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China Cord Blood Corporation Reports Financial Results for the Third Quarter and First Nine Months of Fiscal 2012
Date:2/27/2012

HONG KONG, Feb. 27, 2012 /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 third quarter and first nine months of fiscal year 2012 ended December 31, 2011.

Third Quarter of Fiscal 2012 Highlights

  • Revenues for the third quarter of fiscal 2012 increased by 4.8% to RMB94.8 million ($15.1 million) from RMB90.5 million in the prior year period.
  • New subscriber sign-ups and accumulated subscriber base were 12,861 and 225,418, respectively.
  • Gross profit increased by 5.2% to RMB73.1 million ($11.6 million) from RMB69.5 million for the prior year period.
  • Operating profit decreased by 9.5% to RMB31.5 million ($5.0 million) from RMB34.8 million in the prior year period, as a result of enhanced sales initiatives.
  • Net income attributable to shareholders increased by 52.5% to RMB39.5 million ($6.3 million), from RMB25.9 million in the prior year period.  This includes a tax benefit of RMB7.8 million ($1.2 million) from the Company's Beijing subsidiary and an exchange rate gain of RMB3.5 million ($0.6 million).
  • First Nine Months of Fiscal 2012 Highlights

  • Revenues for the first nine months of fiscal 2012 increased by 14.6% to RMB280.7 million ($44.6 million) from RMB244.9 million in the prior year period.
  • New subscriber sign-ups reached 39,588.
  • Gross profit increased by 15.9% to RMB217.4 million ($34.5 million) from RMB187.5 million in the prior year period.
  • Operating profit increased by 14.4% to RMB100.0 million ($15.9 million) from RMB87.4 million in the prior year period.
  • Net income attributable to shareholders increased by 57.0% to RMB102.7 million ($16.3 million) from RMB65.4 million in the prior year period.
  • "We are pleased with the solid performance in this quarter as new subscriber numbers in Beijing and Guangdong remain on track towards our full year target under the newly adopted strategy," stated Ms. Zheng, Chairperson and Chief Executive Officer of CCBC. "As we continue to recruit new subscribers under the more favorable payment option, we are essentially strengthening the Company's cash generating capabilities. The improved cash position will enable us to apply surplus cash to possibly expand our operation base and increase shareholder returns through share buy-back purchases. We have also grown our operating cash flow significantly in the first nine months, which already exceeded the operating cashflow for the full year of fiscal 2011 by a significant margin. Even with our Zhejiang operation at its start up phase, we are proud to note that both our Beijing and Guangdong operations have reported tremendous financial and operational successes."Summary - The Third Quarter and First Nine Months Ended December 31, 2010 and 2011  

     

      

    Three Months Ended

    Nine Months Ended 

    December 31,

    December 31, 

    2010

    2011

    2010

    2011(in thousands)

    RMB

    RMB

    USD

    RMB

    RMB

    USDRevenues

    90,483

    94,821

    15,066

    244,861

    280,712

    44,601Gross Profit

    69,514

    73,118

    11,618

    187,486

    217,384

    34,539Operating Income

    34,841

    31,524

    5,010

    87,390

    100,001

    15,889Net Income Attributable to Shareholders

    25,875

    39,470

    6,273

    65,444

    102,741

    16,323EPS Attributable to Ordinary Shares 
     - Basic and Diluted (RMB/USD)

    0.36

    0.54

    0.09

    0.96

    1.39

    0.22 

     

     

     

     

     

     Revenue Breakdown (%)

     

     

     

     

     

     Processing Fee

    79.2%

    72.9%

     

    79.2%

    74.0%

     Storage Fee

    20.8%

    27.1%

     

    20.8%

    26.0%

      

     

     

     

     

     

     New Subscribers (persons)

    14,765

    12,861

     

    40,877

    39,588

     Total Accumulated Subscribers (persons)

    170,189

    225,418

     

    170,189

    225,418

      Summary - Selected Cash Flow Statement Items  

     

     

      

     

     

    Nine Months Ended

    December 31, 2011(in thousands)

     

     

    RMB

    USDNet cash provided by operating activities

     

     

    251,641

    39,982Net cash used in investing activities

     

     

    (98,512)

    (15,652)Net cash used in financing activities

     

     

    (45,369)

    (7,208)Third Quarter Fiscal 2012 Financial ResultsREVENUES.  Revenues increased by 4.8% to RMB94.8 million ($15.1 million) in the third quarter of fiscal 2012 from RMB90.5 million for the prior year period, driven by the increase in recurring storage revenue as the Company's accumulated subscriber base continued to expand.

