中国医疗网络(00383) - 2024 - 中期财报

Company Information The report provides essential corporate governance and operational details, including board composition, committee structures, and key service providers - The report provides basic corporate governance and operational information, including the composition of the company's board of directors, various committees (audit, nomination, remuneration), principal bankers, registered office, company secretary, auditor, and share registrar[7][8] Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the Group's total revenue increased by approximately 8% to HKD 822 million, with operating profit surging 85% to HKD 61.79 million, driven by higher gross profit and reduced administrative expenses, leading to a 5-fold increase in profit for the period to HKD 29.08 million and HKD 21.66 million attributable to owners of the company Condensed Consolidated Statement of Profit or Loss Summary | Metric | For the six months ended June 30, 2024 (HKD Thousands) | For the six months ended June 30, 2023 (HKD Thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 821,529 | 760,951 | +8.0% | | Gross Profit | 183,001 | 149,567 | +22.4% | | Operating Profit | 61,792 | 33,362 | +85.2% | | Finance Costs | (15,707) | (26,520) | -40.8% | | Profit Before Tax | 46,085 | 6,842 | +573.6% | | Profit for the Period | 29,081 | 4,604 | +531.6% | | Profit Attributable to Owners of the Company | 21,659 | 1,310 | +1553.4% | | Basic Earnings Per Share | 1.99 HK cents | 0.17 HK cents | +1070.6% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group reported total comprehensive income of HKD 29.08 million for the period, a significant turnaround from a HKD 16.87 million loss in the prior year, primarily due to the absence of substantial exchange differences loss this period Total Comprehensive Income Movement | Metric | For the six months ended June 30, 2024 (HKD Thousands) | For the six months ended June 30, 2023 (HKD Thousands) | | :--- | :--- | :--- | | Profit for the Period | 29,081 | 4,604 | | Exchange differences arising from translation of overseas operations | – | (21,478) | | Total Comprehensive Income for the Period | 29,081 | (16,874) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were approximately HKD 3.48 billion, largely stable compared to year-end 2023, while net assets slightly increased to HKD 1.89 billion, and notably, net current assets improved 43% from HKD 216 million to HKD 309 million, despite total borrowings rising from HKD 760 million to HKD 804 million Condensed Consolidated Statement of Financial Position Summary | Metric | June 30, 2024 (HKD Thousands) | December 31, 2023 (HKD Thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 2,175,673 | 2,175,485 | ~0% | | Current Assets | 1,305,644 | 1,360,768 | -4.1% | | Total Assets | 3,481,317 | 3,536,253 | -1.6% | | Current Liabilities | 996,215 | 1,144,872 | -13.0% | | Non-current Liabilities | 595,236 | 519,736 | +14.5% | | Total Liabilities | 1,591,451 | 1,664,608 | -4.4% | | Net Assets | 1,889,866 | 1,871,645 | +1.0% | | Total Equity | 1,889,866 | 1,871,645 | +1.0% | Condensed Consolidated Statement of Cash Flows For the period, the Group's cash and cash equivalents decreased by HKD 59.55 million, with net cash outflow from operating activities of HKD 11.67 million contrasting with a HKD 118 million inflow last year, while investing activities resulted in a HKD 71.05 million outflow mainly for property, plant, and equipment additions, and financing activities generated a HKD 23.18 million inflow Condensed Consolidated Statement of Cash Flows Summary | Metric | For the six months ended June 30, 2024 (HKD Thousands) | For the six months ended June 30, 2023 (HKD Thousands) | | :--- | :--- | :--- | | Net cash from operating activities | (11,672) | 118,120 | | Net cash used in investing activities | (71,049) | (52,731) | | Net cash from financing activities | 23,176 | 162,633 | | Net decrease in cash and cash equivalents | (59,545) | 228,022 | | Cash and cash equivalents at beginning of period | 890,266 | 589,050 | | Cash and cash equivalents at end of period | 830,721 | 822,019 | Notes to the Financial Statements Changes in Accounting Policies The Group changed its accounting policy for land and buildings from revaluation to cost model, aligning with its holding company and industry practice, with retrospective application and restatement of 2023 comparative figures impacting various financial metrics including cost of goods and services, operating profit, profit for the period, and earnings per share - The Group changed the measurement method for land and buildings from fair value revaluation model to cost model, with retrospective adjustment for this accounting policy change[23] - This change resulted in the restatement of 2023 comparative operating profit from HKD 29.32 million to HKD 33.36 million, and profit for the period from HKD 0.56 million to HKD 4.60 million[24] Revenue Analysis The Group's total revenue primarily derives from contracts with customers, with hospital fees and charges being the largest source, accounting for over 97%, and the healthcare segment contributing the vast majority of revenue, all generated in China 2024 H1 Revenue Composition (HKD Thousands) | Revenue Source | Amount | Percentage | | :--- | :--- | :--- | | Hospital fees and charges | 800,390 | 97.4% | | Elderly care related services and sales of nutritional products | 17,789 | 2.2% | | Rental income | 3,350 | 0.4% | | Total | 821,529 | 100% | Revenue from Contracts with Customers by Business Segment (HKD Thousands) | Business