瑞慈医疗(01526) - 2025 - 中期业绩

Financial Summary Financial Performance Highlights Revenue decreased 7.0% to RMB 1,144.8 million for the six months ended June 30, 2025, with profit attributable to owners declining and no interim dividend declared Key Financial Data for the Six Months Ended June 30, 2025 (RMB million) | Indicator | 2025 | 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 1,144.8 | 1,231.2 | -7.0% | | Gross Profit | 407.6 | 396.3 | +2.8% | | Profit Attributable to Owners of the Company | 55.9 | 85.0 | -34.2% | | Adjusted EBITDA | 386.6 | 408.8 | -5.4% | - The Board has resolved not to declare any interim dividend for the reporting period[4] Interim Condensed Consolidated Financial Statements Consolidated Statement of Financial Position As of June 30, 2025, total assets were RMB 4,716.8 million, total liabilities RMB 3,299.9 million, and equity attributable to owners RMB 1,400.8 million Summary of Consolidated Statement of Financial Position as of June 30, 2025 (RMB thousand) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 3,139,527 | 3,191,336 | | Current assets | 1,577,257 | 1,667,165 | | Total Assets | 4,716,784 | 4,858,501 | | Equity | | | | Equity attributable to owners of the Company | 1,400,784 | 1,345,843 | | Non-controlling interests | 16,109 | 29,300 | | Total Equity | 1,416,893 | 1,375,143 | | Liabilities | | | | Non-current liabilities | 1,456,419 | 1,492,846 | | Current liabilities | 1,843,472 | 1,990,512 | | Total Liabilities | 3,299,891 | 3,483,358 | | Total Equity and Liabilities | 4,716,784 | 4,858,501 | Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, revenue was RMB 1,144.8 million, gross profit RMB 407.6 million, and profit for the period RMB 79.7 million Summary of Consolidated Statement of Profit or Loss for the Six Months Ended June 30, 2025 (RMB thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 1,144,849 | 1,231,205 | | Cost of sales | (737,259) | (834,918) | | Gross Profit | 407,590 | 396,287 | | Operating profit | 168,959 | 185,697 | | Profit before income tax | 119,441 | 125,148 | | Income tax expense | (39,696) | (38,027) | | Profit for the period | 79,745 | 87,121 | | Profit attributable to owners of the Company | 55,941 | 84,991 | | Profit attributable to non-controlling interests | 23,804 | 2,130 | | Basic and diluted earnings per share | RMB 0.04 | RMB 0.05 | Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, total comprehensive income was RMB 78.7 million, with RMB 54.9 million attributable to owners Summary of Consolidated Statement of Comprehensive Income for the Six Months Ended June 30, 2025 (RMB thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period | 79,745 | 87,121 | | Items that will not be reclassified subsequently to profit or loss | | | | — Fair value changes of financial assets at fair value through other comprehensive income | (1,000) | 600 | | Total comprehensive income for the period | 78,745 | 87,721 | | Total comprehensive income attributable to owners of the Company | 54,941 | 85,591 | | Total comprehensive income attributable to non-controlling interests | 23,804 | 2,130 | Notes to the Financial Statements General Information and Basis of Preparation The company provides integrated hospital and physical examination services in China, preparing interim financials under HKAS 34, with the going concern assumption deemed appropriate despite current liabilities exceeding current assets - The Group's business scope primarily involves providing integrated hospital services and physical examination services in China[11] - These interim condensed consolidated financial information have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[13] - Despite current liabilities exceeding current assets by RMB 266.2 million as of June 30, 2025, the Board considers the going concern basis appropriate due to confidence in future operating cash flows and the renewability of bank facilities[14] Accounting Policies HKAS 21 (Revised) — Lack of Exchangeability was adopted in this period with no material impact, and new/revised standards not yet adopted are also listed - Hong Kong Accounting Standard 21 (Revised) — Lack of Exchangeability has been adopted, with no impact on amounts recognized in prior years and no material impact expected on current or future reporting periods[16] New and Revised Standards and Interpretations Not Yet Adopted | Standard | Description | Effective Date | | :--- | :--- | :--- | | HKFRS 9 and HKFRS 7 (Amendments) | Amendments to Classification and Measurement of Financial Instruments | January 1, 2026 | | HKFRS 18 | Presentation and Disclosure in Financial Statements | January 1, 2027 | | IFRS 19 | Disclosures for Non-Publicly Accountable Subsidiaries | January 1, 2027 | | HKFRS 10 and HKAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | Segment Information The Group