Revenue Performance - The company's revenue for the first half of 2022 was RMB 280.1 million, a decrease of 2.0% year-on-year[12]. - Medical service revenue amounted to RMB 276.9 million, down 1.8% compared to the same period last year[12]. - The total revenue for the first half of 2022 was RMB 280.1 million, a decrease of 2.0% compared to RMB 285.8 million in the same period of 2021[25]. - Total revenue for the six months ended June 30, 2022, was RMB 280,104 thousand, a decrease of 2.6% compared to RMB 285,844 thousand for the same period in 2021[114]. - Total revenue for the six months ended June 30, 2022, was not explicitly stated but is implied to have decreased due to the reported losses and cash flow issues[127]. Pediatric Services - Pediatric service revenue increased by 4.3% year-on-year to RMB 230.6 million, accounting for 83.3% of total medical service revenue[16]. - Pediatric outpatient service revenue was RMB 143.4 million, an increase of 8.1%, while inpatient service revenue was RMB 69.5 million, a slight decrease of 0.4%[16]. - Pediatric services generated revenue of RMB 230.6 million, representing 82.3% of medical services revenue, an increase from 77.3% in the previous year[28]. - The contribution of pediatric specialty services to pediatric outpatient and inpatient revenue remained stable at 42.3%[12]. - The company continues to focus on pediatric and obstetric specialty services, as well as online medical services, indicating a strategic emphasis on expanding its service offerings[127]. Financial Losses - The company recorded a net loss of RMB 234.7 million for the six months ended June 30, 2022, primarily due to strict pandemic control measures and increased market competition[16]. - The loss for the six months ended June 30, 2022, was RMB 234.7 million, compared to a loss of RMB 49.1 million in the same period last year[47]. - The company reported a net loss of RMB 234,741 thousand for the six months ended June 30, 2022, compared to a net loss of RMB 49,141 thousand in the previous year[114]. - The company incurred a loss of RMB 605,240,000 for the six months ended June 30, 2022, compared to a loss of RMB 371,592,000 for the same period in 2021[120]. Expenses and Cost Management - The company's gross profit for the six months ended June 30, 2022, was RMB 66.6 million, a decrease of 11.4% year-on-year, with a gross margin dropping from 26.3% to 23.8%[35]. - Sales expenses increased by 17.3% year-on-year to RMB 32.5 million, primarily due to the expansion of the marketing team to recover revenue scale under ongoing pandemic control measures[36]. - Administrative expenses decreased by 7.1% to RMB 64.5 million, compared to RMB 69.4 million in the same period last year, due to enhanced operational management and cost-cutting measures[38]. - Research and development expenses were RMB 4.2 million, down from RMB 5.9 million in the previous year, mainly due to reduced R&D activities[39]. - The company aims to optimize its structure and talent management to strengthen cost control[22]. Asset and Liability Management - Total assets as of June 30, 2022, were RMB 1,016,893 thousand, down from RMB 1,270,896 thousand at the end of 2021, representing a decrease of 20%[112]. - Current liabilities increased to RMB 354,016 thousand from RMB 291,177 thousand, an increase of 21.5%[112]. - The company recorded a significant increase in financial asset impairment losses to RMB 115,352 thousand from RMB 1,035 thousand year-on-year[114]. - Trade receivables increased by 7.9% to RMB 42.5 million, driven by higher receivables from health insurance agencies[51]. - Inventory decreased by 11.4% to RMB 18.7 million from RMB 21.1 million as of December 31, 2021, due to increased stockpiling during peak medical service demand[50]. Shareholder Information - Major shareholders include JoeCare with a 30.8% stake and Victor Gains Limited with an 11.8% stake as of June 30, 2022[77]. - The company has a total of 150,817,051 shares held directly by Jason ZHOU, reflecting his ownership in the issued share capital[81]. - The company has 31,562,713 shares held by 博裕（上海）股權投資管理有限責任公司, representing approximately 6.4% of the company's equity[80]. - 中國人壽再保險有限責任公司 holds 31,444,000 shares, also accounting for about 6.4% of the company's equity[80]. - The employee share plan has resulted in the purchase of 2,073,500 shares, which are held in trust for selected participants[90]. Governance and Compliance - The company has adhered to all applicable corporate governance code provisions as of June 30, 2022, except for the separation of the roles of Chairman and CEO[97]. - The audit committee, consisting of two independent non-executive directors and one non-executive director, has reviewed the interim results for the six months ended June 30, 2022[101]. - The company confirms that there have been no significant changes in the information disclosed in the annual report compared to the current data as of June 30, 2022[102]. - The company has adopted a strict code of conduct for securities trading by directors and employees, with no violations reported as of June 30, 2022[98]. - The company has not disclosed any significant changes in director information since the last annual report[99]. Impairment and Credit Losses - The company recorded an impairment loss on non-current assets of RMB 82.8 million, including RMB 37.3 million for intangible assets and RMB 33.6 million for goodwill[40]. - Financial asset impairment losses amounted to RMB 115.4 million, primarily due to expected credit losses from receivables[43]. - The expected credit loss rate for trade receivables (third-party) is 0.86%, with a total book value of RMB 42,639 thousand and an expected credit loss of RMB 368 thousand[150]. - The expected credit loss rate for trade receivables from individual customers is 90.90%, with a total book value of RMB 2,120 thousand and an expected credit loss of RMB 1,927 thousand[150]. - The total expected credit loss across all categories amounts to RMB 234,055 thousand, with a net loss book value of RMB 129,474 thousand[150]. Future Plans and Strategies - The company aims to enhance its medical service model to meet the refined, professional, and personalized health development needs of new-generation families[11]. - The company plans to enhance customer management systems to improve customer experience and increase membership base[20]. - The company is strengthening market promotion and partnerships with insurance institutions to enhance customer coverage[21]. - The company has adopted restricted share incentive plans to attract and retain key employees[69]. - The company plans to continue monitoring the performance of cash-generating units to assess goodwill impairment[183].

