HONG KONG, Aug. 29, 2011 /PRNewswire-Asia-FirstCall/ --
China Cord Blood Corporation (NYSE: CO) ("CCBC" or the "Company"),
China's leading provider of cord
blood collection, laboratory testing, hematopoietic stem cell
processing, and stem cell storage services, today announced its
preliminary unaudited financial results for the first quarter of
fiscal year 2012, which ended June 30,
2011.
First Quarter of Fiscal 2012
Highlights
- Revenue for the first quarter of fiscal 2012 increased by 22.0%
to RMB87.5 million ($13.5 million) from RMB71.7 million in the prior year period.
- New subscriber sign-ups and accumulated subscriber base reached
12,828 and 198,658, respectively.
- Gross profit increased by 24.1% to RMB67.6 million ($10.5
million) from RMB54.4 million
from the prior year period.
- Gross margin was 77.3%, compared to 75.9% for the prior year
period.
- Operating income increased by 31.7% to RMB30.8 million ($4.8
million) from RMB23.4 million
for the prior year period.
- Net income attributable to shareholders, inclusive of dividend
income of RMB7.2 million
($1.1 million) from Shandong Cord
Blood Bank and effect of the preferential tax treatment obtained by
the Guangdong subsidiary resulting
in a discrete tax benefit of RMB10.2
million ($1.6 million), was
RMB40.0 million ($6.2 million), compared to RMB17.6 million in the prior year period.
"Our first quarter delivered strong financial performance driven
by sustained growth in subscriber demand year-over-year following
the upward price adjustment implemented in April 2011," stated Ms.
Zheng, Chairperson and Chief Executive Officer of CCBC. "Our
strategy to develop a strong sales network while broadening our
commercial reach has built a widely-recognized brand and an easily
accessible network that will greatly facilitate our efforts to
attract new subscribers."
"In addition to solid financial performance, this quarter had
several exciting developments," Ms. Zheng further commented. "The
Ministry of Health has issued new guidelines extending the 'Ten
Licenses Policy', which reiterated that no more than ten licenses
will be issued for the provision of cord blood banking services
through 2015. We welcome the policy extension as it sets a clear
guideline for the industry and the general public. With access to
three licenses and our 19.92% investment in Shandong Cord Blood
Bank, we are fully committed to the development of the cord blood
banking industry in China and will
continue to grow by driving subscriber penetration rates. We are
also pleased that our Guangdong
subsidiary has been approved as a 'High and New Technology
Enterprise', with the result that it now enjoys a reduced tax rate
of 15% until December 31, 2012."
Summary -
The Quarters Ended June
30, 2010 and 2011
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
|
2010
|
2011
|
|
(in
thousands)
|
RMB
|
RMB
|
USD
|
|
Revenue
|
71,696
|
87,458
|
13,531
|
|
Gross Profit
|
54,444
|
67,590
|
10,457
|
|
Operating Income
|
23,355
|
30,752
|
4,757
|
|
Net Income Attributable
to Shareholders
|
17,586
|
40,022
|
6,192
|
|
EPS
– Basic (RMB/USD
Cents)
|
0.26
|
0.53
|
0.08
|
|
|
|
|
|
|
Revenue Breakdown (%)
|
|
|
|
|
Processing Fee
|
79.1%
|
74.2%
|
|
|
Storage Fee
|
20.9%
|
25.8%
|
|
|
|
|
|
|
|
New Subscribers
(persons)
|
12,180
|
12,828
|
|
|
Accumulated Total Number of
Subscribers (persons)
|
141,492
|
198,658
|
|
|
|
|
|
|
|
|
First Quarter Fiscal 2012
Financial Results
REVENUE. Revenue increased by 22.0% to
RMB87.5 million ($13.5 million) in the first quarter of fiscal
2012 from RMB71.7 million in the
prior year period. The strong revenue growth was driven by
continued growth in new subscribers and an increase in the
Company's processing fee implemented in April 2011.
Revenue generated from processing fees increased to RMB64.9 million ($10.0
million) from RMB56.7 million
in the prior year period, reflecting 12,828 new subscriber sign-ups
this quarter, a 5.3% increase in new subscribers from the prior
year period, as well as the effect of the processing fee
increase.
Revenue generated from storage fees increased to RMB22.6 million ($3.5
million) from RMB15.0 million,
which accounted for 25.8% of the total first quarter revenue as
compared to 20.9% in the prior year period. The Company's
accumulated subscriber base grew 40.4% year-over-year to 198,658,
backed by continued strong demand from the Beijing and Guangdong markets.
GROSS PROFIT. Gross profit in the first quarter
increased by 24.1% to RMB67.6 million
($10.5 million) from RMB54.4 million in the prior year period. Gross
margin reached 77.3%, primarily reflecting greater revenue
contribution from higher margin storage fees.