manages its business through two operating segments: integrated hospitals and physical examination centers, with major assets located in China, showing a decline in integrated hospital revenue and profit - The Group manages its business by two operating segments based on its services: integrated hospitals and physical examination centers[20] - The Group's principal assets are all located in Mainland China, thus no geographical segment analysis is presented[20] Segment Results for the Six Months Ended June 30, 2025 (RMB thousand) | Indicator | Integrated Hospitals | Physical Examination Centers | Total | | :--- | :--- | :--- | :--- | | Revenue | 234,004 | 925,129 | 1,144,849 | | Segment Profit | 33,258 | 241,539 | 273,119 | | Segment Assets (June 30, 2025) | 1,285,877 | 4,168,976 | 4,716,784 | | Segment Liabilities (June 30, 2025) | 590,167 | 3,065,492 | 3,299,891 | | Additions to Property and Equipment, Right-of-Use Assets and Intangible Assets | 13,969 | 161,118 | 175,087 | | Depreciation and Amortization | 24,740 | 186,646 | 211,436 | Segment Results for the Six Months Ended June 30, 2024 (RMB thousand) | Indicator | Integrated Hospitals | Physical Examination Centers | Total | | :--- | :--- | :--- | :--- | | Revenue | 323,966 | 922,936 | 1,231,205 | | Segment Profit | 72,356 | 215,616 | 287,673 | | Additions to Property and Equipment, Right-of-Use Assets and Intangible Assets | 37,419 | 284,359 | 321,778 | | Depreciation and Amortization | 24,255 | 192,251 | 216,506 | Key Assets and Liabilities This section details the composition and changes in the company's key assets and liabilities, including right-of-use assets, deferred tax assets, trade receivables, cash and bank balances, prepayments, share capital, borrowings, lease liabilities, contract liabilities, and trade and other payables Right-of-Use Assets As of June 30, 2025, the net book value of right-of-use assets was RMB 1,260.8 million, a decrease from December 31, 2024, primarily comprising properties and land use rights Net Book Value of Right-of-Use Assets (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Properties | 1,258,170 | 1,294,849 | | Land use rights | 2,648 | 2,698 | | Total | 1,260,818 | 1,297,547 | - Land use rights with a total carrying amount of RMB 2,648 thousand as of June 30, 2025, were pledged for the Group's borrowings[31] Deferred Tax Assets As of June 30, 2025, total deferred tax assets amounted to RMB 143.6 million, mainly arising from tax losses, right-of-use assets, and lease liabilities Composition of Deferred Tax Assets (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tax losses | 66,886 | 37,005 | | Right-of-use assets and lease liabilities | 47,794 | 45,401 | | Share option scheme | 21,882 | 24,279 | | Loss allowance for financial assets | 4,885 | 8,248 | | Impairment of property and equipment | 2,188 | 3,303 | | Total Deferred Tax Assets | 143,635 | 118,236 | Trade Receivables As of June 30, 2025, net trade receivables were RMB 244.8 million, a significant decrease from year-end 2024, with the majority due within six months Trade Receivables (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross trade receivables | 262,714 | 357,264 | | Less: Loss allowance | (17,898) | (33,200) | | Net amount | 244,816 | 324,064 | Ageing Analysis of Trade Receivables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 6 months | 235,080 | 341,458 | | 6 months to 1 year | 17,694 | 8,079 | | 1 to 2 years | 2,984 | 2,911 | | 2 to 3 years | 2,669 | 646 | | Over 3 years | 4,287 | 4,170 | | Total | 262,714 | 357,264 | Cash and Bank Balances As of June 30, 2025, cash and cash equivalents totaled RMB 1,028.8 million, primarily denominated in RMB, with restricted cash for natural gas heating service deposits and bank guarantees Cash and Cash Equivalents (RMB thousand) | Currency | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | RMB | 1,023,961 | 1,103,627 | | USD | 1,724 | 1,963 | | HKD | 3,159 | 4,227 | | Total | 1,028,844 | 1,109,817 | - Restricted cash includes RMB 938 thousand for natural gas heating service deposits and RMB 1,099 thousand for bank guarantee letters[37] Prepayments As of June 30, 2025, total prepayments were RMB 66.4 million, mainly for property and equipment, consumables, and other prepaid expenses Prepayments (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current: Prepayments for property and equipment | 35,637 | 25,030 | | Current: Prepayments for consumables | 13,699 | 13,840 | | Current: Others | 17,022 | 16,209 | | Total Prepayments | 66,358 | 55,079 | - Other prepayments primarily include prepaid advertising expenses and prepaid property management fees[39] Share Capital As of June 30, 2025, and December 31, 2024, issued ordinary share capital remained unchanged at RMB 1,065 thousand, with the number of shares constant Ordinary Shares, Issued and