    Revenues generated from storage fees increased to RMB25.7 million ($4.1 million), up 36.7% from RMB18.8 million in the prior year period. Revenue from storage fees accounted for 27.1% of total revenues compared to 20.8% in the prior year period. This shift in revenue mix was driven by persistent growth in accumulated subscribers, leading to a broadening base, which increased 32.5% year-over-year to 225,418, as a result of continued strong demand from the Beijing and Guangdong markets.

    Revenues generated from processing fees were RMB69.1 million ($11.0 million), compared to RMB71.7 million in the prior year period, as new subscriber sign-ups decreased 12.9% year-over-year. This is consistent with the Company's strategy to encourage uptake for the new payment structure, and the reduction in volume was partially offset by the hike in processing fee that took effect in April 2011.

    GROSS PROFIT.  Gross profit for the third quarter of fiscal 2012 increased by 5.2% to RMB73.1 million ($11.6 million) from RMB69.5 million in the prior year period. Gross margin steadily edged up to 77.1% from 76.8% in the prior year period.

    OPERATING INCOME.  Operating income for the third quarter decreased 9.5% to RMB31.5 million ($5.0 million) from RMB34.8 million in the prior year period, largely due to the Company's increased investments in sales and marketing activities to ramp up market demand and build upon its ongoing sales force expansion.  Operating margin was 33.2%, compared to 38.5% for the prior year period. Depreciation and amortization expenses for the third quarter were RMB7.4 million ($1.2 million)

  • Research and Development Expenses.  Research and development expenses remained stable at RMB2.0 million ($0.3 million) compared to RMB1.9 million in the prior year period.
  • Sales and Marketing Expenses.  Sales and marketing expenses increased by 35.1% to RMB16.9 million ($2.7 million) from RMB12.5 million in the prior year period as the Company increased investments in promotional initiatives and expanded its sales forces to better penetrate its growing hospital network. Sales and marketing expenses accounted for 17.9% of revenues in the third quarter of fiscal 2012.
  • General and Administrative Expenses.  General and administrative expenses remained roughly in line with previous quarters at RMB22.7 million ($3.6 million), compared to RMB20.2 million in the prior year period. General and administrative expenses as a percentage of revenues represented approximately 24.0%.
  • NET INCOME ATTRIBUTABLE TO SHAREHOLDERS.  Net income attributable to shareholders for the third quarter of fiscal 2012 increased by 52.5% to RMB39.5 million ($6.3 million) from RMB25.9 million in the prior year period, mainly due to the discrete tax benefit of RMB7.8 million ($1.2 million) from the preferential tax treatment for our Beijing subsidiary, and a RMB3.5 million ($0.6 million) exchange rate gain during the quarter. Under the preferential tax treatment, the Beijing subsidiary is qualified for a reduced tax rate of 15% through December 31, 2013, compared to 25% in previous quarters. Net margin for the third quarter of fiscal 2012 rose to 41.6% from 28.6% in the prior year period. Basic and diluted earnings per share for the third quarter of fiscal 2012 were RMB0.54 ($0.09).

    LIQUIDITY.  As of December 31, 2011, the Company had cash and cash equivalents of RMB716.7 million ($113.9 million) compared to RMB611.4 million as of March 31, 2011. The Company had bank loan borrowings of RMB45.0 million ($7.2 million) as of December 31, 2011.

    First Nine Months Fiscal 2012 Financial ResultsFor first nine months of fiscal 2012, total revenues increased 14.6% to RMB280.7 million ($44.6 million) from RMB244.9 million in the prior year period. The increase was largely attributable to the processing fee increase effective from April 2011 and the expansion of the Company's accumulated subscriber base to 225,418 subscribers. During the first nine months, processing fees and storage fees grew by 7.1% and 43.6%, respectively. Gross profit for the first nine months of fiscal 2012 increased 15.9% to RMB217.4 million ($34.5 million) from RMB187.5 million in the prior year period. Operating income increased by 14.4% to RMB100.0 million ($15.9 million). Net income attributable to shareholders rose to RMB102.7 million ($16.3 million), reflecting contributions from the discrete tax benefits from the Beijing and Guangdong subsidiaries. Basic and diluted earnings per share attributable to ordinary shares were both RMB1.39 ($0.22).

