Core Viewpoint - New Century Healthcare (01518.HK) reported a significant decline in revenue and incurred losses for the six months ending June 30, 2025, primarily due to reduced demand for pediatric and obstetric services [1] Financial Performance - Revenue for the period was RMB 305 million, representing a year-on-year decrease of 26.8% [1] - The loss attributable to the company's owners was RMB 65.234 million, compared to a profit of RMB 25.193 million in the same period last year [1] - Basic loss per share was RMB 0.14 [1] Loss Drivers - The company recorded a pre-tax loss of RMB 41.1 million, contrasting with a pre-tax profit of RMB 72.2 million in the previous year [1] - The decline in revenue was mainly attributed to a decrease in demand for pediatric and obstetric services, resulting in a revenue drop of RMB 111.5 million [1] - Additionally, the company faced impairment losses of RMB 12.5 million related to goodwill and RMB 21.2 million related to property, plant, and equipment [1]

Core Viewpoint - New Century Healthcare (01518.HK) has issued a profit warning, expecting a loss attributable to shareholders between RMB 60 million and 70 million for the six months ending June 30, 2025, marking a significant decline from a net profit of RMB 25.2 million in the same period of 2024 [1][3]. Financial Performance - The company reported a revenue decline of 9.28% to RMB 846 million in 2024, with net profit plummeting by 43.71% to RMB 47.38 million, and a decrease in gross margin from 43.63% in 2023 to 40.75% [3]. - The shift from profit to loss in the first half of 2025 is attributed to reduced demand for pediatric and obstetric services, impairment losses on goodwill and other long-term assets, and the reversal of deferred tax assets [3]. Regulatory Issues - New Century Healthcare and several directors faced disciplinary action from the Hong Kong Stock Exchange due to violations related to connected transactions, resulting in a loss of over RMB 100 million [4]. - The Hong Kong Stock Exchange has mandated the company to conduct an independent internal review, and all involved directors are required to undergo training [4]. Company Overview - New Century Healthcare is a private medical group focused on providing high-quality medical services to children and women, with its first hospital established in 2002 and officially operating since 2006 [7].

Core Viewpoint - New Century Healthcare (01518) anticipates a significant shift from profit to loss for the six months ending June 30, 2025, projecting a loss attributable to shareholders between RMB 60 million and 70 million, compared to a profit of approximately RMB 25.2 million in the same period of 2024 [1] Group 1: Financial Performance - The company expects a loss attributable to shareholders of between RMB 60 million and 70 million for the upcoming six-month period [1] - In contrast, the company reported a profit of approximately RMB 25.2 million for the same period in 2024 [1] Group 2: Reasons for Performance Change - The board attributes the expected loss primarily to a decrease in demand for pediatric and obstetric services, leading to reduced revenue [1] - Additional factors contributing to the loss include impairment losses on certain goodwill and other long-term assets [1] - The reversal of deferred tax assets is also cited as a reason for the anticipated financial downturn [1]

Core Viewpoint - New Century Healthcare (01518) anticipates a significant loss for the six months ending June 30, 2025, with expected losses attributable to shareholders ranging between RMB 60 million to 70 million, a stark contrast to a profit of approximately RMB 25.2 million in the same period of 2024 [1] Summary by Relevant Categories Financial Performance - The company expects to report a loss of RMB 60 million to 70 million for the upcoming six-month period, compared to a profit of RMB 25.2 million in the previous year [1] Factors Influencing Performance - The anticipated shift from profit to loss is primarily due to a decrease in demand for pediatric and obstetric services, leading to reduced revenue [1] - Additional contributing factors include impairment losses on certain goodwill and other long-term assets, as well as the reversal of deferred tax assets [1]