Fully Paid | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of ordinary shares | 1,590,324,000 | 1,590,324,000 | | Share capital (RMB thousand) | 1,065 | 1,065 | Borrowings As of June 30, 2025, total bank borrowings were RMB 770.8 million, all secured and/or guaranteed, and denominated in RMB Bank Borrowings (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank borrowings — secured and/or guaranteed | 770,800 | 797,000 | | Less: Non-current portion of non-current borrowings | (240,400) | (254,600) | | Current borrowings | 530,400 | 542,400 | - All borrowings are denominated in RMB, and their fair value approximates their carrying amount[40] Lease Liabilities As of June 30, 2025, the present value of lease liabilities was RMB 1,474.9 million, with RMB 264.4 million due within one year Present Value of Minimum Lease Payments (RMB thousand) | Term | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 264,433 | 272,308 | | After one year but within two years | 244,247 | 252,859 | | After two years but within five years | 523,028 | 547,076 | | After five years | 443,153 | 431,035 | | Total | 1,474,861 | 1,503,278 | Contract Liabilities As of June 30, 2025, total contract liabilities were RMB 630.5 million, primarily from sales of physical examination cards, prepayments from physical examination customers, and hospital patients Contract Liabilities (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Sales of physical examination cards | 581,547 | 559,060 | | Prepayments from physical examination customers | 39,916 | 64,298 | | Prepayments from hospital patients | 9,059 | 7,257 | | Total | 630,522 | 630,615 | Trade and Other Payables As of June 30, 2025, total trade and other payables were RMB 385.9 million, a significant decrease from year-end 2024, with trade payables to third parties being the largest component Trade and Other Payables (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables to third parties | 145,681 | 162,299 | | Payables for purchase of property and equipment | 81,672 | 111,248 | | Accrued staff salaries and benefits | 69,287 | 129,427 | | Deposits received | 24,698 | 19,082 | | Total | 385,868 | 495,179 | Ageing Analysis of Trade Payables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 120,841 | 141,205 | | 3 to 6 months | 5,110 | 3,413 | | 6 months to 1 year | 5,957 | 3,953 | | 1 to 2 years | 4,593 | 3,887 | | 2 to 3 years | 1,118 | 979 | | Over 3 years | 8,062 | 8,862 | | Total | 145,681 | 162,299 | - Trade payables are generally settled within 30 to 60 days after recognition[43] Revenue and Expense Details This section details the composition of the company's revenue and major expenses, reflecting its cost structure and profitability in operating activities Revenue Composition For the six months ended June 30, 2025, total revenue was RMB 1,144.8 million, with physical examination services contributing the most, while integrated hospital service revenues declined across all categories Revenue Composition (RMB thousand) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Integrated Hospitals | | | | Outpatient drug revenue | 21,834 | 33,035 | | Outpatient service revenue | 27,988 | 34,607 | | Inpatient drug revenue | 62,365 | 104,406 | | Inpatient service revenue | 107,533 | 136,221 | | Physical Examination Centers | | | | Physical examination service revenue | 924,923 | 922,445 | | Management service revenue and others | 206 | 491 | | Total | 1,144,849 | 1,231,205 | Cost of Sales and Expenses For the six months ended June 30, 2025, total expenses were RMB 991.0 million, with employee benefit expenses, depreciation and amortization, drug costs, and medical consumables being the main components Major Expenses (RMB thousand) | Expense Item | 2025 | 2024 | | :--- | :--- | :--- | | Employee benefit expenses | 469,101 | 501,699 | | Depreciation and amortization | 211,436 | 216,506 | | Drug costs | 55,549 | 92,307 | | Medical consumables costs | 51,788 | 50,827 | | Outsourcing testing expenses | 49,140 | 61,058 | | Utility expenses | 45,512 | 44,441 | | Platform service fees | 29,612 | 23,846 | | Advertising expenses | 11,505 | 4,576 | | Impairment loss on financial assets/(reversal of impairment loss) | 2,543 | (1,871) | | Total | 991,013 | 1,053,454 | Finance Costs and Income For the six months ended June 30, 2025, net finance costs were RMB 50.1 million, primarily comprising interest on lease liabilities and borrowings, partially offset by interest income Net Finance Costs (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on lease liabilities | 42,168 | 47,636 | | Interest on borrowings | 11,071 | 15,897 | | Net exchange loss | 61 | 522 | | Finance costs | 53,300 | 64,055 | | Less: Interest income | (3,214) | (3,089) | | Net Finance Costs | 50,086 | 60,966 | Income Tax Expense For the six months ended June 30, 2025, income tax