华检医疗(01931) - 2023 - 中期业绩

Financial Summary The company achieved robust performance growth in the first half of 2023, driven by increased demand for in-vitro diagnostic products and improved hospital operations | Indicator | H1 2023 (RMB thousands) | H1 2022 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,377,314 | 1,176,557 | 17.1% | | Gross Profit | 301,540 | 266,423 | 13.2% | | Profit for the Period | 104,002 | 69,701 | 49.2% | | Profit Attributable to Owners of the Parent | 103,009 | 81,149 | 26.9% | | Adjusted Profit for the Period | 117,396 | 96,773 | 21.3% | | Adjusted Profit Attributable to Owners of the Parent | 116,403 | 98,654 | 18.0% | | Basic Earnings Per Share (RMB cents) | 7.62 | 6.07 | Increase of 1.55 cents | - Revenue growth of 17.1% was primarily driven by increased demand for in-vitro diagnostic (IVD) products from end-customers, benefiting from the gradual normalization of hospital operations post-COVID-19 pandemic[2] - Profit growth of 49.2% was primarily driven by increased revenue and the absence of a RMB 19.524 million impairment loss on property, plant and equipment and intangible assets recognized in the prior period[14] Financial Statements Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The company's total revenue reached RMB 1.377 billion with gross profit of RMB 302 million, and profit for the period increased 49.2% to RMB 104 million, primarily due to revenue growth and the absence of prior-period impairment losses | Item (RMB thousands) | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Revenue | 1,377,314 | 1,176,557 | | Cost of Sales | (1,075,774) | (910,134) | | Gross Profit | 301,540 | 266,423 | | Selling and Distribution Expenses | (60,568) | (45,999) | | Administrative Expenses | (71,933) | (77,395) | | Other Expenses | – | (21,761) | | Profit Before Tax | 162,909 | 103,495 | | Profit for the Period | 104,002 | 69,701 | - Basic earnings per share attributable to owners of the parent increased to 7.62 RMB cents from 6.07 RMB cents in the prior period[6] Interim Condensed Consolidated Statement of Financial Position As of June 30, 2023, total assets increased 5.5% to RMB 4.554 billion, primarily driven by current assets, with total equity rising to RMB 3.204 billion and a current ratio of 2.4 times indicating strong liquidity | Item (RMB thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Non-current Assets | 1,825,251 | 1,839,639 | | Total Current Assets | 2,728,417 | 2,474,638 | | Total Assets | 4,553,668 | 4,314,277 | | Total Current Liabilities | 1,133,008 | 945,164 | | Total Non-current Liabilities | 216,741 | 215,649 | | Net Assets | 3,203,919 | 3,153,464 | | Equity Attributable to Owners of the Parent | 3,202,848 | 3,153,386 | - Within current assets, inventories increased from RMB 629 million to RMB 823 million, and cash and cash equivalents rose from RMB 1.021 billion to RMB 1.249 billion[20] - Among current liabilities, interest-bearing bank borrowings increased from RMB 329 million to RMB 497 million[20] Management Discussion and Analysis Business Overview The Group is a leading IVD product distributor in China, primarily serving as the exclusive distributor for Sysmex coagulation products, with operations spanning distribution, after-sales services, and an emerging, loss-making private label product business - The Group's core business is the distribution of IVD products, primarily through its wholly-owned subsidiary, Vista, as the exclusive national distributor of Sysmex Corporation's coagulation products in China since 1997[42][179] - The Group's operations are segmented into three businesses: distribution, after-sales services, and private label products[153] - As of June 30, 2023, the Group's distribution network included 240 direct customers (hospitals and medical institutions) and 935 distributors, covering 31 provinces, municipalities, and autonomous regions across China[44] - The private label product business (mass spectrometry, microbiology, molecular diagnostics) remains in early-stage research, incurring an operating loss of RMB 13.058 million during the reporting period[46][156] Industry Overview and Business Outlook The China IVD market is projected for high growth, reaching RMB 278.7 billion by 2027 with a 15.7% CAGR, benefiting the Group as a leader in coagulation analysis IVD primary distribution with a 43.2% market share, as it expands its product portfolio, distribution network, and R&D capabilities - According to Frost & Sullivan, China's IVD market size is projected to grow from 2021 to RMB 278.7 billion by 2027, at a compound annual growth rate (CAGR) of 15.7%[47] - In 2021, Vista was the leader in China's coagulation analysis IVD primary distribution market, holding a 43.2% market share[48] - Development strategies include expanding the product portfolio and distribution network, enhancing