Financial Performance - The company's annual revenue for 2021 showed significant improvement compared to 2020, particularly in pediatric services, driven by the development of multi-specialty clinical services and refined customer operation management [15]. - The company's revenue for the year ended December 31, 2021, was RMB 632.6 million, representing a year-on-year increase of 23.4% [20]. - Medical service revenue reached RMB 621.3 million, up 25.3% year-on-year, with pediatric services contributing RMB 504.1 million, a growth of 37.0% [20]. - The company reported a net loss of RMB 85.3 million, a significant improvement from a net loss of RMB 377.5 million in the previous year [22]. - Adjusted EBITDA for operating medical institutions was RMB 147.6 million, an increase of approximately 21.3% from RMB 121.7 million in the prior year [22]. - The company's loss attributable to owners for the year ended December 31, 2021, was RMB 1,015 million, compared to a loss of RMB 3,714 million for the year ended December 31, 2020 [59]. - The cost of revenue for medical services in 2021 was RMB 425.4 million, up 17.0% year-on-year, primarily due to increased personnel costs and rising expenses for drugs and consumables [44]. - The gross profit for medical services was RMB 195.97 million in 2021, with a gross margin of 31.5%, compared to 26.7% in 2020 [38]. - Income tax expenses for 2021 were RMB 261 million, a decrease of 46.5% year-on-year, mainly due to no deferred tax asset reversals related to cumulative tax losses [57]. - Financial revenue decreased from RMB 33 million in 2020 to RMB 31 million in 2021, primarily due to a reduction in deposit interest [56]. - Financial expenses decreased from RMB 233 million in 2020 to RMB 167 million in 2021, mainly due to a reduction in foreign exchange losses by RMB 52 million and a decrease in interest expenses by RMB 19 million [56]. Service Demand and Growth Opportunities - By the end of 2021, the company had served nearly 360,000 maternal and child families, with 260,000 patient visits during the year, indicating strong demand for its services [16]. - Over 50% of pediatric medical revenue was contributed by pediatric family doctor members and commercial insurance direct payment clients [16]. - The increase in the number of women of advanced maternal age and the demand for high-quality medical services provide significant growth opportunities for the company [15]. - The pediatric business's rapid recovery is attributed to strengthened clinical deployment and service promotion in pediatric surgery and subspecialties [21]. Operational Highlights - Pediatric outpatient service revenue was RMB 302.1 million, reflecting a 49.5% increase, with outpatient visits totaling 204,535, a rise of 36.2% [20]. - Pediatric inpatient service revenue amounted to RMB 162.5 million, increasing by 34.0%, with inpatient visits at 5,834, up 24.7% [20]. - The revenue from outpatient medical services rose by 43.5% year-on-year, while inpatient medical services revenue increased by 11.4% [44]. - The gross profit from hospital consulting services was RMB 3.735 million in 2021, with a gross margin of 80.8%, significantly up from 40.6% in 2020 [45]. Research and Development - Research and development expenses decreased to RMB 10.6 million in 2021 from RMB 14.5 million in the previous year, attributed to reduced R&D activities [51]. - Research and development expenses increased by 20%, totaling $100 million, to support innovation in healthcare technology [108]. Employee and Management Information - The total number of employees increased from 1,352 as of December 31, 2020, to 1,401 as of December 31, 2021, with total employee compensation expenses amounting to RMB 3,225 million in 2021, compared to RMB 2,638 million in 2020 [83]. - The management team has extensive experience in the healthcare industry, with key executives having over 20 years of relevant experience [120][124]. - The company has implemented a restricted share award plan and employee share scheme to attract and retain qualified staff [137]. Corporate Governance and Compliance - The board of directors emphasized the importance of compliance and governance, with independent directors overseeing key decisions [109]. - All independent non-executive directors have confirmed their independence according to the listing rules [167]. - The company has complied with all relevant environmental laws and regulations in China during 2021 [142]. Strategic Initiatives - The company plans to enhance market promotion and insurance partnerships to increase coverage