REPUBLIC HC(08357) - 2020 Q3 - 季度财报

2020 Financial Highlights (Unaudited) The group's unaudited financial performance for the nine months ended September 30, 2020, shows a slight revenue decrease but a significant net profit decline due to increased employee benefits - Revenue for the nine months ended September 30, 2020, was approximately SGD 9.6 million, a decrease of approximately 1.7% compared to the same period last year[6] - Gross profit was approximately SGD 6.8 million, remaining consistent with approximately SGD 6.9 million in the prior year period[7] - Net profit after tax was approximately SGD 0.3 million, a decrease of approximately 75.7% from approximately SGD 1.3 million in the prior year period, primarily due to a 25.1% increase in employee benefits expenses to SGD 4.0 million[7] - The Board of Directors resolved not to declare any dividend for the period (prior year period: nil)[8] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the unaudited consolidated financial performance, including revenue, expenses, and net profit, for the three and nine months ended September 30, 2020 and 2019 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) | Indicator | Three Months Ended Sep 30 (2020) (SGD) | Three Months Ended Sep 30 (2019) (SGD) | Nine Months Ended Sep 30 (2020) (SGD) | Nine Months Ended Sep 30 (2019) (SGD) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 4,062,421 | 3,530,132 | 9,615,431 | 9,780,985 | | Other income | — | 38,351 | 196,057 | 58,730 | | Consumables and medical supplies used | (993,361) | (455,880) | (2,217,102) | (1,947,100) | | Medical professional costs | (261,298) | (106,660) | (603,039) | (931,960) | | Employee benefits expenses | (1,241,794) | (1,249,856) | (4,038,250) | (3,228,895) | | Depreciation of plant and equipment | (50,520) | (43,099) | (267,974) | (269,925) | | Depreciation of right-of-use assets | (28,193) | — | (462,739) | — | | Interest expense on lease liabilities | (23,963) | — | (81,858) | — | | Other operating expenses | (492,910) | (734,765) | (1,503,281) | (1,855,428) | | Profit before income tax | 970,382 | 978,223 | 637,245 | 1,606,407 | | Income tax expense | (75,000) | (263,547) | (318,607) | (334,847) | | Profit and total comprehensive income for the period attributable to owners of the Company | 895,382 | 714,676 | 309,442 | 1,271,560 | | Basic and diluted earnings per share (SGD Cents per share) | 0.17 | 0.14 | 0.06 | 0.24 | Unaudited Condensed Consolidated Statement of Changes in Equity This statement details the changes in the group's equity components, including share capital, reserves, and retained earnings, for the periods ended September 30, 2019 and 2020 Condensed Consolidated Statement of Changes in Equity (Unaudited) | Item | Share Capital (SGD) | Share Premium (SGD) | Other Reserves (SGD) | Exchange Reserve (SGD) | Retained Earnings (SGD) | Total (SGD) | Non-controlling Interests (SGD) | Total Equity (SGD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2019 | 896,552 | 10,710,421 | 420,000 | – | 547,801 | 12,574,774 | (160) | 12,574,614 | | Profit for the financial period | – | – | – | – | 1,271,560 | 1,271,560 | – | 1,271,560 | | Balance at September 30, 2019 | 896,552 | 10,710,421 | 420,000 | – | 1,819,361 | 13,846,334 | (160) | 13,846,174 | | Balance at January 1, 2020 | 896,552 | 10,710,421 | 420,000 | – | 1,185,208 | 13,212,181 | – | 13,212,181 | | Profit for the financial period | – | – | – | – | 318,638 | 318,638 | – | 318,638 | | Other comprehensive income | – | – | – | (9,196) | – | (9,196) | – | (9,196) | | Balance at September 30, 2020 | 896,552 | 10,710,421 | 420,000 | (9,196) | 1,503,846 | 13,521,623 | – | 13,521,623 | - Other reserves as of September 30, 2020, represent the difference between the consideration paid by the Company and the share capital of several subsidiaries[11] Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed notes on the group's financial statements, covering general information, accounting policies, revenue breakdown, taxation, and earnings per share 1.1 General Information and Reorganization The company, an investment holding company incorporated in the Cayman Islands, operates medical clinics in Singapore and provides management consulting services, listed on HKEX GEM in 2018, and underwent common control transactions involving clinic acquisitions during the period - The Company was incorporated in the Cayman Islands on January 3, 2018, primarily engaged in operating medical clinics and providing management consulting services in Singapore[13] - The Company's shares were listed on GEM of The Stock Exchange of Hong Kong Limited on June 15, 2018[13] - On January 1, 2019, and July 1, 2019, several entities within the Group engaged in common control transactions involving the acquisition of clinics[14] - On April 1, 2020, DCPL and SACPL acquired several clinics, which were also classified as common control transactions[15] 1.2 Basis of Presentation and Accounting Policies The unaudited condensed consolidated financial statements