巨星医疗控股(02393) - 2024 - 中期财报

Company Information The report provides information on the company's executive and non-executive directors, committee members, legal advisors, principal bankers, and share registrars - The report provides information on the company's executive directors, non-executive directors, members of various committees, legal advisors, principal bankers, and share registrars, detailing basic corporate governance and operational support structures[3][4] Management Discussion and Analysis Company Profile and Market Overview Yes!Star Medical is a leading in-vitro diagnostic (IVD) product distributor and service provider in China, operating across major provinces and cities, also manufacturing medical films for Fujifilm and under its own 'Yes!Star' brand, striving to optimize operations amidst intense competition and rapid growth in the domestic IVD market - The company is one of the largest in-vitro diagnostic product distributors and service providers in China, covering core cities like Beijing, Shanghai, Guangzhou, Shenzhen, and multiple provinces[5] - The company also manufactures medical films, including OEM for Fujifilm and selling dental and medical dry films under its own brand 'Yes!Star'[5] - China's in-vitro diagnostic market reached RMB 125.3 billion in 2023, a 12.6% year-on-year increase, projected to grow to RMB 133.2 billion in 2024, driven by economic development, aging population, and technological advancements[6] Business Overview During the reporting period, the company successfully completed the debt restructuring of its senior notes, expecting to recognize a gain of approximately US$153 million, while making progress in proprietary brand R&D with 34 new IVD product registrations/filings, though overall revenue decreased by 13.5% year-on-year due to centralized procurement policies, basic earnings per share significantly increased to RMB 0.47 due to substantial other income from debt restructuring, with medical business revenue and gross margin declining, and non-medical business revenue decreasing but gross margin improving Debt Restructuring and R&D Progress The company completed the debt restructuring of its 9.5% senior notes due 2026, paying US$60.5 million for redemption and expecting to recognize a gain of approximately US$153 million in profit or loss, while continuing R&D investment, obtaining 34 new in-vitro diagnostic product registrations/filings in the first half of 2024, totaling 134, and planning to expand into emerging fields like POCT and gene sequencing - The company completed debt restructuring of senior notes, expecting to recognize a gain of US$152,704,000 (approximately RMB 1.083 billion) from the derecognition of senior notes in 2024 profit or loss[9] - The company continues to increase investment in proprietary brand R&D, obtaining 34 in-vitro diagnostic product registrations/filings in the first half of 2024, accumulating to 134[9] Performance Overview For the six months ended June 30, 2024, group total revenue decreased by 13.5% year-on-year to RMB 1.27 billion, and gross profit decreased by 28.5% to RMB 218 million, primarily due to the impact of centralized procurement on the medical segment; however, basic earnings per share significantly increased from RMB 0.06 cents to RMB 0.47 due to a RMB 1.09 billion gain from senior note redemption, leading to a 21,359% surge in other income, with the company deciding not to declare an interim dividend 2024 Interim Performance Overview (For the Six Months Ended June 30) | Metric | 2024 Interim | 2023 Interim | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 1.2738 billion | RMB 1.4727 billion | -13.5% | | Gross Profit | RMB 217.6 million | RMB 304.3 million | -28.5% | | Selling and Distribution Expenses | RMB 76.5 million | RMB 65.1 million | +17.5% | | Administrative Expenses | RMB 101.8 million | RMB 129.4 million | -21.3% | | Finance Costs | RMB 21.2 million | RMB 89.3 million | -76.2% | | Other Income | RMB 1.0944 billion | RMB 5.1 million | +21,359% | | Basic Earnings Per Share | RMB 0.47 | RMB 0.0006 | Significant Increase | - The Board resolved not to declare any interim dividend for the six months ended June 30, 2024[10] Segment Business Performance Medical business accounted for 91.3% of total revenue, with segment revenue decreasing by 12.8% year-on-year to RMB 1.16 billion and gross margin declining by 4.4 percentage points to 18.1% due to national healthcare reform and centralized procurement policies; non-medical