expense was RMB 39.7 million, mainly consisting of current and deferred income tax Income Tax Expense (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current income tax — current period | 46,692 | 48,203 | | Current income tax — under-provision in prior years | 18,403 | 4,854 | | Deferred income tax | (25,399) | (15,030) | | Income Tax Expense | 39,696 | 38,027 | - The applicable corporate income tax rate for the Group's subsidiaries in Mainland China is generally 25%, with some subsidiaries enjoying a 15% preferential rate[48] Earnings Per Share and Dividends For the six months ended June 30, 2025, basic earnings per share were RMB 0.04, and the Board resolved not to declare an interim dividend Earnings Per Share For the six months ended June 30, 2025, basic earnings per share were RMB 0.04, a decrease from RMB 0.05 in the prior year, with no dilutive effect due to option exercise prices Earnings Per Share | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 55,941 | 84,991 | | Weighted average number of ordinary shares in issue | 1,590,324,000 | 1,590,324,000 | | Basic Earnings Per Share (RMB) | 0.04 | 0.05 | - For the six months ended June 30, 2025 and 2024, there was no dilutive effect as the average market price of the Company's shares was lower than the assumed exercise price of the share option arrangements[52] Dividends The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: HKD 0.045 per share)[53] Business Overview and Strategic Outlook Industry Overview China's healthcare industry is transforming, driven by policy and technology, showing multi-level development, increased competition, and innovative models, with AI widely applied and the health check-up market expanding - Policy level: Deepening medical service price reform, promoting equitable grassroots healthcare and upgrading public health services, and achieving universal access to medical technology through expanded medical insurance catalogs and centralized procurement of medical devices[54] - Technology level: Artificial intelligence is deeply integrated with medical scenarios, with AI-assisted diagnosis achieving breakthrough progress in imaging, and 92.6% of national Grade III Class A hospitals having adopted AI technology by 2024[54] - Physical examination industry: The market size is expanding year by year, with the health check-up market expected to approach RMB 380 billion by 2025, primarily driven by an increase in average customer spending[55] Integrated Hospital Business Nantong Ruici Hospital, a Grade III Class B general hospital, partnered with Shanghai Oriental Hospital to enhance management and medical services, though outpatient and inpatient visits declined during the period - Nantong Ruici Hospital: A large comprehensive hospital integrating medical treatment, teaching, and research, currently a Grade III Class B general hospital and a designated medical insurance unit[57] - Strategic cooperation: Signed a strategic cooperation agreement with Shanghai Oriental Hospital to establish "Shanghai Oriental Hospital Nantong Ruici Hospital," aiming to export top medical technology, management models, and brand influence[57] Nantong Ruici Hospital Service Visits | Service Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Outpatient service visits | 142,777 | 161,604 | -11.65% | | Inpatient service visits | 12,456 | 15,760 | -20.96% | - Ruici Meidi Nursing Home: As of June 30, 2025, 89 elderly residents were admitted, with an occupancy rate of 84%[58] Physical Examination Business The Group's physical examination business launched a multi-brand strategy, including the high-end "Ruici Club" brand, focusing on key markets and enhancing customer experience and medical quality through satisfaction management and professional development - Multi-brand strategy: Initiated a multi-brand strategy, creating the high-end health check-up brand "Ruici Club" targeting corporate executives, elite white-collar workers, and high-net-worth families[59] - Market layout: Focusing on key markets in the Yangtze River Delta, Beijing, Greater Bay Area, and Zhejiang, while expanding into new first-tier and second-tier cities[59] - Number of centers: As of June 30, 2025, the Group operates 86 physical examination centers nationwide, with 76 already operational, covering 29 cities[59] - Service quality improvement: Deepening the closed-loop satisfaction management mechanism, achieving an improvement rate of 93.13% ("Ruici Physical Examination" brand) / 95.00% ("Xingyuanhui" brand)[60] - Medical quality control: Launching professional capability building projects "Leading Action" and "Assisted Training Action" to establish a quality management and control system and standardized service processes[60][61] Future Outlook Facing an aging population and younger disease trends, the company will deepen hospital