TC Medical(SH:600763)2021-10-14 16:00Financial and Operational Summary Key Financial Indicators In Q3 2021 and the first three quarters, the company achieved robust growth in revenue and net profit, with year-to-date revenue increasing by 44.16% and net profit attributable to shareholders by 55.09%, indicating strong business momentum Key Financial Metrics | Indicator | Q3 2021 (RMB) | YoY Change | First Three Quarters 2021 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 818,880,220.58 | +12.44% | 2,136,380,294.87 | +44.16% | | Net Profit Attributable to Shareholders | 269,318,695.18 | +5.88% | 620,091,071.75 | +55.09% | | Net Profit Attributable to Shareholders (Excl. Non-recurring) | 265,819,823.86 | +6.20% | 607,514,156.17 | +56.69% | | Net Cash Flow from Operating Activities | N/A | N/A | 680,280,196.69 | +48.13% | | Basic Earnings Per Share (RMB/Share) | 0.84 | +6.33% | 1.93 | +54.40% | Operational Data Analysis The company's business is highly concentrated in Zhejiang Province, contributing over 90% of revenue, where the 'main hospital + branch' model shows significant expansion, with branches outperforming the main hospital in revenue and outpatient volume, and core services like general dentistry, orthodontics, pediatrics, and implants achieving strong growth exceeding 37% - In the first three quarters of 2021, medical service revenue within Zhejiang Province accounted for 90.39%, growing by 42.03% year-over-year, while external revenue accounted for 9.61%, growing by 37.72%, indicating that intra-province business remains the core growth engine6 - Within Zhejiang, branch medical service revenue increased by 46.75% year-over-year, and outpatient visits grew by 43.53%, both significantly higher than the regional main hospital's (Hangzhou Stomatological Hospital) growth rates of 32.70% and 23.76% respectively, demonstrating the effectiveness of the branch network expansion strategy79 Main Business Revenue by Type | Business Type | Main Business Revenue Jan-Sep 2021 (RMB 10,000) | Revenue Share | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Implants | 33,101.36 | 16.47% | 46.49% | | Orthodontics | 43,635.62 | 21.71% | 37.89% | | Pediatrics | 40,904.28 | 20.35% | 41.64% | | General Dentistry | 83,367.41 | 41.47% | 41.65% | Non-recurring Gains and Losses In the first three quarters of 2021, the company's non-recurring gains and losses totaled RMB 12.577 million, primarily comprising government grants (RMB 5.426 million) and capital occupation fees from non-financial enterprises (RMB 11.633 million) Non-recurring Gains and Losses Items | Item | Amount from Year-Beginning to End of Reporting Period (RMB) | | :--- | :--- | | Government Grants Recognized in Current P&L | 5,426,188.14 | | Capital Occupation Fees from Non-financial Enterprises Recognized in Current P&L | 11,632,833.33 | | Custody Fees from Entrusted Operations | 1,640,543.92 | | Total | 12,576,915.58 | Analysis of Financial Indicator Changes During the reporting period, the significant growth in the company's key financial indicators, including operating revenue, net profit, operating cash flow, earnings per share, and total assets, was primarily driven by the continuous increase in medical service revenue - Year-over-year growth rates for operating revenue, net profit attributable to parent, non-recurring net profit attributable to parent, net cash flow from operating activities, and basic and diluted earnings per share reached 44.16%, 55.09%, 56.69%, 48.13%, and 54.40% respectively, primarily driven by increased medical service revenue during the period12 - Total assets increased by 38.29% from the beginning of the year, mainly due to increased profits from medical service revenue growth and the recognition of right-of-use assets upon adoption of new lease standards12 Shareholder Information Major Shareholder Holdings As of the end of the reporting period, the company had 61,420 common shareholders, with Hangzhou Baoqun Industrial Group Co., Ltd. as the largest shareholder holding 33.75%, and the top ten shareholders including prominent institutional investors such as China Europe Medical Health Mixed Securities Investment Fund and Yinhua Rich Theme Mixed Securities Investment Fund Top Ten Shareholder Holdings | Shareholder Name | Number of Shares Held | Shareholding Percentage (%) | | :--- | :--- | :--- | | Hangzhou Baoqun Industrial Group Co., Ltd. | 108,232,000 | 33.75 | | Bao