of target customer groups [33]. - The company aims to leverage its technology subsidiary to upgrade operational structures and customer management systems, enhancing customer experience and loyalty [33]. - The company is expanding its market presence in Southeast Asia, targeting a 30% market share by 2025 [108]. - A strategic acquisition of a smaller competitor was completed, valued at $150 million, aimed at enhancing product offerings [108]. Financial Position and Shareholder Information - As of December 31, 2021, the company had cash and cash equivalents of RMB 2,238 million, down from RMB 2,992 million as of December 31, 2020 [65]. - The company did not recommend a final dividend for the year ended December 31, 2021, consistent with the previous year [84]. - As of December 31, 2021, the company's share premium balance was RMB 2,606.5 million, available for distribution to shareholders [148]. - The company had no borrowings as of December 31, 2021, consistent with the previous year [151]. Supplier and Client Relationships - The top five suppliers accounted for approximately 45.9% of total procurement for the year ended December 31, 2021, down from 55.0% in 2020 [155]. - The company maintained stable relationships with suppliers, ensuring sufficient inventory and bargaining power against price fluctuations [141]. - The company’s major clients contributed less than 5% to total revenue for the year ended December 31, 2021 [155]. Community and Social Responsibility - The company is committed to enhancing its corporate social responsibility initiatives, allocating $10 million for community health programs [108]. - The company is committed to sustainable development by fostering strong relationships with employees, customers, and partners [136].

Revenue and Growth - The company reported revenue of RMB 285.8 million for the first half of 2021, representing a year-on-year increase of 31.9%[20] - Medical service revenue reached RMB 282.0 million, up 34.7% year-on-year, with pediatric services contributing RMB 221.0 million, a 50.4% increase[20] - Revenue from operating medical institutions was RMB 284.2 million, a 34.7% increase from the previous year, with adjusted EBITDA rising approximately 47.9% to RMB 64.8 million[24] - Revenue from medical services reached RMB 282.0 million, a year-on-year increase of 34.7%, accounting for 98.6% of total revenue[37] - Revenue from pediatric services was RMB 220.99 million, accounting for 77.3% of medical service revenue, compared to 67.8% in the previous year[35] - Revenue from obstetric services was RMB 61.01 million, representing a decrease from 28.8% to 21.3% of total medical service revenue[35] - The total revenue for the six months ended June 30, 2021, was RMB 285,844,000, compared to RMB 216,691,000 for the same period in 2020, indicating a year-over-year increase of about 32%[147] Pediatric and Maternal Health Focus - The company noted a strategic focus on pediatric and maternal health services, driven by increasing demand from new generation parents[25] - Pediatric outpatient service revenue was RMB 132.7 million, reflecting a significant growth of 91.8%, with outpatient visits increasing by 83.6% to 91,639[20] - Pediatric inpatient services increased to 2,589 visits, a year-on-year growth of 33.2%, while outpatient services rose to 91,639 visits, up 83.6%[38] - Pediatric outpatient and inpatient service revenue contributions from pediatric surgery and specialized pediatric services increased from 30.6% to 42.7% year-on-year[21] - The proportion of newborns from second and higher-order births increased from 45% in 2016 to 57% in 2019, indicating a growing market for maternal and pediatric services[26] Financial Performance and Losses - The adjusted loss narrowed by 39.2% to RMB 41.7 million compared to RMB 68.6 million in the same period last year[22] - The loss for the six months ended June 30, 2021, was RMB 49.1 million, significantly improved from a loss of RMB 319.3 million in the same period last year[51] - Operating loss decreased to RMB 30,409 thousand from RMB 283,633 thousand year-over-year, reflecting improved operational efficiency[112] - The company reported a net loss of RMB 49,141 thousand for the six months ended June 30, 2021, compared to a net loss of RMB 319,270 thousand in the same period of 2020[112] - Basic and diluted loss per share for the period was RMB (0.11), an improvement from RMB (0.63) in the previous year[115] Expenses and Cost Management - The cost of medical services was RMB 208.5 million, a year-on-year increase of 25.1%, primarily due to