respectively. Together with the preivous acquicisions of Yestar Biotech (Jiangsu) and Shanghai Anbaida in 2014 and 2015 respectively, the Group has then become one of the largest distributors of Roche in the PRC market.
The integration of Hongen and Derunlijia was completed in January 2017 while Shengshiyuan was completed in February 2017. An audited net profit of not less than RMB122.8 million, RMB160.15 million and RMB210.32 million are guaranteed by the vendors of the above three companies for the years ending 31 December 2017, 2018 and 2019, respectively. After the acquisitions, the Group has further enlarged its medical consumable distribution network to some of the most affluent regions in the PRC, including Fujian, Guangdong, Hunan and Hainan provinces. As a result, the Group currently has a total sales channels of 284 distributors and 1,042 hospitals and clinics.
A Stronger Position for Future Development
On 8 September 2016, the Group successfully entered into purchase agreements with Merrill Lynch International, Credit Suisse (Hong Kong) Limited, Deutsche Bank AG, Singapore Branch and Haitong International Securities Company Limited in connection with the issue of US$200 million senior notes due in 2021 ("Senior Notes"), bearing an interest rate of 6.9% per annum. Gaining such supports from international finance institutions, the Group is well-positioned for greater development in the future.
Medical Consumable Business - Accounting for 76.7% of overall revenue
During the year, medical consumable business accounted for 76.7% of the Group's overall revenue of the year. The segment's revenue surged by 39.7% to RMB2,317.4 million (2015: RMB1,659 million), resulting from the expansion of sales network which drove up sales volume. Besides, the Group has achieved economies of scale which reduced the average purchase price of the IVD products via the sharing of purchasing and logistics. As a result, the overall gross profit margin of the segment improved to 27.6%, representing a 4.3 p.p. growth (2015: 23.3%).
Other Business - Accounting for 23.3% of overall revenue
Apart from the medical business segment, the Group also engaged in manufacturing, marketing, distribution and sale of Fujifilm color photographic paper and the industrial imaging products in the PRC. During the Year, the Group has performed steadily in the segment with a revenue of RMB704.5 million (2015: RMB795.7 million). Gross profit margin reached 17.95%. As the market is mature and stable, the segment will remain as a cash cow to the Group and will continue collaborating with Fujifilm to maintain a normal income stream.
The PRC's IVD industry has experienced dramatic growth in the past few years and believed to continue its strong growth momentum. The increase of demand for quality healthcare is the topmost driving force to fuel consumption growth of the IVD market. With the growing aging population, rising of the middle class, as well as the health reform for the universal healthcare services in rural area, it is expected that the PRC's IVD industry will reach RMB263.97 billion by 2019 and even surge to RMB417.38 billion by 2024, according to a market research done by Asia Market Info and Dev Co.
Facing the promising industry prospect, Mr. James Hartono, the Chairman of Yestar Healthcare, stated, "Over the past few years, Yestar has successfully transformed itself into a medical player in the PRC's lucrative healthcare market. We are now advancing from a product-based company to a platform-based company. Through integrating an extensive sales network, bilateral communication channels and marketing resources into a value-added distribution and servicing platform, we are facilitating international medical brands to penetrate the PRC market. To better reflect our business focus and market postion, the Board proposed to change the English name of the Company from "Yestar International Holdings Company Limited" to "Yestar Healthcare Holdings Company Limited" and changed the dual foreign name in Chinese of the Company from" ????????"to "??????????". The change became effective on 24 January 2017."
Mr. Hartono continued, "Looking into 2017, we will continue to focus on channel expansion, product diversification and value creation in order to enrich our platform. We will work closely with Roche to further consolidate the PRC's IVD distribution market. At the same time, we will seek for further collabraotion opportunities with Fujifilm in relation to medical imaging, diagnostic imaging and other high-margin medical devices and consumables production. Our effective platform will facilitate the introduction of new products and services from Roche and Fujifilm to the PRC market and further solidify our relationship with our main business partners. Through the adoption of platform-based strategy, we are confident that Yestar can achieve fruitful results for shareholders in the coming years.
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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.
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