Zhengliang | 14,413,800 | 4.50 | | China Europe Medical Health Mixed Securities Investment Fund | 14,273,918 | 4.45 | | Zhejiang Cunji Medical Education Foundation | 9,619,200 | 3.00 | | Hong Kong Securities Clearing Company Limited | 7,922,594 | 2.47 | | Yinhua Rich Theme Mixed Securities Investment Fund | 4,500,000 | 1.40 | - As of the end of the reporting period, the total number of common shareholders was 61,42013 Quarterly Financial Statements Consolidated Balance Sheet As of September 30, 2021, the company's total assets reached RMB 4.238 billion, a 38.29% increase from the beginning of the year, and equity attributable to parent company shareholders grew by 28.87% to RMB 2.771 billion, with significant asset and liability increases partly due to the initial recognition of approximately RMB 600 million in right-of-use assets and corresponding lease liabilities under new leasing standards Consolidated Balance Sheet Summary | Item | September 30, 2021 (RMB) | December 31, 2020 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Total Assets | 4,237,778,773.16 | 3,064,401,785.36 | +38.29% | | Total Liabilities | 1,206,027,423.48 | 716,016,706.49 | +68.43% | | Total Equity Attributable to Parent Company Owners | 2,770,866,957.24 | 2,150,129,168.45 | +28.87% | - Non-current assets include a new 'Right-of-Use Assets' account totaling RMB 600,308,994.32, and non-current liabilities include a new 'Lease Liabilities' account totaling RMB 497,163,947.87, primarily due to the adoption of new lease standards1719 Consolidated Income Statement In the first three quarters of 2021, the company achieved total operating revenue of RMB 2.136 billion, a 44.16% year-over-year increase, with total operating costs growing by 36.36% to RMB 1.357 billion, indicating faster revenue growth than cost growth, ultimately resulting in a net profit attributable to parent company shareholders of RMB 620 million, up 55.09%, demonstrating sustained profitability improvement Consolidated Income Statement Summary | Item | First Three Quarters 2021 (RMB) | First Three Quarters 2020 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | I. Total Operating Revenue | 2,136,380,294.87 | 1,481,919,118.47 | +44.16% | | II. Total Operating Costs | 1,356,786,467.13 | 995,026,320.14 | +36.36% | | III. Operating Profit | 811,121,499.15 | 518,623,261.66 | +56.40% | | V. Net Profit | 705,279,444.74 | 448,637,917.08 | +57.20% | | Net Profit Attributable to Parent Company Shareholders | 620,091,071.75 | 399,824,838.35 | +55.09% | Consolidated Cash Flow Statement In the first three quarters of 2021, net cash flow from operating activities was RMB 680 million, a 48.13% increase year-over-year, largely aligning with profit growth and indicating high earnings quality, while net cash outflow from investing activities was RMB 122 million, primarily for fixed asset acquisition, and net cash outflow from financing activities was RMB 182 million, mainly for debt repayment and dividend distribution Consolidated Cash Flow Statement Summary | Item | First Three Quarters 2021 (RMB) | First Three Quarters 2020 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 680,280,196.69 | 459,247,243.51 | +48.13% | | Net Cash Flow from Investing Activities | -121,604,050.06 | -126,459,236.41 | N/A | | Net Cash Flow from Financing Activities | -182,207,773.75 | -115,742,651.72 | N/A | Explanation of New Lease Standard Adjustments Effective January 1, 2021, the company adopted new lease standards, retrospectively adjusting its opening financial statements, which resulted in a simultaneous increase of RMB 471 million in total assets and liabilities, primarily due to the recognition of right-of-use assets and lease liabilities, with corresponding adjustments to prepayments and long-term deferred expenses, but no impact on total owner's equity Adjustments from Initial Adoption of New Lease Standards | Adjustment Item | Adjustment Amount (RMB) | Description | | :--- | :--- | :--- | | Right-of-Use Assets | +496,808,729.17 | New Non-current Asset | | Prepayments | -24,177,676.65 | Reclassified to Right-of-Use Assets, etc. | | Long-term Deferred Expenses | -1,928,756.41 | Reclassified to Right-of-Use Assets, etc. | | Non-current Liabilities Due Within One Year | +72,645,088.70 | New Current Liability | | Lease Liabilities | +398,057,207.41 | New Non-current Liability | | Total Assets/Liabilities Adjustment | +470,702,296.11 | |