    Ms. Zheng further commented, "Under the 'One License Per Region' policy, CCBC continues to be the largest and strongest player in the industry and strives to deepen market penetration in the Beijing and Guangdong markets, which together cover an addressable market of 1.2 million newborns per annum. We are actively pursuing the commercialization process within the affluent Zhejiang market, which will enable us to add an additional 500,000 newborns per annum to our addressable market. Our enhanced strength in cash flow generating capability will not only enable us to reward our shareholders in the long run, but also facilitate our plans to further expand in the Asia Pacific region."

    Conference Call The Company will host a conference call at 8:00 a.m. ET on Tuesday, February 28, 2012 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: 44773603.

    About China Cord Blood CorporationChina Cord Blood Corporation is the first and largest umbilical 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 StatementThis 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 periods ending December 31, 2011 were made at the noon buying rate of RMB6.2939 to $1.00 on December 31, 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.
    Mr. Rob Koepp
    Tel: (+86) 10-6583-7516

    Ms. Wen Lei Zheng:
    Tel: (+86) 10-6583-7510
    U.S. Tel: (646) 405-5185EXHIBIT 1 CHINA CORD BLOOD CORPORATIONUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSAs of March 31 and December 31, 2011  

    March 31,

     

    December 31, 

    2011

     

    2011 

    RMB

     

    RMB

     

    US$ 

    (in thousands except share data) 

     

     

     

     

     ASSETS 

     

     

     

     Current assets 

     

     

     

     Cash and cash equivalents

    611,387

     

    716,724

     

    113,876Accounts receivable, less allowance for doubtful accounts

     

     

     

     

       (March 31, 2011: RMB11,850; December 31, 2011: RMB13,873)

    77,402

     

    79,898

     

    12,695Inventories

    6,729

     

    9,115

     

    1,448Prepaid expenses and other receivables

    9,982

     

    12,110

     

    1,924Trading securities

    -

     

    335

     

    53Deferred tax assets

    5,373

     

    4,927

     

    783Total current assets710,873

     

    823,109

     

    130,779Property, plant and equipment, net

    250,348

     

    245,011

     

    38,928Non-current prepayments

    5,752

     

    6,179

     

    982Non-current accounts receivable, less allowance for doubtful accounts

     

     

     

     

       (March 31, 2011: RMB28,106; December 31, 2011: RMB36,154)

    240,952

     

    254,421

     

    40,424Inventories

    31,600

     

    33,142

     

    5,266Intangible assets, net

    134,412

     

    130,947

     

    20,805Available-for-sale equity securities

    52,733

     

    10,721

     

    1,703Other investments

    134,363

     

    163,971

     

    26,052Deferred tax assets

    2,565

     

    4,429

     

    704Total assets1,563,598

     

    1,671,930

     

    265,643 

     

     

     

     

     LIABILITIES 

     

     

     

     Current liabilities 

     

     

     

     Bank loan

    45,000

     

    45,000

     

    7,150Accounts payable

    5,046

     

    9,893

     

    1,572Accrued expenses and other payables

    106,731

     

    27,365

     

    4,348Deferred revenue

    82,319

     

    91,325

     

    14,510Amounts due to related parties

    360

     

    -

     

    -Income tax payable

    11,156

     

    4,917

     

    781Total current liabilities250,612

     

    178,500

     

    28,361Deferred revenue

    162,668

     

    268,499

     

    42,660Other non-current liabilities

    30,036

     

    52,329

     

    8,314Deferred tax liabilities

    26,890

     

    25,115

     

    3,990Total liabilities470,206

     

    524,443

     

    83,325 

     

     

     

     

     EQUITY 

     

     

     

     Shareholders' equity 

     

     

     

     Ordinary shares

     

     

     

     

     - US$0.0001 par value, 250,000,000 shares authorized, 75,406,875 shares

     

     

     

     

     and 73,196,547 shares issued and outstanding as of March 31, 2011 and

     