are prepared in accordance with IFRS and GEM Listing Rules, using consistent accounting policies with 2019 audited statements, with no significant impact from new standards, and have been reviewed by the audit committee - The unaudited condensed consolidated financial statements have been prepared in accordance with all applicable International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board and the applicable disclosure provisions of the GEM Listing Rules[16] - The accounting policies and methods of computation used in preparing these statements are the same as those adopted in the preparation of the 2019 audited consolidated financial statements[16] - The adoption of all IFRS effective for accounting periods beginning on January 1, 2020, did not result in changes to the Group's accounting policies and had no significant impact on the reported amounts[16] - These unaudited condensed consolidated financial statements have been reviewed by the Board's Audit Committee[18] 1.3 Revenue The group's revenue primarily derives from medical services, including treatment, medical examination, and consultation services, with treatment services contributing the largest share at 64.7% for the nine months ended September 30, 2020 Revenue Analysis (by Service Type) | Service Type | Three Months Ended Sep 30 (2020) (SGD) | Three Months Ended Sep 30 (2019) (SGD) | Nine Months Ended Sep 30 (2020) (SGD) | Nine Months Ended Sep 30 (2019) (SGD) | | :--- | :--- | :--- | :--- | :--- | | Treatment services | 2,645,176 | 2,139,711 | 6,221,498 | 5,753,490 | | Medical examination services | 1,049,615 | 1,019,514 | 2,466,083 | 3,040,290 | | Consultation services | 367,630 | 370,907 | 927,850 | 987,205 | | Total Revenue | 4,062,421 | 3,530,132 | 9,615,431 | 9,780,985 | 1.4 Income Tax Expense The group's Singapore corporate income tax is accrued at 17% of estimated taxable profit, while entities registered in the British Virgin Islands or Cayman Islands are tax-exempt - Singapore corporate income tax for the nine months ended September 30, 2020, was accrued at 17% of estimated taxable profit (2019: 17%)[21] - Entities incorporated in the British Virgin Islands or Cayman Islands are exempt from taxation[21] Income Tax Expense | Tax Type | Three Months Ended Sep 30 (2020) (SGD) | Three Months Ended Sep 30 (2019) (SGD) | Nine Months Ended Sep 30 (2020) (SGD) | Nine Months Ended Sep 30 (2019) (SGD) | | :--- | :--- | :--- | :--- | :--- | | Current tax: Singapore profit tax | 75,000 | 263,547 | 309,442 | 334,847 | 1.5 Earnings Per Share Basic earnings per share are calculated by dividing profit attributable to owners by the weighted average number of ordinary shares outstanding; diluted earnings per share are identical as no dilutive ordinary shares existed during the reporting period Earnings Per Share Calculation | Indicator | Three Months Ended Sep 30 (2020) (SGD) | Three Months Ended Sep 30 (2019) (SGD) | Nine Months Ended Sep 30 (2020) (SGD) | Nine Months Ended Sep 30 (2019) (SGD) | | :--- | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company | 895,382 | 714,676 | 318,638 | 1,271,650 | | Weighted average number of ordinary shares for basic and diluted EPS | 520,000,000 | 520,000,000 | 520,000,000 | 520,000,000 | | Earnings per share (SGD Cents per share) | 0.17 | 0.14 | 0.06 | 0.24 | - Diluted earnings per share are the same as basic earnings per share as there were no dilutive ordinary shares during the relevant period[27] Management Discussion and Analysis This section provides an overview of the group's business, financial performance, and future outlook, including the impact of COVID-19 and strategic initiatives 2.1 Business Review The group operates as a leading general practitioner network in Singapore under the 'Dr. Tan & Partners' (DTAP) brand, offering diverse medical and aesthetic services, with revenue decreasing by 1.7% to SGD 9.6 million for the nine months ended September 30, 2020 - The Group is a leading general practitioner ("GP") network in Singapore, accredited by the Ministry of Health Singapore, operating under the name "Dr. Tan & Partners" or "DTAP"[29] - Services include sexual health, men's health, women's health, and aesthetic services[29] - For the nine months ended September 30, 2020, the Group's revenue decreased by approximately SGD 0.2 million or 1.7% to approximately SGD 9.6 million compared to the same period last year[29] - Revenue from consultation services, medical examination services, and treatment services accounted for approximately 9.7%, 25.6%, and 64.7% of total revenue for the period, respectively[29] 2.2 Outlook and Prospects Despite COVID-19 uncertainties and increased competition, the group plans to expand market share, enhance the DTAP brand, and strengthen its competitive edge in niche markets, operating 11 clinics as of the reporting date - The COVID-19 pandemic and circuit breaker measures led to a reduction in patients seeking niche services and intensified competition among physical and online peers[30] - The Group