Hua Xia Healthcare posts third quarter profit of HK$43.6mn

The group’s acquisition of Huihao Group has become its significant income stream driver which continues to deliver satisfactory results.

Hua Xia Healthcare Holdings Limited (“Hua Xia Healthcare”, (the “Company”, or collectively “the Group”) on Tuesday announced its third quarter results for the nine months ended 31 December 2010.

The Group continues to record strong growth in both turnover and profit since the acquisition of its pharmaceutical wholesale and distribution and pharmaceutical retail chain businesses in the PRC last year. During the period under review, the Group’s turnover amounted to approximately HK$1,096.4 million (2009: approximately HK$98.5 million), an eleven-fold increase. Profit attributable to owners of the Group reached a record high of approximately HK$43.6 million (2009: net loss of approximately HK$0.3 million), thanks to the expansion of its pharmaceutical wholesale and distribution and pharmaceutical retail chain businesses in the PRC. Basic earnings per share were HK4.46 cents. (2009: basic loss per share of approximately HK0.10 cents).

Mr Yung Kwok Leong, Chairman and CEO of Hua Xia Healthcare, commented, “I’m very pleased to report the steady growth of our businesses since the strategic acquisition of Huihao Group. This has become our pharmaceutical arm and significant income stream driver which continues to deliver satisfactory results matching the management’s expectations. Looking ahead at the year 2011, we intend to maintain our core healthcare and pharmaceutical businesses in the PRC and continue to expand our pharmaceutical distribution and retail business.”

Pharmaceutical Wholesales, Distribution and Pharmaceutical Retail Chain Businesses The Group engages in the wholesale and distribution of a broad range of pharmaceutical products to hospitals, clinics and pharmacies in Fujian Province. Its pharmaceutical retail chain operation is also in the leading position within Fujian Province in both retail drug store numbers and comprehensive competitiveness. The turnover contributed by this segmental business amounted to HK$1,014.2 million (2009: Nil), more than 92.5% of the Group’s total turnover, according to a Hua Xia report.

General Hospital Services and Healthcare and Hospital Management Services
During the period under review, the Group has two general hospitals operating in Chongqing and Jiaxing cities which are principally engaged in the provision of general hospital services. The Group also provides healthcare management and training and consultancy services for hospitals. This segmental business reported a turnover of HK82.2 million (2009: approximately HK$98.5 million), representing about 7.5% of the Group’s total turnover.

Prospects
Looking ahead, the strong economic growth and increasing healthcare expenditures in the PRC spurred by greater public awareness of health issues on top of the Government’s healthcare reform policy are major drivers of the greater demand for quality hospital services and affordable pharmaceutical products. The Group remains optimistic about the promising prospects within the healthcare and pharmaceutical sectors for the long run in the PRC.

The management believes that the implementation of the healthcare reform measures, including the Government mandated improvement of healthcare standards on a national basis, will lead to greater co-operation between hospital management enterprises and distributors of pharmaceutical products in the PRC. This likely development would thus increase the business opportunities for the Group as a whole.

“To realise these greater opportunities, we will continue to optimise the synergies among our core healthcare and pharmaceutical businesses. Meanwhile, we are considering future investments in or co-operation with healthcare and pharmaceutical enterprises in the PRC through a variety of acquisition means, such as integrating hospitals and streamlining resources, thereby more effectively expanding our healthcare and pharmaceutical businesses.” Mr. Yung concluded.