OPERATING INCOME. Operating income for the first
quarter increased 31.7% to RMB30.8
million ($4.8 million) from
RMB23.4 million in the prior year
period, driven by economies of scale, successful cost control
measures, and the sustained subscriber base growth. Operating
margin rose 260 basis points to 35.2% from 32.6% in the prior year
period. Depreciation and amortization expenses for the first
quarter were RMB7.1 million
($1.1 million).
Research and Development
Expenses.
Research and development expenses were RMB1.8 million ($0.3
million), compared to RMB1.5
million in the prior year period.
Sales and Marketing
Expenses.
Sales and marketing expenses increased by 24.9% to RMB12.6 million ($2.0
million) from RMB10.1 million
from the prior year period as the Company continued to roll-out
marketing and promotional activities in the Beijing Municipality
and Guangdong Province to further
drive greater market penetration. Sales and marketing expenses
accounted for 14.4% of revenue.
General and
Administrative
Expenses.
General and administrative expenses were RMB22.5 million ($3.5
million), compared to RMB19.5
million in the prior year period. General and administrative
expenses as a percentage of revenue dropped to 25.7% as compared to
27.1% during the prior year period, as a result of effective cost
control measures and strong revenue performance which led revenue
growth to outpace general and administrative expenses growth.
OTHER INCOME. The Company received dividend income
of RMB7.2 million ($1.1 million) in the first quarter of fiscal 2012
from the investment in Shandong Cord Blood Bank, in which the
Company has accounted for the investment under cost method.
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS. Aside
from the solid growth in operating income and the first-time
dividend income from Shandong Cord Blood Bank, the Company also
recorded a discrete tax benefit of RMB10.2
million ($1.6 million)
pursuant to the award of preferential tax treatment for the
Company's Guangdong subsidiary in
June 2011, which is effective
retroactively from January 1, 2010.
As a result, net income attributable to shareholders for the first
quarter of fiscal 2012 rose 127.6% to RMB40.0 million ($6.2
million) from RMB17.6 million
for the prior year period. Net margin for the first quarter of
fiscal 2012 was 45.8%. Basic earnings per share for the first
quarter of fiscal 2012 were RMB0.53
($0.08).
LIQUIDITY. As of June 30, 2011, the Company had cash and cash
equivalents of RMB643.1 million
($99.5 million) as compared to
RMB611.4 million as of March 31, 2011. The Company had bank loan
borrowing of RMB45.0 million
($7.0 million) as of June 30, 2011.
"We are pleased with our financial performance as we rebranded
ourselves as a "Premium Healthcare Service Provider" with a more
favorable payment method and higher price points," Ms. Zheng
stated. "We believe this new payment structure will improve our
operating cash flow and further strengthen our liquidity position.
While we continue to monitor market reactions, the initial market
response has been encouraging. We believe strong demand for our
services, coupled with our recurring revenue structure, will enable
us to continue to expand margins and deliver higher profits for our
shareholders."
Ms. Zheng concluded, "We have consistently demonstrated our
abilities to develop and penetrate the Beijing and Guangdong regions since entering into these
key markets in China. We have a
highly-scalable business model with recurring revenues that will
continue to grow in proportion to our expanding subscriber base. In
addition to enabling consistent growth, our unique model has also
created escalating margins and attractive returns. Beijing and Guangdong will provide a stable and profitable
foundation that is enhanced by additional future growth potential
as we expand into other regions in China. Our exclusive access to multiple
regions in China not only
differentiates us from our peers but also grants us access to an
addressable market of 1.8 million newborns per annum. Going
forward, we will continue to strive to enhance our operational
efficiency, expand our profit margins, deepen market penetration,
enhance brand recognition, optimize cost structure, and expand our
subscriber base in our existing markets. As a premium healthcare
services provider, our management team is confident that we will
continue to deliver long-term growth and consistent returns for our
shareholders."
Conference Call
The Company will hold a conference call at 8:00 a.m. ET on Tuesday,
August 30, 2011 to discuss its financial performance and
give a brief overview of the Company's recent developments,
followed by a question and answer session. Interested parties may
access the audio webcast through the Company's IR website at
http://ir.chinacordbloodcorp.com. A replay of the webcast will be
accessible two hours after the presentation and available for three
weeks at the same URL link above. Listeners may also access the
call by dialing 1-718-354-1231 or 1-866-519-4004 for US callers or
+852-2475-0994 for Hong Kong
callers, access code: 88154912.
About China Cord Blood Corporation
China Cord Blood Corporation is the first and largest cord blood
banking operator in China in terms
of geographical coverage and is the only cord blood banking
operator with multiple licenses. Under current PRC government
regulations, only one licensed cord blood banking operator is
permitted to operate in each licensed region and only seven
licenses have been authorized as of today. China Cord Blood
Corporation provides cord blood collection, laboratory testing,
hematopoietic stem cell processing and stem cell storage services.