business growth and rising personnel costs[38] - Sales expenses for the six months ended June 30, 2021, were RMB 27.7 million, an increase of 38.5% year-on-year, primarily due to the expansion of the marketing team for online business and network expansion[42] - Administrative expenses for the same period were RMB 69.4 million, up 21.5% from RMB 57.1 million in the previous year, mainly due to increased personnel costs following the cancellation of government social security reductions[44] - Research and development expenses amounted to RMB 5.9 million, compared to RMB 5.4 million in the same period last year, related to the development of new online platform technology[45] Assets and Liabilities - The total assets of the company decreased to RMB 1,366,863 thousand from RMB 1,471,045 thousand as of December 31, 2020, representing a decline of approximately 7.1%[107] - The company's non-current assets totaled RMB 879,525 thousand, down from RMB 945,796 thousand, indicating a decrease of about 7%[107] - Current assets decreased to RMB 487,338 thousand from RMB 525,249 thousand, reflecting a decline of approximately 7.2%[107] - The total liabilities as of June 30, 2021, were RMB 638,717 thousand, a decrease from RMB 659,193 thousand at the end of 2020[112] - Non-current liabilities totaled RMB 343,680 thousand, down from RMB 379,687 thousand, indicating a reduction in long-term financial obligations[112] Shareholder Information and Equity - Jason Zhou holds a controlling interest with approximately 44.40% of the company's equity, amounting to 217,556,394 shares[72] - JoeCare holds 150,817,051 shares, representing approximately 30.78% of the company's equity[76] - Victor Gains Limited owns 57,740,181 shares, accounting for approximately 11.8% of the company's equity[76] - Major shareholders include China Life Reinsurance Company and China Reinsurance (Group) Corporation, each holding approximately 6.5% of the company's equity[78] - The board of directors did not recommend the payment of an interim dividend for the six months ended June 30, 2021[69] Operational Adjustments and Future Plans - The company is adjusting operations in response to the ongoing impact of the COVID-19 pandemic on newly opened clinics[24] - The company aims to leverage national policies promoting children's health management to enhance public awareness and service demand[25] - The company plans to enhance brand building and market promotion to increase coverage of target customer groups[30] - The company aims to optimize its business and organizational structure while implementing employee incentive plans[30] - The company is focusing on pediatric subspecialty development and enhancing operational capabilities through technology integration[30] Cash Flow and Investments - Operating cash flow for the six months ended June 30, 2021, was RMB 26,624 thousand, compared to RMB 5,536 thousand in 2020, representing a significant increase[123] - Net cash inflow from operating activities was RMB 8,188 thousand, a turnaround from a net outflow of RMB (8,077) thousand in the same period last year[123] - Net cash outflow from investing activities was RMB (9,778) thousand, compared to a net inflow of RMB 20,609 thousand in 2020, indicating a shift in investment strategy[123] - The remaining amount for new hospitals and clinics is expected to be fully utilized by the end of 2023[92] - The remaining amount for investment in surgical centers and medical service technology is also expected to be fully utilized by the end of 2023[92] Compliance and Governance - The company maintained compliance with the corporate governance code, except for the separation of the roles of Chairman and CEO, which are held by the same individual, Jason Zhou[95] - The audit committee, consisting of independent non-executive directors, reviewed the interim results and confirmed compliance with relevant accounting standards[99] - The company has adopted a strict code of conduct for securities trading by directors and employees, with no reported violations during the review period[96]

新世紀醫療控股有限公 New Century Healthcare Holding Co. Limited New Century Healthcare Holding Co. Limited 新世紀醫療控股有限公司 司 (Incorporated in the Cayman Islands with limited liability) Stock Code: 1518 ANNUAL REPORT 2020 年度報告 2020 ANNUAL REPORT 股份代號 Stock Code: 1518 New Century Healthcare Holding Co. Limited 新世紀醫療控股有限公司 （於開曼群島註冊成立的有限公司） 股份代號：1518 年度報告 2020 En NH H-++++ b nF TT FET ANTING ITARSHING / Property of respondation RTHER HOLDER 60 目錄 公司資料 2 主席報告 4 管理層討論與分析 6 董事及高級管理層 17 董事會報告 25 企業管治報告 47 環境、社會及管治報告 59 獨立核數師報告 6 ...