business accounted for 8.7% of total revenue, with revenue decreasing by 20.0% year-on-year to RMB 111.4 million, but gross margin increased by 1.6 percentage points to 17.1% due to cost optimization Performance by Business Segment (For the Six Months Ended June 30, 2024) | Business Segment | % of Total Revenue | Segment Revenue (RMB) | Year-on-Year Change | Gross Margin | Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Business | 91.3% | RMB 1.1624 billion | -12.8% | 18.1% | -4.4 percentage points | | Non-Medical Business | 8.7% | RMB 111.4 million | -20.0% | 17.1% | +1.6 percentage points | Outlook The company believes the future of China's in-vitro diagnostic business will be influenced by economic, technological, and global health trends, focusing on technological advancements (e.g., AI, automation), strengthening personalized medicine (e.g., gene sequencing), and addressing global health challenges (e.g., rapid infectious disease diagnosis) to consolidate its market position and seize development opportunities - The company expects technologies such as artificial intelligence (AI), robotics, and automation to continue transforming the in-vitro diagnostic industry, improving diagnostic accuracy, speed, and efficiency[10] - Personalized medicine will further develop in China, combining genomic sequencing, biomarkers, and advanced diagnostics for more precise diagnosis and treatment[10] - Global health challenges like infectious diseases will continue to drive demand for advanced in-vitro diagnostic technologies and rapid testing capabilities[11] Financial Review During this period, the company's financial position significantly improved, with interest-bearing bank loans and other borrowings substantially reduced due to the completion of senior note redemption, leading to a sharp decrease in the gearing ratio from 150% to 22% and an increase in the current ratio from 0.77 to 1.24; selling expenses increased due to market expansion, while administrative expenses decreased through cost control, and finance costs significantly reduced due to note redemption, with a decrease in total employees but an increase in total staff costs Changes in Key Financial Ratios | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | RMB 132.9 million | RMB 203.1 million | | Current Interest-Bearing Bank Loans and Other Borrowings | RMB 276.6 million | RMB 1.5716 billion | | Current Ratio | 1.24 | 0.77 | | Gearing Ratio | 22% | 150% | - Selling and distribution expenses increased by 17.5% year-on-year to RMB 76.5 million, primarily due to the company's active expansion into new regions and development of new products[15] - Administrative expenses decreased by 21.3% year-on-year to RMB 101.8 million, benefiting from stringent cost management measures[16] - Finance costs significantly decreased by 76.2% year-on-year to RMB 21.2 million, mainly because no further interest payments were required after the redemption of senior notes[17] - As of June 30, 2024, the Group had 726 employees, a decrease from 878 in the same period last year, but total staff costs increased from RMB 69.3 million to RMB 81.0 million[20] Other Information Significant Events and Corporate Governance This section discloses significant events during the reporting period, including the completion of offshore debt restructuring, arbitration progress with a Shengshiyuan seller, expiry of the share option scheme, and shareholdings of directors and major shareholders; the company confirmed the redemption and cancellation of senior notes, and largely complied with corporate governance codes, though Chairman He Zhenfa's absence from the AGM was noted, with the audit committee having reviewed the unaudited interim results - The company paid the redemption amount on March 14, 2024, and completed the redemption and cancellation of all senior notes on March 18, with the notes delisted from the Singapore Exchange[26] - Arbitration with one of the Shengshiyuan sellers terminated due to an agreement on purchasing the remaining 3% equity, while arbitration with another seller is ongoing[24] - The company's share option scheme expired on September 17, 2023, with no further options granted thereafter, and no new share option scheme adopted yet[28] Major Shareholder Holdings (As of June 30, 2024) | Shareholder Name/Entity | Capacity | Number of Shares Held | Approximate Percentage | | :--- | :--- | :--- | :--- | | He Zhenfa (Director) | Personal and Corporate Interest | 554,375,000 | 23.78% | | Hartono