- Captures the opportunities in China's healthcare market- Further develops general hospital services
Hong Kong, Sept 4, 2014 - (ACN Newswire) - Hua Xia Healthcare Holdings Limited ("Hua Xia Healthcare," the "Company," or collectively "the Group" together with its subsidiaries; SEHK: 8143) has announced the acquisition of 100% equity interest in Jiulong Hospital Company Limited ("Jiulong Hospital"). The acquisition was through its wholly-owned subsidiary, Fuzhou Jiahui Enterprise Management Consultancy Limited ("Fuzhou Jiahui") at a total consideration of RMB 37,941,305.25 (equivalent to approximately HK$47,666,000). Jiulong Hospital is located in Zhuhai City, Guangdong Province in China and Hua Xia Healthcare had managed the hospital's operations since 2009.
Jiulong Hospital was established in September 2009, and is mainly engaged in the operation of Zhuhai Jiulong Hospital, a privately-run hospital established in the PRC, providing comprehensive hospital services including preventive care, internal medicine, surgery, obstetrics and gynecology and cosmetic surgery.
According to the acquisition agreement, Jiulong Hospital has unconditionally and irrevocably warranted and guaranteed to the Purchaser that its audited net profit after taxation and extraordinary and exceptional items for the period one year from the date of completion (the "Net Profit") will not be less than RMB4.803 million (equivalent to approximately HK$6.034 million) (the "Guaranteed Profit"). If the Net Profit is less than RMB 4.803 million, the Vendors shall compensate Fuzhou Jiahui an amount equal to: (the guaranteed profit - net profit) x 7.9. Therefore, the acquisition represents a price-to-earnings multiple of around 7.9 times of the Guaranteed Profit.
During the year ended 31 March 2014, apart from operating two general hospitals in Chongqing and Jiaxing, the Group has also managed the operations of Zhuhai Jiulong Hospital. This related business has become one of the main contributions of the Group's revenue. As part of the Group's business plans for developing its presence the healthcare industry in the PRC, the acquisition will help consolidate its revenue base. The management envisions making more diversified hospital services readily available to satisfy the needs of the public in the next few years, from treatment of common illnesses to the diagnosis and care of special and challenging diseases. Since the State Council of the PRC released its guidance on the development of the healthcare services in China on 14 October 2013, different levels of the government have embarked on more concrete measures to further implement the first stage of attracting financial and social investments from both home and abroad. One significant step has been to reduce price restrictions on private hospital services in China, providing a stimulus to expand hospital services. The latest healthcare statistics published by the government indicate that while the level of public funding to build more hospitals has remained stagnant, private hospitals have increased significantly over last year. At the same time, services provided by the private hospitals have been well recognized by the public as being supplementary to the basic services by the state-owned hospitals. The management of the Group believes that the changing healthcare industry offers ample opportunities for further expansion.
Mr. Yung Kwok Leong, Chairman and CEO of Hua Xia Healthcare, commented, "Seeing the rapid economic growth in China and public's increasing awareness of health issues, we are striving to capture the opportunities in this market by developing general hospital services. We believe the acquisition of Jiulong Hospital can provide a stable income source for the Group, as well as enhance our overall business performance from realising synergies. Looking ahead, we will continue to seek opportunities to participate in the expansion of private hospitals and the reform of public hospitals, and also strengthen the brand building by adapting affordable quality healthcare service approaches so as to help the hospitals further penetrate the fast growing healthcare market."
About Hua Xia Healthcare Holdings Limited
Hua Xia Healthcare Holdings Limited ("Hua Xia Healthcare" or the "Group") is a veteran in healthcare investment and hospital management in China. The Group is principally engaged in the provision of general hospital services and pharmaceutical wholesale, distribution and retail chain businesses in the PRC. The Group has successfully spun-off and listed the pharmaceutical wholesale, distribution and pharmaceutical retail chain businesses operated under its subsidiary Wanjia Group Holdings Limited ("Wanjia Group;" stock code: 401) on 10 October 2013, currently holding about 63.53% equity interest in that company. During the year ended 31 March 2014, the Group operated two general hospitals in Chongqing and Jiaxing and managed one general hospital in Zhuhai, principally engaged in the provision of general hospital services, including but not limited to medical wards, surgical wards, cosmetic surgery, dermatology and medical checkup and examination. For more details, please visit: www.huaxia-healthcare.com
Source: Hua Xia Healthcare Holdings Limited
Contact:
Strategic Financial Relations Limited Esther Chan Tel: (852) 2864 4825 esther.chan@sprg.com.hk Joanne Lam Tel: (852) 2864 4816 joanne.lam@sprg.com.hk Angela Ng Tel: (852) 2864 4855 angela.ng@sprg.com.hk Website: www.sprg.com.hk
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