Financial Performance - The company's revenue for the first half of 2020 was RMB 216.7 million, a decrease of 36.7% year-on-year, marking the first negative growth since its listing in January 2017[9]. - Medical service revenue was RMB 209.3 million, down 34.4% year-on-year, impacted by the COVID-19 pandemic[9]. - The company reported a net loss of RMB 319.3 million for the first half of 2020, with an adjusted net profit of RMB 9.8 million and adjusted EBITDA of RMB 40.1 million[9]. - Total revenue for the six months ended June 30, 2020, was RMB 216,691 thousand, a decrease of 36.7% compared to RMB 342,488 thousand in the same period of 2019[103]. - Gross profit for the period was RMB 42,331 thousand, down 64.5% from RMB 119,088 thousand year-on-year[103]. - The company reported a net loss of RMB 319,270 thousand for the six months ended June 30, 2020, compared to a profit of RMB 4,006 thousand in the same period of 2019[103]. - The company reported a net loss attributable to shareholders of RMB 308,036,000 for the six months ended June 30, 2020, compared to a net loss of RMB 9,392,000 for the same period in 2019, resulting in a basic loss per share of RMB (0.63) compared to RMB (0.02) in 2019[200]. - Total expenses for the six months ended June 30, 2020, were RMB 256,923,000, a decrease of 17.6% from RMB 311,815,000 in 2019[192]. Revenue Breakdown - Pediatric business revenue was RMB 146.9 million, a decline of 42.5% year-on-year, with outpatient visits down 56.1%[12]. - The total revenue for the pediatric services segment was RMB 146,943 thousand, with a cost of revenue of RMB 114,892 thousand, resulting in a segment performance loss before tax of RMB (87,134) thousand[145]. - Medical service revenue for the six months ended June 30, 2020, was RMB 209.3 million, a decrease of 34.4% year-on-year, accounting for 96.6% of total revenue[23]. - Online medical services contributed to 10.1% of total consultations, with a total of 79,510 visits, including 8,017 online consultations[10]. Operational Impact - The pediatric outpatient visit volume has recovered to 90% of the same month last year as of August 2020[12]. - Inpatient services for pediatrics saw a decline of 50.3% with 1,944 visits, while outpatient services decreased by 56.1% with 49,903 visits, primarily due to the impact of COVID-19[24]. - The company expects future operations to be further impacted by ongoing COVID-19 pandemic measures, which have already significantly affected performance[164]. Cost Management - The cost of medical services for the six months ended June 30, 2020, was RMB 166.7 million, a decrease of 21.4% year-on-year, attributed to personnel structure adjustments and reduced operational costs[26]. - The average outpatient spending for pediatric services increased by 16.3% year-on-year to RMB 1,388[12]. - The average inpatient expenditure for pediatrics increased to RMB 27,764, up from RMB 24,561 in the previous year[21]. - The average outpatient expenditure for pediatrics rose to RMB 1,265, compared to RMB 1,140 in the previous year[21]. Financial Position - Cash and cash equivalents as of June 30, 2020, were RMB 308.1 million, down from RMB 349.1 million as of December 31, 2019[45]. - Total assets decreased to RMB 1,519,676 thousand as of June 30, 2020, from RMB 1,876,668 thousand as of December 31, 2019, representing a decline of 19.1%[101]. - The company’s equity attributable to owners decreased to RMB 904,363 thousand from RMB 1,210,805 thousand at the end of 2019, a decline of 25.3%[98]. - The company recorded an impairment loss on intangible assets of RMB 251,461 thousand during the period[103]. Strategic Initiatives - The company plans to enhance its online and offline medical service integration and upgrade offline service scenarios through data[17]. - The company aims to optimize its management structure and explore strategic collaborations across different industries[17]. - The company has integrated IT development and marketing resources to enhance operational efficiency and service delivery[8]. Employee and Governance - The total employee compensation for the six months ended June 30, 2020, was RMB 125.9 million, a decrease from RMB 149.9 million for the same period in 2019[58]. - As of June 30, 2020, the company had 1,350 employees, an increase from 1,307 employees as of June 30, 2019[58]. - The company has adopted restricted share incentive plans to attract and retain key employees[58]. - The company has adhered to the Corporate Governance Code, except for the separation of the roles of Chairman and CEO, which are held by Jason Zhou[85]. Legal and Compliance - The company is involved in ongoing legal proceedings with Serenium Inc., with a favorable arbitration ruling received on August 4, 2020[60]. - The audit committee reviewed the interim results for the six months ending June 30, 2020, and confirmed compliance with relevant accounting standards[89]. Market Outlook - The pediatric medical market is projected to reach RMB 224 billion by 2022, with private medical institutions accounting for 6.1%[14]. - The government continues to support the development of online medical services as part of its national strategy, promoting the integration of internet technology in healthcare[16].