Jeane | Beneficial Owner | 391,870,000 | 16.80% | | Hartono Rico | Beneficial Owner | 265,810,000 | 11.40% | | FUJIFILM Corporation | Beneficial Owner | 230,000,000 | 9.86% | | Li Bin | Beneficial Owner | 164,600,600 | 7.06% | - The Audit Committee has reviewed the Group's interim results for the period and deemed them prepared in compliance with applicable accounting standards and requirements, with sufficient disclosures made[44] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the company recorded revenue of RMB 1.274 billion, a 13.5% year-on-year decrease; however, profit for the period surged from RMB 9.26 million in the prior year to RMB 1.093 billion due to a RMB 1.083 billion gain from derecognition of senior notes, with profit attributable to owners of the company at RMB 1.089 billion and basic earnings per share at RMB 0.47 Key Items from Statement of Profit or Loss (For the Six Months Ended June 30, RMB Thousand) | Item | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 1,273,785 | 1,472,679 | | Gross Profit | 217,640 | 304,268 | | Other Income and Gains | 1,094,425 | 5,066 | | Profit Before Tax (Continuing Operations) | 1,112,323 | 37,998 | | Profit for the Period | 1,092,525 | 9,255 | | Profit Attributable to Owners of the Company | 1,089,239 | 3,617 | | Basic Earnings Per Share | RMB 0.47 | RMB 0.0016 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets were RMB 1.839 billion and total liabilities were RMB 1.161 billion; financial position significantly improved due to debt restructuring, with current liabilities sharply decreasing from RMB 3.721 billion to RMB 1.044 billion, net current assets turning positive at RMB 252 million, and total equity shifting from RMB -398 million to RMB 678 million Key Items from Statement of Financial Position (RMB Thousand) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-Current Assets | 543,216 | 559,123 | | Total Current Assets | 1,295,546 | 2,867,064 | | Total Current Liabilities | 1,043,812 | 3,721,391 | | Net Current Assets/(Liabilities) | 251,734 | (854,327) | | Total Non-Current Liabilities | 116,903 | 103,238 | | Net Assets/(Liabilities) | 678,047 | (398,442) | | Equity Attributable to Owners of the Company | 618,551 | (457,501) | | Total Equity/(Capital Deficit) | 678,047 | (398,442) | Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, net cash outflow from operating activities was RMB 51.37 million; investing activities recorded a net cash inflow of RMB 411 million due to disposal of a subsidiary; financing activities recorded a net cash outflow of RMB 430 million due to repayment of senior notes; cash and cash equivalents at period-end were RMB 133 million, a decrease of RMB 70.32 million from the beginning of the period Cash Flow Statement Summary (For the Six Months Ended June 30, RMB Thousand) | Item | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | (51,373) | 108,541 | | Net Cash from/(used in) Investing Activities | 411,248 | (58,430) | | Net Cash used in Financing Activities | (430,194) | (63,035) | | Net Decrease in Cash and Cash Equivalents | (70,319) | (12,924) | | Cash and Cash Equivalents at End of Period | 132,880 | 281,983 | Summary of Notes to Financial Statements The notes to the financial statements detail the company's accounting policies, segment operations, debt restructuring, discontinued operations, and related party transactions; imaging printing products and medical products and equipment are the two operating segments, with the latter being the primary revenue source; the notes extensively disclose the senior note debt restructuring process and the resulting RMB 1.083 billion gain; additionally, the company completed the disposal of Anbaida Group Company (Disposal Group) during the period, with its results reclassified as discontinued operations - The Group has two reportable operating segments: imaging printing products and medical products and equipment, with the medical products and equipment segment contributing the vast majority of revenue, reaching RMB 1.162 billion[60][61] - The company completed the proposed debt restructuring of senior notes on March 14, 2024, and recognized a gain of US$152,704,000 (approximately RMB 1.083 billion) from the derecognition of senior notes in profit or loss[85][86] - The company completed the disposal of 94.2% equity interest in Anbaida Group Company (Disposal Group) on January 12, 2024, for a consideration of RMB 575 million, with this business reclassified as discontinued operations[95]