     

     

     

     December 31, 2011, respectively

    52

     

    50

     

    8Additional paid-in capital

    910,316

     

    866,581

     

    137,686Accumulated other comprehensive loss

    (18,580)

     

    (31,344)

     

    (4,980)Retained earnings

    178,993

     

    281,734

     

    44,763Total shareholders' equity 1,070,781

     

    1,117,021

     

    177,477Noncontrolling interests22,611

     

    30,466

     

    4,841Total equity1,093,392

     

    1,147,487

     

    182,318Total liabilities and equity1,563,598

     

    1,671,930

     

    265,643 

     

     

     

     

     EXHIBIT 2CHINA CORD BLOOD CORPORATIONUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSFor the Three Months and Nine Months Ended December, 2010 and 2011 

     

     

     

     

     

     

     

     

     

     

      

    Three months ended December 31,

     

    Nine months ended December 31, 

    2010

     

    2011

     

    2010

     

    2011 

    RMB

     

    RMB

     

    US$

     

    RMB

     

    RMB

     

    US$ 

    (in thousands except per share)Revenues

    90,483

     

    94,821

     

    15,066

     

    244,861

     

    280,712

     

    44,601Direct costs

    (20,969)

     

    (21,703)

     

    (3,448)

     

    (57,375)

     

    (63,328)

     

    (10,062)Gross profit69,514

     

    73,118

     

    11,618

     

    187,486

     

    217,384

     

    34,539Operating expenses 

     

     

     

     

     

     

     

     

     

     Research and development

    (1,906)

     

    (1,953)

     

    (310)

     

    (5,243)

     

    (5,662)

     

    (900)Sales and marketing

    (12,536)

     

    (16,930)

     

    (2,690)

     

    (34,310)

     

    (45,111)

     

    (7,167)General and administrative

    (20,231)

     

    (22,711)

     

    (3,608)

     

    (60,543)

     

    (66,610)

     

    (10,583)Total operating expenses

    (34,673)

     

    (41,594)

     

    (6,608)

     

    (100,096)

     

    (117,383)

     

    (18,650)Operating income34,841

     

    31,524

     

    5,010

     

    87,390

     

    100,001

     

    15,889Other income, net 

     

     

     

     

     

     

     

     

     

     Interest income

    2,333

     

    3,570

     

    567

     

    6,371

     

    10,021

     

    1,592Interest expense

    (671)

     

    (741)

     

    (118)

     

    (1,949)

     

    (2,391)

     

    (380)Exchange (loss)/ gain

    (43)

     

    3,484

     

    554

     

    547

     

    (1,376)

     

    (219)Dividend income

    -

     

    -

     

    -

     

    -

     

    7,217

     

    1,147Others

    219

     

    (411)

     

    (65)

     

    1,109

     

    (86)

     

    (14)Total other income, net

    1,838

     

    5,902

     

    938

     

    6,078

     

    13,385

     

    2,126Income before income tax

    36,679

     

    37,426

     

    5,948

     

    93,468

     

    113,386

     

    18,015Income tax (expense)/ credit

    (8,840)

     

    4,273

     

    679

     

    (23,062)

     

    (3,037)

     

    (483)Net income27,839

     

    41,699

     

    6,627

     

    70,406

     

    110,349

     

    17,532Income attributable to noncontrolling

     

     

     

     

     

     

     

     

     

     

       interests

    (1,964)

     

    (2,229)

     

    (354)

     

    (4,962)

     

    (7,608)

     

    (1,209)Net income attributable to 

     

     

     

     

     

     

     

     

     

      shareholders25,875

     

    39,470

     

    6,273

     

    65,444

     

    102,741

     

    16,323 

     

     

     

     

     

     

     

     

     

     

     Net income per share: 

     

     

     

     

     

     

     

     

     

     Attributable to ordinary shares

     

     

     

     

     

     

     

     

     

     

     -Basic

    0.36

     

    0.54

     

    0.09

     

    0.96

     

    1.39

     

    0.22-Diluted

    0.36

     

    0.54

     

    0.09

     

    0.96

     

    1.39

     

    0.22 

     

     

     

     

     

     

     

     

     

     

     


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    SOURCE China Cord Blood Corporation
    Copyright©2010 PR Newswire.
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