will continue to seek to expand its market share, enhance the DTAP brand and business, and build its reputation, particularly in the medical aesthetics, sexual health, and infectious disease niche markets[30] - As of the date of this report, the Group operates eight DTAP clinics, one S Aesthetics clinic, one vitiligo, psoriasis, and dermatology clinic, and one self-testing clinic, Dtap Express, totaling 11 clinics[31] 2.3 Financial Review The group's revenue for the nine months ended September 30, 2020, slightly declined due to COVID-19, but Q3 revenue significantly grew quarter-on-quarter; gross profit remained stable, yet increased employee benefits expenses led to a substantial net profit reduction, though the group achieved profitability in Q3 2.3.1 Revenue The group's clinic count increased from 7 to 10, with revenue for the nine months ended September 30, 2020, decreasing by 1.7% to SGD 9.6 million due to COVID-19, but Q3 revenue grew 92.7% to SGD 4.1 million, indicating economic recovery, with stable consultation revenue, reduced medical examination revenue, and increased treatment revenue - At the end of the period, the Group had ten clinics, compared to seven in the prior year period[32] - The Group's revenue decreased by approximately SGD 0.2 million or 1.7% from approximately SGD 9.8 million in the prior year period to approximately SGD 9.6 million in the current period, primarily due to the COVID-19 outbreak and circuit breaker measures[32] - For the three months ended September 30, 2020, the Group's revenue increased by SGD 2.0 million or 92.7% to approximately SGD 4.1 million compared to the three months ended June 30, 2020[32] - Revenue from consultation services decreased by approximately SGD 59,000 from approximately SGD 987,000 in the prior year period to approximately SGD 928,000 in the current period, showing no significant change due to a rapid shift to teleconsultations[32] - Revenue from medical examination services decreased by approximately SGD 0.5 million from SGD 3.0 million in the prior year period to approximately SGD 2.5 million in the current period, mainly due to restrictions on service types available during circuit breaker measures[33] - Revenue from treatment services increased by approximately SGD 0.4 million from approximately SGD 5.8 million in the prior year period to approximately SGD 6.2 million in the current period, attributed to the gradual resumption of economic and social activities in Singapore[34] 2.3.2 Gross Profit and Gross Profit Margin The group's gross profit slightly decreased, but its gross profit margin remained consistent with the prior year period - The Group's gross profit decreased by approximately SGD 0.1 million from approximately SGD 6.9 million in the prior year period to approximately SGD 6.8 million[35] - The Group's gross profit margin remained the same as the prior year period[35] 2.3.3 Employee Benefits Expenses Employee benefits expenses significantly increased, primarily due to the recruitment of new doctors, aestheticians, and clinic assistants - Employee benefits expenses increased by approximately SGD 0.8 million or 25.1% from approximately SGD 3.2 million in the prior year period to approximately SGD 4.0 million in the current period[36] - This increase was primarily attributable to the recruitment of new doctors, aestheticians, and clinic assistants[36] 2.3.4 Other Operating Expenses Changes in other operating expenses primarily resulted from the adoption of IFRS 16 Leases, reclassifying operating lease rentals as depreciation - Due to the adoption of IFRS 16 Leases, operating lease rentals for the Group's offices and clinics (classified as other operating expenses) have been reclassified as depreciation compared to the prior year period[37] 2.3.5 Profit for the Period Attributable to Owners of the Company The group recorded a profit of approximately SGD 0.3 million, a decrease of SGD 1.0 million from the prior year, mainly due to COVID-19 and increased employee benefits expenses; however, the group achieved profitability in Q3 FY2020 as Singapore's economic activities gradually resumed - The Group recorded a profit of approximately SGD 0.3 million for the period, a decrease of approximately SGD 1.0 million from the profit of approximately SGD 1.3 million in the prior year period[38] - The decrease in profit was primarily due to the COVID-19 outbreak, the implementation of circuit breaker measures, and increased employee benefits expenses[38] - The Group recorded a profit in the third quarter of FY2020 due to the gradual resumption of economic and social activities in Singapore[38] 2.4 Dividends The Board of Directors has resolved not to declare any dividend for the current period, consistent with the prior year period - The Board of Directors resolved not to declare any dividend for the period (prior year period: nil)[40] 2.5 Employees and Remuneration Policy As of September 30, 2020, the group had 58 full-time employees in Singapore, with remuneration packages including basic