For more information, please visit our website at
http://www.chinacordbloodcorp.com.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. These
statements relate to future events or the Company's future
financial performance. The Company has attempted to identify
forward-looking statements by terminology including "anticipates",
"believes", "expects", "can", "continue", "could", "estimates",
"intends", "may", "plans", "potential", "predict", "should" or
"will" or the negative of these terms or other comparable
terminology. These statements are only predictions, uncertainties
and other factors may cause the Company's actual results, levels of
activity, performance or achievements to be materially different
from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements. The information in this press release is not intended
to project future performance of the Company. Although the Company
believes that the expectations reflected in the forward-looking
statements are reasonable, the Company does not guarantee future
results, levels of activity, performance or achievements. The
Company expectations are as of the date this press release is
issued, and the Company does not intend to update any of the
forward-looking statements after the date this press release is
issued to confirm these statements to actual results, unless
required by law.
The forward-looking statements included in this press release
are subject to risks, uncertainties and assumptions about the
Company's businesses and business environments. These statements
reflect the Company's current views with respect to future events
and are not a guarantee of future performance. Actual results of
the Company's operations may differ materially from information
contained in the forward-looking statements as a result of risk
factors some of which include, among other things: continued
compliance with government regulations regarding cord blood banking
in the People's Republic of China,
or PRC; changing legislation or regulatory environments in the PRC;
the acceptance by subscribers of the Company's different pricing
and payment options and reaction to the introduction of the
Company's premium-quality pricing strategy; demographic trends in
the regions of the PRC in which the Company is the exclusive
licensed cord blood banking operator; labor and personnel
relations; credit risks affecting the Company's revenue and
profitability; changes in the healthcare industry, including those
which may result in the use of stem cell therapies becoming
redundant or obsolete; the Company's ability to effectively manage
its growth, including implementing effective controls and
procedures and attracting and retaining key management and
personnel; changing interpretations of generally accepted
accounting principles; the availability of capital resources,
including in the form of capital markets financing opportunities,
in light of industry developments affecting issuers that have
pursued a "reverse merger" with an operating company based in
China, as well as general economic
conditions; and other relevant risks detailed in the Company's
filings with the Securities and Exchange Commission.
This announcement contains translations of certain Renminbi
amounts into U.S. dollars at specified rates solely for the
convenience of readers. Unless otherwise noted, all translations
from Renminbi to U.S. dollars as of and for the first quarter
fiscal 2012 were made at the noon buying rate of RMB6.4635 to $1.00
on June 30, 2011 in the City of New York for cable transfers in
Renminbi per U.S. dollar as certified for customs purposes by the
Federal Reserve Bank of New York.
China Cord Blood Corporation makes no representation that the
Renminbi or U.S. dollar amounts referred to in this press release
could have been or could be converted into U.S. dollars or
Renminbi, at any particular rate or at all.
For more information, please
contact:
|
|
|
|
China Cord Blood
Corporation
|
|
Ms. Joeling Law
|
|
Tel: (+852) 3605-8180
|
|
Email: ir@chinacordbloodcorp.com
|
|
|
|
ICR, Inc.
|
|
In New York: Ashley Ammon De
Simone: 1-646-277-1227
|
|
In Beijing: Wen Lei Zheng:
+86-10-6583-7510
|
|
|
EXHIBIT
1
CHINA CORD
BLOOD CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March
31 and June 30, 2011
|
|
|
March
31,
|
|
June
30,
|
|
|
2011