Core Viewpoint - The Chinese government is expanding pediatric healthcare services across the country, aiming to establish a high-quality pediatric medical service system by 2025 [1][2]. Group 1: Pediatric Healthcare Expansion - Nearly 8,000 comprehensive hospitals, 98% of county-level hospitals, and over 80% of grassroots medical institutions can now provide pediatric services [1]. - As of June 30, 2023, 1,877 tertiary and 2,936 secondary public comprehensive hospitals are equipped to offer pediatric services [2]. - Three national children's medical centers are enhancing service capabilities and developing new technologies through support to medical institutions [2]. Group 2: Psychological and Sleep Services - 330 prefecture-level cities and 86 municipal districts now offer psychological outpatient services, while 324 prefecture-level cities and 80 municipal districts provide sleep outpatient services [3]. - The national psychological assistance hotline "12356" has been launched in all 31 provinces, receiving over 500,000 calls since May 1 [3]. Group 3: Blood Dialysis Services - 1,614 counties with a permanent population of over 100,000 can now provide blood dialysis services, with 8 counties still in the process of implementation [4]. - A total of 2,657 county-level hospitals have updated or added 227 water treatment machines and 4,421 dialysis machines, serving over 19.86 million patients [4][5]. Group 4: Financial Support for Dialysis Patients - Local governments are increasing financial investments to improve blood dialysis service quality, with one county investing over 4 million yuan for equipment [5]. - By July 2025, the county's dialysis patient referral rate is expected to reach 92% [5].

Core Insights - The National Health Commission has reported significant progress on four of the eight health service initiatives aimed at improving public health by 2025, including the establishment of pediatric services, mental health hotlines, dialysis services, and data sharing among medical institutions [1][10] Group 1: Pediatric Services - A total of 1,877 tertiary hospitals and 2,936 secondary hospitals have opened pediatric departments within six months, with 98% of county hospitals and 80% of township health centers now providing pediatric services [2] - The "15-minute pediatric circle" is taking shape in county areas, enhancing accessibility for families [2] - Quality improvements include the establishment of a joint consultation system and the integration of traditional Chinese medicine into pediatric care, reducing average waiting times to under 30 minutes [2] Group 2: Mental Health Services - The "12356" psychological assistance hotline has been launched across 31 provinces, receiving 500,000 calls, highlighting the urgent need for mental health support [4] - Mental health issues affect approximately 280 million people in China, with a significant gap in professional help-seeking behavior [3][4] - In Shandong, 97% of counties have established student mental health development centers, and the coverage of psychological services in schools is nearly universal [5] Group 3: Dialysis Services - The number of dialysis patients in China has increased significantly, with 1.183 million patients reported, including 1.027 million on hemodialysis [6][7] - Local governments are investing in dialysis equipment and optimizing medical insurance policies to reduce patient burdens, achieving a local treatment rate of 92% for dialysis patients [7] - A total of 1,614 counties with populations over 100,000 now provide dialysis services, with ongoing efforts to enhance service capabilities [7] Group 4: Data Sharing and Interoperability - Shandong province has developed a data sharing system among 1,049 medical institutions, reducing redundant testing costs by approximately 320 million yuan [8] - The range of mutually recognized medical tests has expanded from 200 to 429, facilitating better patient care and reducing the need for repeated examinations [8][9] - Future plans aim to increase the number of recognized tests to 500, enhancing cross-province medical service efficiency [9]

Core Viewpoint - The National Health Commission of China has initiated the 2025 health service project focusing on addressing urgent public health needs, with significant progress reported in pediatric services, mental health support, mutual recognition of medical test results, and dialysis services [2][3][6][7][10]. Pediatric Services - The pediatric service network has been rapidly improved, with 1,877 tertiary public hospitals and 2,936 secondary public hospitals providing pediatric services as of June 30 [6] - Over 80% of grassroots medical institutions can now offer pediatric services, addressing the uneven distribution of pediatric medical resources [6] - A collaborative network involving 50 medical institutions has been established to enhance pediatric care accessibility [6] Mental Health Services - The 12356 psychological assistance hotline has received over 22,700 calls since its launch, averaging about 125 calls per day, serving as a critical support for individuals in distress [7] - Nationwide, the hotline has handled nearly 500,000 calls, with 330 cities providing psychological outpatient services [8] - In Shandong province, 93.4% of counties have established standardized mental health and sleep clinics, with extensive training programs for mental health professionals [8] Mutual Recognition of Medical Test Results - The mutual recognition of medical test results has been implemented in Shandong province, allowing patients to save costs and avoid redundant tests [9] - As of now, 1,049 medical institutions are connected to the provincial mutual recognition platform, covering all secondary and above public hospitals [9] - Nationwide, over 312 cities have initiated mutual recognition projects, enhancing the quality of medical testing services [9] Dialysis Services - Dialysis services have been expanded to county-level hospitals, significantly reducing travel time and costs for patients [10] - In counties with a population over 100,000, 1,614 counties now provide dialysis services, with ongoing efforts to equip more counties [10] - A total of 2,657 county-level hospitals have upgraded their facilities, serving over 19.86 million patients [10]