solution service capabilities, and increasing R&D to accelerate private label product expansion[49][161][186] Financial Review The Group demonstrated strong financial performance with revenue growing 17.1%, primarily driven by distribution and after-sales services, while net profit margin improved from 5.9% to 7.6% due to effective cost control and the absence of prior-period impairment losses Key Financial Ratios | Financial Ratio | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Gross Margin (%) | 21.9% | 22.6% | | Net Profit Margin (%) | 7.6% | 5.9% | | Current Ratio (times) | 2.4 | 2.6 | | Quick Ratio (times) | 1.7 | 2.0 | | Debt-to-Equity Ratio (times) | 0.2 | 0.1 | - Adjusted profit for the period was RMB 117 million, increasing 21.3% year-on-year, primarily due to increased revenue, after excluding non-operating items such as property impairment and share-based payment expenses[66][94] - As of June 30, 2023, cash and cash equivalents totaled RMB 1.249 billion, a 22.4% increase from RMB 1.021 billion at the end of 2022[53][95] Revenue Analysis Total revenue increased 17.1% to RMB 1.377 billion, primarily driven by 17.8% growth in distribution business and 241.0% growth in private label products, with IVD reagents and consumables accounting for nearly 90% of product sales Revenue by Business Segment (RMB thousands) | Business Segment | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Distribution Business | 1,293,002 | 1,097,468 | 17.8% | | After-sales Services | 78,163 | 77,286 | 1.1% | | Private Label Product Business | 6,149 | 1,803 | 241.0% | | Total | 1,377,314 | 1,176,557 | 17.1% | Revenue by Product Type (RMB thousands) | Product Type | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | IVD Analyzers | 142,529 | 124,326 | 14.6% | | IVD Reagents and Other Consumables | 1,156,622 | 974,945 | 18.6% | | Total (Excluding Services) | 1,299,151 | 1,099,271 | 18.2% | Gross Profit and Gross Margin Analysis Total gross profit increased 13.2% to RMB 302 million, but overall gross margin slightly decreased from 22.6% to 21.9%, primarily due to a significant decline in after-sales service gross margin, despite improvements in distribution and private label businesses Gross Profit and Gross Margin by Business Segment | Business Segment | H1 2023 Gross Profit (RMB thousands) | H1 2023 Gross Margin (%) | H1 2022 Gross Profit (RMB thousands) | H1 2022 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Distribution Business | 266,693 | 20.6% | 216,907 | 19.8% | | After-sales Services | 30,379 | 38.9% | 48,388 | 62.6% | | Private Label Product Business | 4,468 | 72.7% | 1,128 | 62.6% | | Total | 301,540 | 21.9% | 266,423 | 22.6% | - The overall gross margin decline was primarily due to increased cost of services provided, leading to a decrease in after-sales service gross margin from 62.6% to 38.9%[60][228] Expense Analysis Selling and distribution expenses increased 31.7% due to increased marketing activities post-pandemic, while administrative expenses decreased 7.1% due to the absence of prior-period share-based payment expenses, and finance costs declined 9.8% due to reduced average bank borrowings - Selling and distribution expenses increased 31.7% to RMB 60.57 million, driven by increased marketing activities as the impact of COVID-19 subsided[63] - Administrative expenses decreased 7.1% to RMB 71.93 million, primarily due to the absence of RMB 11.99 million in share-based payment expenses recognized in the prior period[92] - Other expenses of RMB 21.76 million (primarily asset impairment) recognized in the prior period did not recur in the current period, positively impacting profit growth[64] Supplementary Information Interim Dividend The Board resolved to declare an interim dividend of 2.970 HK cents per share for the six months ended June 30, 2023, an increase from 2.729 HK cents in the prior period, payable on September 6, 2023 - The Board declared an interim dividend of 2.970 HK cents per share, higher than 2.729 HK cents per share in the prior period[106] - The record date for the dividend is August 25, 2023, with an expected payment date of September 6, 2023[106] Corporate Governance The company complied with most corporate governance code provisions, with the Audit Committee reviewing interim results without objection, and the combined roles of Chairman and CEO are deemed beneficial for strong and consistent leadership - The Audit Committee reviewed the interim results and confirmed their preparation in accordance with applicable accounting standards, with no objections to the accounting policies[110] - The roles of Chairman and Chief Executive Officer are both held by founder Mr. He Jucheng, an arrangement the Board believes facilitates effective and efficient decision-making and strategic planning, benefiting the Group as a whole[105][218]