Revenue Grew by 25.7%; Great Achievements in SOE Hospital Take-overs

HONG KONG – (ACN Newswire) – The board (the “Board”) of directors (the “Directors”) of Genertec Universal Medical Group Company Limited (the “Company” or “Universal Medical”) is pleased to announce the annual results of the Company and its subsidiaries for the year ended 31 December 2018.

2018 ANNUAL RESULTS HIGHLIGHTS
– Revenue amounted to approximately RMB4,297 million, representing an increase of 25.7% as compared with that of approximately RMB3,419 million for 2017.
– Profit before tax amounted to approximately RMB1,859 million, representing an increase of 17.9% as compared with that of approximately RMB1,576 million for 2017.
– Profit for the year amounted to approximately RMB1,351 million, representing an increase of 17.6% as compared with that of approximately RMB1,149 million for 2017.
– Total assets amounted to approximately RMB47,257 million, representing an increase of 25.2% as compared with that of approximately RMB37,733 million as at 31 December 2017.
– Total shareholders’ equity amounted to approximately RMB10,257 million, representing an increase of 37.3% as compared with that of approximately RMB7,469 million as at 31 December 2017.
– Return on equity was 17.05% and the return on total assets was 3.18%.

In 2018, Universal Medical further advanced in the medical industry and made significant strategic progress. Guided by the strategic goal of building a leading medical and health conglomerate in China, the Company seized the golden policy and market opportunities and made great achievements from the spin-off and take-over of medical institutions of state owned enterprises (“SOEs”), which laid a solid foundation for building a medical and health conglomerate with synergic advantage. In 2018, the Company innovated and upgraded its strategic layout, solidly optimized various operations, strictly controlled operational risks, improved management ability, and strengthened its comprehensive strength, therefore making steady growth in operating performance. The Company’s revenue increased by 25.7% year-on-year to RMB4,296.9 million. The Company’s profit before tax increased by 17.9% year-on-year to RMB1,859.0 million. The asset size grew steadily and asset quality continued to maintain its leading position in the industry. The corporate credit rating of China Universal Leasing Co., Ltd., a wholly-owned subsidiary of Universal Medical, was successively uprated to AAA by China Cheng Xin International Credit Rating Co., Ltd. and Shanghai Brilliance Credit Rating & Investors Service Co., Ltd., which further enhanced the Company’s overall financing capabilities.

Solidly Promoting Hospital Operation and Management Business

In 2018, the Company seized the opportunity from the reform policy to comprehensively roll out the reintegration work on spinning off and taking over the medical institutions of SOEs, and great achievements were made. As the main operating entity of the medical and health segment of China General Technology Group, the Company actively responded to policies of deepening reform on SOE medical institutions. In 2018, the Company has been in close contact with several state-owned groups and their quality hospitals to participate in the spin-off and take-over of medical institutions of SOEs through joint venture and open market bidding, and signed contracts for several projects in the same year. Up to now, Company has managed and operated 8 hospitals owned by SOEs in 5 provinces in China, i.e. Shaanxi, Shandong, Anhui, Liaoning and Sichuan (3 Grade III hospitals and 5 Grade II hospitals) with a capacity totaling 6,000 beds. In the future, based on the coordination of the epidemiology survey in the local area and the current situation of each hospital, and the prediction of medical development trends, the Company will enhance the comprehensive strength and brand influence of these hospitals by planning their development orientation, introducing quality medical resources and promoting discipline development to develop regional medical centers with characteristics. In the meanwhile, the Company steadily advanced the implementation of the construction and operation cooperation projects. On 9 August 2018, the Company formally signed a contract with the Health and Family Planning Committee of Handan and Handan First Hospital in connection with the joint establishment of the new east district of Handan First Hospital. In the meanwhile, progress on the construction project of International Land Port Hospital jointly undertaken by the Company and First Affiliated Hospital also achieved further milestones.

In 2018, while accelerating the development of hospital operation and management business, Universal Medical focused on improving its own strength and continuously enhanced its hospital operation and management capability. Taking the development of the hospital as the core, the Company further optimized the organizational structure of the headquarters to output resources and offer effective services, and a group management and control system with smooth communication channels and flexible coordination mechanism was established; the Company had more than 300 employees with medical background based at the headquarters and continued to recruit professional talents and invite leading medical talents joined the management to guarantee the professional operation and development of the hospital group; the Company also built a unique discipline brand and continued to accumulate various medical resources. The Company plans to establish clinical medical schools and regional doctors’ clubs to provide a comprehensive medical resource platform to support the development of the hospital group’s disciplines; guided by the concept of delicacy management, the Company established a comprehensive hospital operation management system, including quality and safety management and performance management. The Company has also set up an integrated hospital supply chain operation system, which is centrally managed by the headquarters.

Constantly Consolidating Medical Finance Business

In 2018, facing changing environment in domestic and international finance markets and even more fierce competition in finance lease market, the staff of Universal Medical worked meticulously in their market sector, continuing to intensify market exploitation and enhance existing customers’ stickiness by providing differentiated and high-quality services. Assets steadily grew with good quality. As at 31 December 2018, the total assets amounted to RMB47,256.9 million, representing an increase of 25.2% as compared with the end of 2017. The Company continued to deepen its cooperation with various financial institutions, actively expand financing channels, enrich financing types, and optimize its debt structure, the Company has controlled financing cost in a reasonable and effective way, the net interest spread of 3.23% still leading the industry. As always, the Company executed prudent risk control processes and strict asset management measures to ensure that the Company’s asset quality remains the leading position in the industry.

Further Optimize the Medical Digitalization Business

In 2018, Universal Medical further optimized its self-developed Internet-based health platform and provided technical support for member hospitals to implement online medical care. The 1.0 version of the platform was released covering the functions of offering medical advice in image-text, video and audio forms and family doctor contracting. This version came into service firstly in Yantai Port Hospital at the end of 2018. Meanwhile, the Group has gradually developed an independent market, and the medical digitalization business cooperation with People’s Hospital of Baoqing has entered the implementation stage. In the future, the medical digitalization sector will bring about a deep integration of the Internet and medical services to improve patient experience, promote disease source management, and ensure the medical quality and safety of patients in a practical way. This sector will facilitate and guarantee hospital management, and become a strategic business pillar of the Company.

Further Expansion the Medical Technology Service

With domestic and international resources diversifying, Universal Medical has further expanded its medical technology services. In 2018, the Group further expanded its scope of cooperation in cerebal vascular accident (“CVA”) projects, and concentrated efforts on prevention and rehabilitation of chronic diseases with the help of medical alliances. It also provided expert resources to organize trainings as technology support to each center in undertaking local prevention and treatment services. At the same time, the Company also held several advanced academic medical forums, providing effective information exchange platforms for domestic and foreign experts and scholars. The Company has continued to select cutting-edge medical devices with a promising market in global medical device fields, and provided services on registration and introduction of these devices and related services in Chinese market. At present, the Company is the exclusive general agent and regional agent in China for 19 categories of medical device products and cooperates with up to 6 medical device suppliers, covering more than 200 products.

In the future, Universal Medical will continue to focus on the development trends in medical fields, build up its strength, lay a solid foundation for medical finance business and strengthen the Group’s market position. It will seize policy and market opportunities to develop hospital operation and management business, constantly expand the scale of medical institutions, and improve their overall capacity. Besides, the Group will actively expand the medical digitalization business, establish differentiated competitive advantages, and extend hospital value chain. It will continue to improve the medical technology service and expand the service scope, striving to build Universal Medical into a leading medical and health conglomerate and make contribution to the “Healthy China” plan.

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