salary, discretionary bonuses, and various benefits - As of September 30, 2020, the Group had 58 full-time employees in Singapore (December 31, 2019: 51 employees)[41] - Employee remuneration packages generally include basic salary, discretionary bonuses, and benefits such as annual leave, sick leave, maternity leave, and childcare leave[41] 2.6 Liquidity, Financial Resources and Fundraising The group primarily funds operations through internally generated cash flow and shareholder contributions; as of September 30, 2020, cash and cash equivalents significantly increased to SGD 12.1 million, with no bank borrowings - The Group primarily funds its operations through internally generated cash flow and contributions from the Company's shareholders[42] - As of September 30, 2020, cash and cash equivalents were approximately SGD 12.1 million (December 31, 2019: SGD 5.9 million)[42] - The Group had no bank borrowings (December 31, 2019: nil)[42] 2.7 Gearing Ratio As of September 30, 2020, the group's gearing ratio decreased to 13.2%, with a reduction in lease liabilities, and expects to further strengthen liquidity through operating cash flow and share offer proceeds - As of September 30, 2020, the Group's gearing ratio was approximately 13.2% (December 31, 2019: 18.6%)[43] - As of September 30, 2020, the Group's lease liabilities were approximately SGD 1.7 million (December 31, 2019: SGD 2.5 million)[43] - The Group believes its liquidity position will be further strengthened through cash generated from operating activities and the net proceeds from the share offer[43] 2.8 Capital Structure The group's capital structure comprises share capital, retained earnings, share premium, and other reserves, remaining unchanged since its listing date - The Group's capital structure consists solely of share capital, retained earnings, share premium, and other reserves[44] - During the period, the Group's capital structure included equity attributable to owners of the Company of approximately SGD 13.5 million[44] - The Group's capital structure has remained unchanged since its listing date[44] 2.9 Future Material Investments and Plans for Capital Assets The group has no other material investments or plans for capital assets beyond those disclosed in this report - Save as disclosed in this report, the Group has no other material investments or plans for capital assets[45] 2.10 Material Investments or Material Acquisitions and Disposals During the period, the group did not undertake any material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the period, the Group did not have any material investments or material acquisitions and disposals of subsidiaries, associates, or joint ventures[46] 2.11 Commitments and Contingent Liabilities As of September 30, 2020, the group had no significant commitments or contingent liabilities - As of September 30, 2020, the Group had no significant commitments or contingent liabilities[47] 2.12 Treasury Policy Management will continue to prudently manage the group's cash balances and maintain strong liquidity to capitalize on future growth opportunities - Management will continue to follow a prudent policy in managing the Group's cash balances and maintaining strong and healthy liquidity to ensure the Group is prepared to seize future growth opportunities[48] 2.13 Foreign Exchange Risk The group primarily operates and transacts in Singapore Dollars but retains some Hong Kong Dollar-denominated proceeds from its share offer - The Group primarily operates and transacts in Singapore, with the Singapore Dollar being the main functional currency of the Group's operating subsidiaries[50] - The Group retains certain share offer proceeds denominated in Hong Kong Dollars for operational purposes[50] 2.14 Pledge of Assets As of September 30, 2020, none of the group's assets were pledged - As of September 30, 2020, none of the Group's assets were pledged[51] 2.15 Material Events After the Period As of the report date, there have been no material events affecting the group subsequent to the period end - Save as disclosed above, there have been no material events affecting the Group after September 30, 2020, and up to the date of this report[52] Corporate Governance and Other Information This section outlines the company's adherence to corporate governance standards, details directors' and major shareholders' interests, and confirms compliance with relevant regulations 3.1 Corporate Governance Practices The company is committed to maintaining high corporate governance standards and has complied with all applicable code provisions of the Corporate Governance Code in Appendix 15 of the GEM Listing Rules - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules during the period[54] 3.2 Directors' Securities Transactions The company has adopted a code of conduct for directors' securities transactions no less exacting than the GEM Listing Rules, and all directors confirmed full compliance during the period - The Company has adopted terms