Financial Performance - In 2019, the company's operating revenue increased by 18.4% year-on-year, reaching RMB 729.4 million[20]. - Total revenue for 2019 reached RMB 729.4 million, a year-on-year growth of 18.4%, with medical service revenue growing by 20.6% to RMB 686.0 million[26]. - Pediatric business revenue amounted to RMB 551.9 million, reflecting an 18.3% increase, while obstetrics and gynecology revenue rose by 30.9% to RMB 134.1 million[26]. - The company reported a net profit of RMB 4.5 million for 2019, a significant decline of 93.9% compared to the previous year[26]. - EBITDA for 2019 was RMB 174.7 million, up 15.9% year-on-year, with adjusted EBITDA increasing by 21.0%[26]. - The gross profit for 2019 was RMB 261.3 million, a year-on-year increase of 10.0%, with a slight decrease in gross margin from 38.6% to 35.8%[39]. - Selling expenses increased by 44.4% to RMB 44.2 million, primarily due to network expansion and increased personnel costs[41]. - Administrative expenses rose to RMB 146.6 million from RMB 114.5 million in 2018, driven by network expansion and higher employee costs[42]. - The net loss attributable to the company's owners for 2019 was RMB 26.6 million, compared to a net profit of RMB 41.5 million in 2018[46]. Operational Metrics - The outpatient visit volume for the year was 285,106, representing a 23.0% increase compared to the previous year[21]. - The number of inpatient visits was 11,234, a 15.5% increase year-on-year, with pediatric inpatient visits rising by 10.6% to 8,183[21]. - The total number of pediatric inpatient visits in 2019 was 3,051, reflecting a 31.0% increase from the previous year[21]. - In 2019, the company achieved a total outpatient visit volume of 285,106, representing a year-on-year increase of 23.0%[25]. - Pediatric outpatient visits increased by 18.5% to 234,545, while obstetrics and gynecology outpatient visits surged by 49.7% to 50,561[25]. - Outpatient medical service revenue grew by 22.3% and inpatient medical service revenue grew by 21.1% year-on-year[37]. Strategic Initiatives - The company expanded its medical business scale, increasing the number of hospitals from 2 to 3 and clinics from 1 to 7[20]. - The acquisition of Beijing Jiarun Yunzong Health Technology Co., Ltd. was completed to enhance online medical services[23]. - The company plans to accelerate the application for internet hospital licenses and promote internet-based medical services in 2020[23]. - The company aims to transition from traditional medical services to a "physical + internet" integrated medical service model[23]. - The company plans to enhance its marketing strategies, allocating an additional $5 million to digital marketing initiatives[90]. - The company is investing $10 million in research and development for new technologies in medical services[90]. - A strategic acquisition of a local competitor is anticipated to enhance service offerings and increase market penetration[90]. Market Outlook - The pediatric medical market is projected to reach RMB 224 billion by 2022, with private medical institutions accounting for 6.1%[20]. - The company has set a future outlook with a revenue guidance of $600 million for the next fiscal year, indicating a growth target of 20%[90]. - New product launches are expected to contribute an additional $50 million in revenue, with a focus on innovative healthcare solutions[90]. - The company is expanding its market presence in Southeast Asia, aiming for a 30% market share by 2025[90]. Human Resources - The total employee compensation for 2019 was RMB 310.6 million, an increase from RMB 246.5 million in 2018, reflecting the growth in employee numbers from 1,278 to 1,420[70]. - The group employed 1,420 employees as of December 31, 2019, compared to 1,278 employees at the end of 2018[137]. - The group has implemented a restricted share award plan to attract and retain qualified medical professionals and management staff[110]. - The company has established an internal training system to ensure continuous professional development for its employees[110]. Corporate Governance - The company emphasizes the importance of high corporate governance standards for business strategy formulation and transparency[197]. - The company has adopted the Corporate Governance Code and believes it has complied with all applicable provisions, except for A.2.1, which states that the roles of Chairman and CEO should be separate[198]. - The board currently consists of twelve members, including Jason Zhou as Chairman and CEO, and Xin Hong as Senior Vice President and COO[199]. - The board includes independent non-executive directors, with specific roles in the audit and remuneration committees[200]. Related Party Transactions - The company confirmed that all related party transactions were conducted on normal commercial terms and were in the best interest of shareholders[165]. - The company’s independent non-executive directors reviewed and confirmed that the related party transactions were fair and reasonable[165]. - Related party transactions for the year ended December 31, 2019, are disclosed in the annual report, with certain transactions exempt from compliance with listing rules[163]. Risk Factors - The group faces potential risks related to reputation, customer preferences, and talent acquisition, which could adversely affect its operations[105][108]. - The financial performance and operational results are highly dependent on patient preferences, consumer confidence, and the overall economic conditions of the market[107].