|
|
2011
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in thousands except share data)
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
611,387
|
|
643,088
|
|
99,495
|
|
Accounts receivable, less
allowance for doubtful accounts
|
|
|
|
|
|
|
(March 31, 2011:
RMB11,850; June 30, 2011: RMB11,485)
|
77,402
|
|
79,285
|
|
12,266
|
|
Inventories
|
6,729
|
|
7,686
|
|
1,189
|
|
Prepaid expenses and other
receivables
|
9,982
|
|
45,114
|
|
6,979
|
|
Trading securities
|
-
|
|
357
|
|
55
|
|
Income tax
recoverable
|
-
|
|
8,174
|
|
1,265
|
|
Deferred tax assets
|
5,373
|
|
5,040
|
|
780
|
|
Total current
assets
|
710,873
|
|
788,744
|
|
122,029
|
|
Property, plant and equipment,
net
|
250,348
|
|
244,800
|
|
37,874
|
|
Non-current
prepayments
|
5,752
|
|
7,133
|
|
1,104
|
|
Non-current accounts receivable,
less allowance for doubtful accounts
|
|
|
|
|
|
|
(March 31, 2011:
RMB28,106; June 30, 2011: RMB30,403)
|
240,952
|
|
247,209
|
|
38,247
|
|
Inventories
|
31,600
|
|
32,389
|
|
5,011
|
|
Intangible
assets,
net
|
134,412
|
|
133,257
|
|
20,617
|
|
Available-for-sale equity
securities
|
52,733
|
|
16,688
|
|
2,582
|
|
Other investments
|
134,363
|
|
164,401
|
|
25,435
|
|
Deferred tax assets
|
2,565
|
|
3,072
|
|
475
|
|
Total assets
|
1,563,598
|
|
1,637,693
|
|
253,374
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank loan
|
45,000
|
|
45,000
|
|
6,962
|
|
Accounts payable
|
5,046
|
|
5,919
|
|
916
|
|
Accrued expenses and other
payables
|
106,731
|
|
114,026
|
|
17,640
|
|
Deferred revenue
|
82,319
|
|
80,565
|
|
12,465
|
|
Amounts due to related
parties
|
360
|
|
720
|
|
111
|
|
Income tax payable
|
11,156
|
|
6,778
|
|
1,049
|
|
Total current
liabilities
|
250,612
|
|
253,008
|
|
39,143
|
|
Deferred revenue
|
162,668
|
|
195,018
|
|
30,172
|
|
Other non-current
liabilities
|
30,036
|
|
36,795
|
|
5,693
|
|
Deferred tax
liabilities
|
26,890
|
|
26,238
|
|
4,059
|
|
Total liabilities
|
470,206
|
|
511,059
|
|
79,067
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Ordinary shares
|
|
|
|
|
|
|
- US$0.0001 par value,
250,000,000 shares authorized, 75,406,875 shares
|
|
|
|
|
|
|
and 75,261,474 shares issued and
outstanding as of March 31, 2011
and
|
|
|
|
|
|
|
June 30, 2011,
respectively
|
52
|
|
51
|
|
8
|
|
Additional paid-in
capital
|
910,316
|
|
907,161
|
|
140,351
|
|
Accumulated other comprehensive
loss
|
(18,580)
|
|
(25,129)
|
|
(3,888)
|
|
Retained earnings
|
178,993
|
|
219,015
|
|
33,885
|
|
Total shareholders'
equity
|
1,070,781
|
|
1,101,098
|
|
170,356
|
|
Noncontrolling
interests
|
22,611
|
|
25,536
|
|
3,951
|
|
Total equity
|
1,093,392
|
|
1,126,634
|
|
174,307
|
|
Total liabilities and
equity
|
1,563,598
|
|
1,637,693
|
|
253,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT
2
CHINA CORD
BLOOD CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the
Three Months Ended June 30, 2010 and 2011
|
|
|
Three months ended June 30,
|
|
|
2010
|
|
2011
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in thousands except per share)
|
|
Revenues
|
71,696
|
|
87,458
|
|
13,531
|
|
Direct costs
|
(17,252)
|
|
(19,868)
|
|
(3,074)
|
|
Gross profit
|
54,444
|
|
67,590
|
|
10,457
|
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
(1,543)
|
|
(1,777)
|
|
(275)
|
|
Sales and marketing
|
(10,090)
|
|
(12,606)
|
|
(1,950)
|
|
General and
administrative
|
(19,456)
|
|
(22,455)
|
|
(3,475)
|
|
Total operating
expenses
|
(31,089)
|
|
(36,838)
|
|
(5,700)
|
|
Operating income
|
23,355
|
|
30,752
|
|
4,757
|
|
Other income, net
|
|
|
|
|
|
|
Interest income
|
2,451
|
|
3,139
|
|
486
|
|
Interest expense
|
(606)
|
|
(460)
|
|
(71)
|
|
Exchange (loss)/gain
|
(237)
|
|
96
|
|
15
|
|
Dividend income
|
-
|
|
7,217
|
|
1,117
|
|
Others
|
114
|
|
214
|
|
33
|
|
Total other income,
net
|
1,722
|
|
10,206
|
|
1,580
|
|
Income before income
tax
|
25,077
|
|
40,958
|
|
6,337
|
|
Income tax
(expense)/credit
|
(6,110)
|
|
1,783
|
|
276
|
|
Net income
|
18,967
|
|
42,741
|
|
6,613
|
|
Income attributable to noncontrolling interests
|
(1,381)
|
|
(2,719)
|
|
(421)
|
|
Net income attributable to
shareholders
|
17,586
|
|
40,022
|
|
6,192
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
-Basic
|
0.26
|
|
0.53
|
|
0.08
|
|
-Diluted
|
0.26
|
|
0.53
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE China Cord Blood Corporation