performance reform, with Nantong Ruici Hospital aiming for Grade III Class A status, while the physical examination business will pursue a multi-brand strategy, product upgrades, operational optimization, and talent development - Nantong Ruici Hospital goal: Aims to become a Grade III Class A general hospital and one of the three major medical centers in Nantong City[62] - Hospital development strategy: Plans to establish 2 provincial-level clinical key specialties and 10 municipal-level clinical key specialties within the next 5 years, focusing on management system reform and leveraging the strategic cooperation with Shanghai Oriental Hospital[62] - Physical examination business strategy: Will continue to implement a multi-brand synergistic strategy with "Ruici Physical Examination," "Ruici Club," and "Xingyuanhui," focusing on product iteration and upgrading, and developing post-examination medical services and derivative products[63] - Operations and talent: Continuously optimize operational management processes to improve capacity utilization; enhance online channel traffic conversion rates; and strengthen talent selection and development to build a reserve of young management cadres[63] Financial Review Overall Financial Performance During the reporting period, the Group's revenue decreased by 7.0% year-on-year to RMB 1,144.8 million, primarily due to a decline in integrated hospital business revenue, while physical examination business revenue saw slight growth - Total revenue: The Group's revenue for the reporting period was RMB 1,144.8 million, a 7.0% decrease compared to the same period in 2024[65] - Integrated hospital business revenue: RMB 219.7 million, a 28.7% decrease from the same period in 2024, mainly due to external competitive pressure[65] - Physical examination business revenue: RMB 925.1 million, a 0.2% increase from the same period in 2024, primarily driven by revenue growth from the high-end physical examination brand "Xingyuanhui"[66] Revenue and Cost Analysis Total revenue decreased by 7.0% and cost of sales by 11.7% during the period, with both integrated hospital business revenue and cost of sales declining, while physical examination business cost of sales decreased due to efficiency and cost reduction strategies Revenue by Operating Segment (RMB thousand) | Segment | 2025 | 2024 | Percentage Change | | :--- | :--- | :--- | :--- | | Integrated Hospital Business | 234,004 | 323,966 | (27.8%) | | Physical Examination Business | 925,129 | 922,936 | 0.2% | | Inter-segment | (14,284) | (15,697) | (9.0%) | | Total | 1,144,849 | 1,231,205 | (7.0%) | Cost of Sales by Operating Segment (RMB thousand) | Segment | 2025 | 2024 | Percentage Change | | :--- | :--- | :--- | :--- | | Integrated Hospital Business | 201,037 | 250,714 | (19.8%) | | Physical Examination Business | 550,506 | 599,901 | (8.2%) | | Inter-segment | (14,284) | (15,697) | (9.0%) | | Total | 737,259 | 834,918 | (11.7%) | - The cost of sales for the physical examination business decreased by 8.2%, mainly due to the Group's vigorous implementation of efficiency and cost reduction strategies, effectively controlling cost of sales[68] Gross Profit and Operating Expenses Gross profit increased to RMB 407.6 million, with a 3.4 percentage point rise in gross profit margin to 35.6% due to efficiency and cost reduction, while distribution and selling expenses, administrative expenses, and other losses increased, and other income primarily came from government grants - Gross profit: Increased from RMB 396.3 million in the same period of 2024 to RMB 407.6 million in the reporting period[69] - Gross profit margin: Increased by 3.4 percentage points from 32.2% in the same period of 2024 to 35.6% in the reporting period, primarily due to the Group's continuous promotion of efficiency and cost reduction initiatives[69] - Distribution and selling expenses: RMB 134.5 million, an increase from RMB 108.6 million in the same period of 2024, mainly due to increased human resources costs and promotion expenses for the physical examination business[70] - Administrative expenses: RMB 116.7 million, a slight increase from RMB 111.8 million in the same period of 2024, mainly due to the increase in the number of physical examination centers[71] - Other income: RMB 21.0 million (2024: RMB 9.9 million), primarily from government grants[72] - Other losses: RMB 5.9 million (2024: RMB 1.9 million), mainly due to liquidated damages from early termination of a physical examination center lease[73] - Net finance costs: RMB 50.1 million (2024: RMB 61.0 million), primarily comprising interest expenses of approximately RMB 53.2 million and interest income of RMB 3.2 million[74] - Share of results of investments accounted for using the equity method: Profit of RMB 0.6 million (2024: RMB 0.4 million), mainly due to operating