Revenue and Growth - Total revenue for the first half of 2019 reached RMB 342.5 million, representing a year-on-year growth of 26.0%[16] - Pediatric business generated revenue of RMB 255.8 million, a year-on-year increase of 22.1%[16] - Obstetrics and gynecology services achieved revenue of RMB 63.5 million, reflecting a significant year-on-year growth of 54.5%[16] - Revenue from medical services accounted for 93.2% of total revenue, amounting to RMB 319.2 million, compared to 92.1% in the previous year[22] - Total medical services revenue for the six months ended June 30, 2019, was RMB 319.2 million, a year-on-year increase of 27.4%, contributing 93.2% to the group's total revenue[27] - Pediatric services revenue reached RMB 255.8 million, accounting for 74.7% of total revenue, while obstetric services revenue was RMB 63.5 million, representing 18.5%[25] - Revenue for the six months ended June 30, 2019, was RMB 342,488 thousand, an increase of 26% compared to RMB 271,855 thousand for the same period in 2018[102] Profitability and Expenses - Adjusted EBITDA increased by 19.3% to RMB 89.9 million compared to the previous year[16] - The company reported a net loss attributable to owners of RMB 6.2 million, with adjusted profit attributable to owners (excluding new institutions) at RMB 34.7 million, a decrease of 25.4% year-on-year[16] - Gross profit from medical services was RMB 107.2 million, with a gross margin of 33.6%, down from 40.8% in the previous year[23] - Gross profit for the same period was RMB 119,088 thousand, up from RMB 113,871 thousand, reflecting a gross margin improvement[102] - Operating profit decreased to RMB 32,606 thousand from RMB 53,709 thousand, indicating a decline of 39.2% year-over-year[102] - Net profit for the period was RMB 4,006 thousand, a significant drop from RMB 41,802 thousand in the previous year, representing a decrease of 90.4%[102] - Selling expenses rose to RMB 19.1 million, a 57.4% increase, attributed to higher marketing team costs and expenses from new institutions[33] - Administrative expenses increased to RMB 69.3 million from RMB 49.8 million, driven by management costs from new institutions and organizational improvements[35] - Total expenses for the six months ended June 30, 2019, were RMB 311,815,000, an increase of 41.6% compared to RMB 219,990,000 for the same period in 2018[195] Assets and Liabilities - Total assets as of June 30, 2019, amounted to RMB 1,953,311 thousand, an increase from RMB 1,611,024 thousand at the end of 2018[96] - Non-current assets totaled RMB 1,352,310 thousand, up from RMB 955,309 thousand, indicating a growth of 41.5%[96] - Current liabilities decreased to RMB 290,277 thousand from RMB 312,460 thousand, a reduction of 7.1%[98] - The company’s total liabilities as of June 30, 2019, were RMB 1,497,487 thousand, compared to RMB 1,516,823 thousand at the beginning of the year[106] - The total liabilities as of June 30, 2019, were RMB 709,903 thousand, up from RMB 339,680 thousand at the end of 2018, which is an increase of about 108%[159] Cash Flow and Investments - Cash and cash equivalents amounted to RMB 303.2 million as of June 30, 2019, down from RMB 433.3 million as of December 31, 2018[44] - Operating cash flow for the six months ended June 30, 2019, was RMB 69,446 thousand, a significant increase from RMB 15,604 thousand in the same period of 2018[111] - Net cash inflow from operating activities was RMB 41,772 thousand, compared to a net outflow of RMB 3,589 thousand in the previous year[111] - The company reported a net cash outflow from investing activities of RMB 79,717 thousand, compared to RMB 37,895 thousand in the same period of 2018[111] - The company incurred a net cash outflow from financing activities of RMB 92,410 thousand, compared to a net outflow of RMB 46,775 thousand in the previous year[111] Shareholder Information and Corporate Governance - As of June 30, 2019, JoeCare holds approximately 30.5% of the company's shares, totaling 149,462,051 shares[69] - Victor Gains Limited, controlled by Ms. Liang Yanqing, owns 57,740,181 shares, representing 11.8% of the company[69] - The company has not received any notifications regarding additional shareholdings from directors or senior management as of June 30, 2019[73] - The company has maintained high corporate governance standards and has applied the principles of the Corporate Governance Code as per the listing rules[83] - The chairman and CEO roles are held by the same individual, Jason Zhou, which the board believes benefits the company's strategic direction[84] Accounting and Financial Standards - The company adopted the new accounting standard HKFRS 16 for leases, which impacted its financial statements starting January 1, 2019[118] - The adoption of Hong Kong Financial Reporting Standard 16 resulted in the recognition of lease liabilities amounting to RMB 456,477,000 as of January 1, 2019[124] - The total right-of-use assets recognized amounted to RMB 415,347,000 as of January 1, 2019, with a decrease to RMB 408,981,000 by June 30, 2019[126] - The impact of the accounting policy change led to a decrease in earnings per share by RMB 0.01 for the six months ended June 30, 2019[129] Employee Compensation and Incentives - Employee compensation expenses totaled RMB 149.9 million for the six months ended June 30, 2019, compared to RMB 108.3 million for the same period in 2018[56] - The total number of restricted shares granted under the employee share incentive plan remained at 9,000,000 as of June 30, 2019[185] - The total expense recognized for share-based payments under the restricted share incentive plan was RMB 3,952,000 for the six months ended June 30, 2019, compared to RMB 7,701,000 for the same period in 2018, indicating a decrease of 48.7%[186] Future Plans and Strategic Focus - The company plans to establish a merger and acquisition fund to identify and cultivate new medical institutions[17] - The integration of online and offline medical services is a strategic focus to enhance operational efficiency[18] - The company aims to expand its medical service network in Beijing, Chengdu, and the Guangdong-Hong Kong-Macao Greater Bay Area[18] - The company plans to continue expanding its market presence and invest in new technologies and products to drive future growth[160]