Segment | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Healthcare | 800,390 | 733,887 | | Elderly Care | 17,789 | 22,445 | | Property Development | – | 130 | | Total | 818,179 | 756,462 | Segment Information The healthcare segment is the Group's core, contributing HKD 800 million in revenue and HKD 82.25 million in segment profit, while elderly care, property development, and property investment segments all reported losses, with healthcare also accounting for the majority of the Group's assets and liabilities 2024 H1 Segment Performance (HKD Thousands) | Segment | Revenue | Segment Profit/(Loss) | | :--- | :--- | :--- | | Healthcare | 800,390 | 82,250 | | Elderly Care | 18,942 | (25,735) | | Property Development | – | (4,210) | | Property Investment | 2,197 | (16,096) | | Financial Services | – | (13) | | Securities Trading and Investment | – | (363) | Earnings Per Share Basic earnings per share for the period significantly increased to 1.99 HK cents from 0.17 HK cents (restated) in the prior year, primarily driven by a substantial rise in profit attributable to owners of the company, with no diluted earnings per share presented due to the absence of potential dilutive shares Basic Earnings Per Share Calculation | Metric | 2024 H1 | 2023 H1 (Restated) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HKD Thousands) | 21,659 | 1,310 | | Weighted average number of ordinary shares (Shares) | 1,086,005,457 | 758,959,038 | | Basic Earnings Per Share | 1.99 HK cents | 0.17 HK cents | Borrowings As of June 30, 2024, the Group's total borrowings increased to HKD 804 million from HKD 760 million at year-end 2023, with a notable rise in unsecured term loans, and approximately 35% of borrowings maturing within one year and 54% over two years Borrowings Composition and Repayment Schedule (HKD Thousands) | Type of Borrowing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Secured bank borrowings | 62,516 | 82,930 | | Unsecured bank borrowings | 366,923 | 355,692 | | Unsecured term loans | 374,725 | 321,428 | | Total Borrowings | 804,164 | 760,050 | | Repayment Period | | | | Within one year | 278,046 | 312,561 | | Over one year but within two years | 94,563 | 122,587 | | Over two years but within five years | 431,555 | 324,902 | Litigation The Group's indirect wholly-owned subsidiary, Tongren Medical Industry Group Co., Ltd., received a writ of summons in July 2024 concerning a claim of approximately RMB 143 million, which the company, based on Chinese legal advice, believes to be without legal merit and not expected to materially impact the Group's operations or financial position - Subsidiary Tongren Medical faces a claim lawsuit of approximately RMB 143 million[84] - Company management, based on legal advice, believes the lawsuit will have no material impact on the Group's operations or financial position[84] Auditor's Review Report The auditor, BDO Limited, has reviewed the interim condensed consolidated financial statements and issued a standard unqualified review conclusion - BDO Limited, the auditor, has reviewed the interim condensed consolidated financial statements[85] - The review concluded that the auditor found no matters indicating the interim financial information was not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting," representing a standard unqualified review conclusion[88] Management Discussion and Analysis Financial Performance Review In H1 2024, the Group's total revenue grew 7.47% to HKD 822 million, with profit attributable to owners surging 15.5 times to HKD 21.66 million, primarily driven by increased healthcare segment revenue, lower medical consumables and finance costs, partially offset by higher pharmaceutical costs and fair value losses on investment properties, resulting in basic earnings per share of 1.99 HK cents - Profit attributable to owners increased 15.5 times year-on-year, primarily driven by: - Increased operating revenue in the healthcare segment following the relaxation of COVID-19 controls in China - Reduced medical consumables costs - Increased bank deposit interest income - Decreased finance costs for borrowings in China[89] Key Financial Indicators | Metric | 2024 H1 | 2023 H1 (Restated) | | :--- | :--- | :--- | | Total Revenue | HKD 822 million | HKD 764 million | | Profit Attributable to Owners | HKD 21.66 million | HKD 1.31 million | | Basic Earnings Per Share | 1.99 HK cents | 0.17 HK cents | Business Review The Group primarily engages in healthcare, elderly care, property investment and development, securities investment, and financial services, with the healthcare segment showing strong performance as the main growth engine, while the elderly care segment faced intensified competition, and property and investment-related businesses performed weakly Healthcare Segment The healthcare segment's revenue grew to HKD 800 million and profit rose to HKD 82.25 million, with Nanjing and Kunming hospitals making progress in research, specialty development, and market expansion despite DRGs payment reform challenges, and Kunming Hospital Phase II main construction completed, laying a foundation for future growth Healthcare Segment Financial Performance (HKD Thousands) | Metric | 2024 H1 | 2023 H1 (Restated) | | :--- | :--- | :--- | | Revenue | 800,390 | 733,887 | | Profit | 82,250 | 34,638 | | EBITDA | 137,731 | 95,033 | - The main construction of Kunming Hospital Phase II (including the comprehensive inpatient building, oncology and nuclear medicine building, and rehabilitation medicine building) has been completed, and preparations