profit from the joint venture Nantong Meidi[75] - Income tax expense: RMB 39.7 million (2024: RMB 38.0 million)[76] - Profit for the period: RMB 79.7 million (2024: RMB 87.1 million)[77] Other Financial Indicators This section covers changes and influencing factors for key financial indicators such as Adjusted EBITDA, assets and liabilities, liquidity, capital expenditure, pledged assets, and gearing ratio Adjusted EBITDA Adjusted EBITDA for the reporting period was RMB 386.6 million, a 5.4% year-on-year decrease, primarily due to lower integrated hospital business revenue, though the adjusted EBITDA margin slightly improved Adjusted EBITDA Calculation (RMB thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period | 79,745 | 87,121 | | Income tax expense | 39,696 | 38,027 | | Net finance costs | 50,086 | 60,966 | | Depreciation and amortization | 211,436 | 216,506 | | Pre-operating expenses and EBITDA loss from trial operations | 5,636 | 6,164 | | Adjusted EBITDA | 386,599 | 408,784 | | Adjusted EBITDA margin | 33.8% | 33.2% | - Adjusted EBITDA decreased by 5.4%, mainly due to a slight decline in profit resulting from lower integrated hospital business revenue[80] Assets, Liabilities and Liquidity As of June 30, 2025, property and equipment and trade receivables both decreased, net current liabilities reduced, and the company maintained sufficient cash and cash equivalents and available bank facilities - Property and equipment: RMB 1,435.8 million, a decrease of RMB 56.1 million from December 31, 2024[82] - Trade receivables: RMB 244.8 million, a decrease of RMB 79.3 million from December 31, 2024[83] - Net current liabilities: RMB 266.2 million, a decrease from RMB 323.3 million as of December 31, 2024, mainly due to a reduction in borrowings at the end of the reporting period[84] - Cash and cash equivalents: RMB 1,028.8 million (December 31, 2024: RMB 1,109.8 million)[85] - Available bank facilities: RMB 382.2 million (December 31, 2024: RMB 163.0 million)[85] Capital Expenditure and Commitments Capital expenditure for the reporting period was RMB 175.1 million, mainly for physical examination center equipment, decoration, and new operating premises leases, with total capital commitments of RMB 13.4 million - Capital expenditure: RMB 175.1 million (2024: RMB 321.8 million), primarily for purchasing medical equipment, decoration, and leasing new operating premises for physical examination centers[88] - Total capital commitments: RMB 13.4 million (December 31, 2024: RMB 16.9 million), mainly for renovation of leased properties[88] Pledged Assets and Contingent Liabilities As of June 30, 2025, the Group had RMB 191.4 million in assets pledged for borrowings and no significant contingent liabilities - Pledged assets: As of June 30, 2025, assets with a total carrying amount of RMB 191,378 thousand were pledged for the Group's borrowings[97] - Contingent liabilities: As of June 30, 2025, the Group had no significant contingent liabilities[90] Gearing Ratio As of June 30, 2025, the gearing ratio slightly decreased to 46.2% - Gearing ratio: 46.2% (December 31, 2024: 46.4%), calculated as net debt divided by total capital[91] Risk Management The Group primarily faces interest rate risk, foreign currency risk, and credit risk, which are controlled through prudent treasury policies and credit management measures to ensure sufficient liquidity Cash Flow and Fair Value Interest Rate Risk The company primarily faces interest rate risk from bank borrowings and lease liabilities, with RMB 388.8 million in floating-rate borrowings, and no hedging was undertaken during the reporting period - Sources of interest rate risk: Primarily from bank borrowings and lease liabilities[92] - Floating-rate borrowings: As of June 30, 2025, RMB 388,800,000 of borrowings were at floating rates[92] - Hedging policy: No hedging was undertaken for cash flow and fair value interest rate risk during the reporting period[92] Foreign Currency Risk The company had no significant foreign currency risk during the reporting period, with only minor bank deposits denominated in HKD and USD, and currently no foreign exchange hedging policy - Foreign currency risk: The Group had no significant foreign currency risk during the reporting period (except for bank deposits denominated in HKD and USD)[93] - Hedging policy: The Group currently has no foreign exchange hedging policy[93] Credit Risk The company's credit risk is low, mainly from cash and cash equivalents and trade and other receivables, managed by assessing counterparty credit records and financial standing - Credit risk concentration: The Group does not have a high concentration of credit risk[94] - Credit risk management: Policies are in place to ensure that receivables with credit terms are granted to counterparties with sound credit records, and