Financial Performance - The company achieved a revenue of RMB 616.0 million in 2018, representing a year-on-year growth of 14.8%[19] - Adjusted net profit for the year was RMB 132.1 million, reflecting a year-on-year increase of 15.0%[19] - EBITDA for the year was RMB 150.7 million, a decrease of 12.3% year-on-year, but adjusted EBITDA increased by 13.6%[22] - The company's medical services revenue for 2018 was RMB 569.0 million, representing a year-on-year growth of 15.8%, accounting for 92.4% of total revenue[42] - The gross profit for 2018 was RMB 237.6 million, a decrease of 8.0% year-on-year, primarily due to losses from newly acquired institutions[47] - The gross margin declined from 48.1% in 2017 to 38.6% in 2018[47] - Revenue from outpatient medical services grew by 18.4% year-on-year, while inpatient medical services revenue increased by 13.0%[42] - The net profit for the year ended December 31, 2018, was RMB 73.4 million, down from RMB 114.9 million in 2017[54] Operational Highlights - Outpatient visits exceeded 230,000, with a year-on-year increase of 15.5%, and pediatric outpatient visits grew by 10.9%[19] - Pediatric business revenue reached RMB 466.6 million, with a year-on-year growth of 13.0%[22] - The obstetrics and gynecology business achieved revenue of RMB 102.4 million, growing by 30.5% year-on-year[22] - The company completed 5,452 inpatient surgeries in 2018, reflecting a 24.2% increase compared to the previous year[43] - Pediatric inpatient services reached 7,401 visits in 2018, a year-on-year increase of 9.8%, while outpatient services totaled 198,003 visits, up 10.9%[43] Strategic Initiatives - The company plans to accelerate the establishment of medical institutions in Shanghai, Guangzhou, and Shenzhen[19] - The company aims to build a nationwide telemedicine center to export quality medical resources[19] - The company is focused on becoming a world-class medical group specializing in high-quality services for women and children[19] - The company aims to establish a maternal and child health management closed loop, integrating physical networks, medical services, member management, insurance, and online services[34] - The establishment of specialized centers for maternal and child health is underway, leveraging quality resources and telemedicine networks to enhance operational efficiency[35] Acquisitions and Investments - The company completed the acquisition of Chengdu New Century, enhancing its strategic presence in the southwest region[18] - The acquisition of Chengdu New Century contributed RMB 39.3 million in revenue, with pediatric revenue at RMB 14.1 million and obstetrics revenue at RMB 24.1 million[26] - The company completed the acquisition of 85.0% of Chengdu New Century for a cash consideration of RMB 200.0 million, which was finalized in August 2018[63] - Capital expenditures for 2018 amounted to RMB 242.7 million, a significant increase from RMB 13.3 million in 2017, driven by upgrades to existing medical facilities and acquisitions[65] Employee and Management - The company has a total of 1,278 employees as of December 31, 2018, an increase from 829 employees in 2017, with total employee compensation expenses amounting to RMB 246.5 million in 2018[82] - The company has adopted a restricted share incentive plan, granting 9,000,000 restricted shares to 2 directors and 265 employees[82] - The total employee compensation, including directors' remuneration, amounted to RMB 246.5 million for the year ended December 31, 2018, compared to RMB 198.4 million in 2017[151] Market Outlook - By 2022, the pediatric medical market is projected to reach RMB 224 billion, with private medical institutions accounting for 6.1%[29] - The obstetrics and gynecology market is expected to reach RMB 667.1 billion by 2022, with private institutions making up 12.5%[32] - The company is positioned as a leader in the high-end private pediatric medical service market in China, maintaining a competitive edge[29] - The company has outlined a future outlook with a projected revenue growth of 20% for the next fiscal year[93] Governance and Compliance - The company’s operations are subject to compliance with laws and regulations in mainland China, the Cayman Islands, and Hong Kong[130] - The group has complied with all relevant environmental laws and regulations in 2018, ensuring proper handling of medical waste and emissions[129] - The independent non-executive directors confirmed their independence according to the listing rules[152] Financial Management - The management team emphasized the importance of internal controls and IT oversight in financial management[89] - The group’s financial risk management objectives and policies are detailed in the financial statements[117] Related Party Transactions - Related party transactions for the year ended December 31, 2018, are disclosed in the consolidated financial statements[187] - The company confirmed that all ongoing related party transactions were conducted in the ordinary course of business and on normal commercial terms[188]