New Journey(002219)2019-04-29 16:00Business Model and Strategy - The company has transitioned from a single pharmaceutical manufacturing business to a dual-driven "big health" industry model, focusing on both medical services and pharmaceutical manufacturing [22]. - The company has outlined its future development strategy, which includes expanding its market presence and enhancing its product offerings [7]. - The company has emphasized the importance of risk awareness among investors regarding its forward-looking statements and operational plans [7]. - The company is focused on integrating traditional Chinese medicine with innovative biopharmaceutical research and market operations [41]. - The company aims to enhance its medical service quality and expand its market presence in response to the growing demand for healthcare services driven by urbanization and an aging population [98]. - The company plans to focus on major chronic diseases and high-end maternal and child health services, aligning with national health policies to improve traditional Chinese medicine and generic drug quality [98]. - The company will implement a new operational management structure to optimize resource allocation and enhance internal coordination [101]. - The company aims to establish a comprehensive health service network covering both urban and rural areas, particularly in elderly health and care services [106]. Financial Performance - The company reported a significant increase in user data, reflecting a growing customer base in its medical services sector [22]. - The company’s operating revenue for 2018 was ¥3,838,392,197.48, representing a 12.92% increase compared to the previous year [6]. - The net profit attributable to shareholders was -¥1,417,817,723.30, a decrease of 799.09% year-on-year [6]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was -¥1,395,854,132.33, a decline of 826.17% compared to the previous year [6]. - The total assets at the end of 2018 were ¥8,758,983,757.39, down 14.57% from the previous year [26]. - The net assets attributable to shareholders decreased to ¥2,711,131,540.28, a reduction of 35.27% year-on-year [26]. - The company reported a basic earnings per share of -¥0.7601, a decrease of 799.26% compared to the previous year [6]. - The total profit for the year was CNY -133,390.72 million, representing a year-on-year decline of 536.19% [61]. - The company reported a net loss of approximately ¥1.42 billion for 2018, compared to a net profit of ¥202.81 million in 2017 [117]. Investment and Acquisitions - The company acquired PRP Diagnostic Imaging Pty Ltd. for CNY 20.66 billion, representing 23.39% of the company's net assets [53]. - The company has invested in two industry merger funds, further expanding its market presence in the healthcare sector [39]. - The company established a wholly-owned subsidiary, Guang'an Hengyuan Hospital, in April 2018, expanding its consolidation scope [70]. - The company disposed of subsidiaries including Shanghai Shentuo Biotechnology and Dalian Dechang Pharmaceutical, reducing its consolidation scope [70]. - The company committed to a profit growth of no less than 10% for the acquired Guang'an Fuyuan Hospital, with a target net profit of RMB 1,089 million for 2018 [132]. Cash Flow and Dividends - The company plans not to distribute cash dividends or issue bonus shares, nor to increase capital using reserves [7]. - The cash dividend amount for 2018 was ¥0, representing 0.00% of the net profit attributable to ordinary shareholders [117]. - The company has ongoing funding requirements for various projects, including acquisitions and hospital construction, which influenced its decision on dividend distribution [113]. - The company plans to continue not distributing cash dividends or issuing bonus shares in the foreseeable future [118]. Operational Performance - The company operates a total of 1 tertiary hospital, 7 secondary or higher comprehensive hospitals, and 5 hospitals under construction, indicating a scale in its medical service industry [38]. - The company operates 15 hospitals with 8,700 open beds, serving over 3.5 million outpatient visits and 260,000 inpatient discharges annually, leveraging significant clinical resources for healthcare services [44]. - The company reported 3.5 million outpatient visits and 260,000 inpatient visits during the year, indicating a solid foundation in the healthcare service sector [61]. - The company launched the "Duyiwei" brand toothpaste series with pain relief, hemostatic, anti-inflammatory, and antibacterial functions, along with toothbrushes and hotel toothpaste products [40]. Market Trends and Demand - In 2017, China's total health expenditure reached 5.16 trillion yuan, growing by 11.34%, with an expected future growth rate of 10% [50]. - The medical service demand in China continues to grow, with a total of 7.54 billion medical visits recorded from January to November 2018, a year-on-year increase of 3.2% [50]. - The healthcare service market is rapidly developing, with private healthcare institutions showing particularly strong performance [48]. - Revenue from overseas markets surged by 94.57% to ¥956,499,460.32, representing 24.92% of total revenue [65]. Social Responsibility and Compliance - The company has actively fulfilled social responsibilities, investing approximately 1,027.26 million in poverty alleviation efforts, including 688.57 million in health-related assistance [192]. - The company has provided medical assistance to over 1,400 impoverished individuals with disabilities, with a total investment of approximately 154.06 million [192]. - The company has committed to continuing its targeted poverty alleviation plans in 2019, leveraging its industrial advantages [197]. - The company has maintained a 100% compliance rate in signing labor contracts and participating in social insurance for employees [186]. - The company has established a comprehensive internal management and control system to protect the rights of shareholders and creditors, ensuring transparency and compliance with disclosure obligations [186]. Risks and Challenges - The company has identified potential risks, including policy changes in healthcare reform, which may impact operations and will enhance its analysis and response strategies [107]. - The company’s financial performance has been impacted by asset impairment provisions and operational challenges in recent years [116]. - The company is currently appealing a judgment related to a performance commitment dispute, with a claim amount of CNY 91.03 million for unmet performance targets in 2017 [150]. Shareholder and Governance Issues - The company has not reported any changes in its controlling shareholders since its listing [22]. - The controlling shareholder, Mr. Que Wenbin, has 794,009,999 shares frozen, accounting for 42.57% of the total share capital [157]. - The company did not face any situations that could lead to suspension or termination of listing during the reporting period [146]. - The company has committed to measures to avoid competition with its own subsidiaries and related entities [122].