no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as its code of conduct regarding directors' securities transactions[55] - All Directors have confirmed their full compliance with the required standards set out in the required standard of dealings and the adopted code of conduct during the period[55] 3.3 Share Option Scheme The company has a share option scheme to attract, retain, and reward eligible individuals; however, no options have been granted, exercised, or cancelled under the scheme since its adoption date up to the report date - The Share Option Scheme was approved and adopted by shareholders on May 18, 2018, to attract, retain, and reward eligible persons[56] - No share options have been granted or agreed to be granted by the Company under the Share Option Scheme since its adoption date and up to the date of this report[56] - As of September 30, 2020, there were no outstanding share options[56] 3.4 Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of September 30, 2020, Dr. Tan Cher Sen, Chairman and Executive Director, held 75% of the company's issued shares through Cher Sen Holdings Limited, with no other disclosable interests or short positions for directors or chief executives Directors' and Chief Executive's Long Positions in Shares | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares/Underlying Shares Interested | Percentage of the Company's Issued Shares | | :--- | :--- | :--- | :--- | | Dr. Tan Cher Sen | Interest in controlled corporation | 390,000,000(L) | 75% | - Dr. Tan Cher Sen (Chairman and Executive Director) legally and beneficially owns all issued shares of Cher Sen Holdings Limited and is therefore deemed to be interested in all shares held by Cher Sen[58] Directors' and Chief Executive's Long Positions in Shares of Associated Corporations | Name of Director/Chief Executive | Name of Associated Corporation | Capacity/Nature of Interest | Number of Shares Held | Percentage of Interest | | :--- | :--- | :--- | :--- | :--- | | Dr. Tan | Cher Sen | Beneficial owner | 50,000 | 100% | 3.5 Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares As of September 30, 2020, Cher Sen Holdings Limited, wholly and beneficially owned by Dr. Tan Cher Sen, was the company's substantial shareholder, holding 75% of the shares, excluding directors and chief executives Substantial Shareholders' Long Positions in Shares | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held | Percentage of Interest | | :--- | :--- | :--- | :--- | | Cher Sen | Beneficial owner | 390,000,000(L) | 75% | - Cher Sen is a direct shareholder of the Company, 100% legally and beneficially owned by Dr. Tan[63] 3.6 Directors' and Controlling Shareholders' Interests in Competing Business During the period, no directors, controlling shareholders, or their close associates held any direct or indirect interests in businesses competing with the group, nor were there any other conflicts of interest - During the period, no Directors or controlling shareholders or their respective close associates had any business or interest in any business, other than the Group's business, which competes or is likely to compete, directly or indirectly, with the Group's business[64] - No other conflicts of interest existed or might exist between any such persons or entities and the Group[64] 3.7 Compliance Adviser's Interests in the Company As of September 30, 2020, the company's compliance adviser, Ascent Partners Financial Services Limited, and its directors, employees, or close associates had no notifiable interests in the company's or any group member's securities, other than the compliance agreement - As of September 30, 2020, the Company's compliance adviser, Ascent Partners Financial Services Limited, or its directors, employees, or close associates had no interests in the securities of the Company or any member of the Group that were required to be notified to the Company under Rule 6A.32 of the GEM Listing Rules, other than the compliance agreement[65] 3.8 Purchase, Sale or Redemption of the Company's Listed Securities During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of its listed securities - During the period, the Company did not redeem any of its listed securities, nor did the Company or any of its subsidiaries purchase or sell such securities[66] 3.9 Review by Audit Committee The Board's Audit Committee, comprising three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements and this report, confirming their preparation in compliance with applicable accounting standards, GEM Listing Rules, and other legal requirements, with sufficient disclosures - The Audit Committee consists of three independent non-executive Directors, with Mr. Lau Wai Hung as Chairman[68] - The Audit Committee has reviewed the unaudited condensed consolidated financial statements and this report and is of the opinion that they have been prepared in accordance with applicable accounting standards, the GEM Listing Rules, and other legal requirements, and that adequate disclosures have been made[68]