counterparty credit is continuously assessed[95] - Cash placement: Cash and cash equivalents are placed with major financial institutions that the directors believe have high credit quality[95] Liquidity Management The company monitors liquidity needs through rolling forecasts, ensuring sufficient cash for operations and maintaining adequate undrawn borrowing facilities - Liquidity management: The finance department monitors rolling forecasts of liquidity requirements to ensure sufficient cash for operating needs and maintains adequate undrawn borrowing facilities[96] - Future cash flow needs: Planned to be met by cash flows from operating activities, borrowings from financial institutions, and issuance of debt instruments or capital injections from the Company's shareholders as needed[96] Human Resources As of June 30, 2025, the Group had 8,363 employees, with a decrease in employee benefit expenses, and provides regular training to enhance employee skills and knowledge - Number of employees: As of June 30, 2025, the Group had 8,363 employees (December 31, 2024: 8,908 employees)[98] - Employee benefit expenses: Approximately RMB 469 million (2024: approximately RMB 502 million)[98] - Remuneration policy: Determined based on employees' experience, qualifications, and general market conditions, and set by the Board according to their performance, qualifications, and abilities[98] - Training: The Company provides regular training to employees to enhance their skills and knowledge[98] Interim Dividend The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the reporting period (six months ended June 30, 2024: HKD 0.045 per share)[99] Corporate Governance and Other Information Corporate Governance Code The company adopted the HKEX Corporate Governance Code, with deviations in directors' legal action insurance and the combined roles of Chairman and CEO, which the Board deems manageable - The Company has adopted the code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[100] - Deviation from Code Provision C.1.7: No insurance has been purchased for legal actions against directors, but the Board believes the litigation risk faced by directors is controllable[100] - Deviation from Code Provision C.2.1: Dr. Fang Yixin holds both the Chairman and Chief Executive Officer roles, which the Board believes facilitates the Group's implementation of new business strategies, and the operations of the Board and senior management ensure a balance of power and authority[101] Standard Code for Securities Transactions All directors confirmed compliance with the Standard Code for Securities Transactions, and the company is unaware of any non-compliance by senior management - All directors confirmed compliance with the Standard Code during the reporting period[103] - The Company is not aware of any non-compliance with the Standard Code by any senior management of the Group during the reporting period[103] Dealings in Listed Securities During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[104] Review of Financial Information The Board's audit committee reviewed the interim condensed consolidated financial information with management and external auditors, who also conducted an independent review - The Board's audit committee has discussed and reviewed the Group's unaudited interim condensed consolidated financial information for the reporting period with management and external auditors[105] - The Company's external auditor, BDO Limited, has conducted an independent review of the Group's interim condensed consolidated financial information in accordance with Hong Kong Standard on Review Engagements 2410[106] Publication of Announcement and Interim Report This announcement and the interim report will be published on the HKEX website and the company's website - This announcement will be published on the HKEX website (www.hkexnews.hk) and the Company's website (www.rich-healthcare.com)[107](index=107&type=chunk) - The Company's interim report for the reporting period, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the above websites in due course[107] Acknowledgement and Board Composition The Board extends gratitude to all colleagues, shareholders, customers, banks, and business contacts for their support, and as of the announcement date, comprises four executive and three independent non-executive directors - The Board expresses its gratitude to all colleagues for their diligence, dedication, loyalty, and integrity, as well as to all shareholders, customers, banks, and other business contacts for their trust and support[108] - As of the date of this announcement, the Board comprises four executive directors (Dr. Fang Yixin, Dr. Mei Hong, Mr. Fang Haoze, and Ms. Lin Xiaoying) and three independent non-executive directors (Dr. Wang Yong, Mr. Jiang Peixing, and Ms. Huang Siying)[110]