for interior decoration tendering have begun[97] Elderly Care Segment The elderly care segment's revenue fell to HKD 18.94 million and loss expanded to HKD 25.74 million, primarily due to property sales no longer being a main driver and increased competition leading to member attrition in community operations, with the segment now focusing on stable operations and efficiency improvement Elderly Care Segment Financial Performance (HKD Thousands) | Metric | 2024 H1 | 2023 H1 (Restated) | | :--- | :--- | :--- | | Revenue | 18,942 | 22,952 | | Loss | (25,735) | (17,969) | Property Development and Investment The property development segment reported no revenue and a HKD 4.21 million loss for the period, while the property investment segment had HKD 2.20 million in rental income but a HKD 9.13 million fair value loss on investment properties, resulting in a HKD 6.10 million loss Property-Related Segment Financial Performance (HKD Thousands) | Segment | Revenue | Profit/(Loss) | | :--- | :--- | :--- | | Property Development | – | (4,210) | | Property Investment | 2,197 | (6,096) | Securities Trading and Investment The securities trading and investment business generated no revenue and incurred a HKD 0.363 million loss for the period, primarily from fair value losses on investments held for trading, with the portfolio's carrying value at period-end being HKD 6.30 million, mainly invested in Hong Kong-listed companies in the property and construction sectors Investments Held for Trading Portfolio (HKD Thousands) | Item | June 30, 2024 Carrying Value | | :--- | :--- | | By Region | | | Hong Kong | 4,579 | | Australia | 1,278 | | Philippines | 441 | | By Industry | | | Property and Construction | 5,304 | | Other | 994 | | Total | 6,298 | Financial Resources and Risk Management As of June 30, 2024, the Group's gearing ratio (net borrowings/total equity) was approximately -2.4%, indicating a net cash position and sound financial health, with total borrowings of HKD 804 million, and the Group will closely monitor foreign exchange risk as assets, liabilities, and transactions are primarily denominated in HKD and RMB Financial Position Summary | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Borrowings | HKD 804 million | HKD 760 million | | Gearing Ratio | -2.4% | -8.7% | | Total Assets Pledged | HKD 626 million | HKD 670 million | - Net proceeds of approximately HKD 309 million from the rights issue in June 2023, earmarked for Kunming Hospital Phase II development, remained unutilized as of the reporting period end[114] Outlook Facing a challenging macro environment, the Group will adopt a cautious approach, focusing on "cost control, energy saving, development, and efficiency enhancement," with the healthcare segment promoting specialized disciplines for new growth drivers, the elderly care segment exploring integrated medical-elderly care models and smart health platforms, and the Group continuously reviewing and adjusting business and investment strategies to create shareholder value - Healthcare Segment Outlook: - Strengthen process control and enhance operational efficiency to cope with external impacts - Introduce experts to develop specialized disciplines and disease centers (e.g., endoscopy centers, oncology departments) - Develop high-end medical services to create new business growth engines[122][123] - Elderly Care Segment Outlook: - Build a smart health and elderly care big data platform and medical-elderly care supply chain - Explore integrated medical-elderly care business models and engage in businesses like senior universities to cultivate potential clients - Enhance marketing and operational efficiency of nursing hospitals, focusing on dementia care specialties[124][125] - Overall Strategy: - The Group plans to adopt a cautious approach in a challenging business environment - Closely review and adjust business and investment strategies to adapt to the economic landscape and create higher value for shareholders[126] Directors' and Shareholders' Interests Directors' and Major Shareholders' Interests The report details the shareholdings of directors and major shareholders, with Mr. Li Cheng Hui deemed to hold 51.20% of the company's shares through his interest in the ultimate holding company, United Asia Finance Limited, and other major shareholders including Tsinghua Tongfang Co., Ltd. (18.42%), China Minsheng Investment Corp., Ltd. (9.21%), and Ms. Chong Shun Yee (8.98%) Major Shareholders' Shareholding (as of June 30, 2024) | Shareholder Name | Capacity/Relationship | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Li Cheng Hui | Held by controlled corporations (through United Asia Finance and Tian An) | 556,097,010 | 51.20% | | Tsinghua Tongfang Co., Ltd. | Held by controlled corporations | 200,000,000 | 18.42% | | China Minsheng Investment Corp., Ltd. | Held by controlled corporations | 100,000,000 | 9.21% | | Ms. Chong Shun Yee | Held by controlled corporations | 97,514,540 | 8.98% | Corporate Governance and Other Information The company complied with the Listing Rules' Corporate Governance Code during the reporting period, with the audit committee reviewing the interim report and no share buybacks, sales, or redemptions occurring - The company complied with the Corporate Governance Code in the Listing Rules during the reporting period[136] - The Audit Committee has reviewed this interim report and the unaudited condensed consolidated interim financial statements[139] - During the reporting period, neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's shares[140]