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Public company info - TATA Health International Holdings Limited , 01255.HK

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TATA Health International Holdings Limited, 01255.HK - Company Profile
Chairman Yang Jun
Share Issued (share) 214,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Footwears
Corporate Profile Business Summary: The Company is principally engaged in the trading of footwear products and healthcare products, and provision of financial services and online medical services. Performance for the year: Revenue of the Group’s businesses for the Year was HK$341.8 million, representing a 4.5% decrease from HK$358.0 million for the even year of 2018. The gross profit (gross profit equals to revenue minus cost of goods sold) of the Group for the Year was HK$199.5 million, representing a decrease of 9.5% from HK$220.5 million of the year of 2018. Gross profit margin of the Group for the Year was 58.4% (2018: 61.6%). The Group’s loss before taxation for the Year was HK$67.4 million, as compared to profit before taxation of HK$6.6 million for the year ended 31 December 2018. Business Review Footwear Business Revenue of the Group’s footwear business for the Year was HK$270.1 million, representing a 20.1% decrease from HK$337.9 million of the even year of 2018. We had recorded a same store sales decline of approximately 12.3% during the Year (2018: 2.0%). This was mainly due to weak retail climate in Hong Kong, as a result of the decline in the number of visitors to Hong Kong and more cautious local consumer sentiment amid the uncertain economic conditions and ongoing social activities. Healthcare Business According to the Business Wire Research, the nutritional supplement market in China is expected to reach US$40 billion by 2023, representing a compound annual growth rate (CAGR) of 14%. A report issued by Roland Berger, a consulting firm, concluded that China may soon overtake the USA as the most significant nutritional supplement market in the world. Factors such as increasing health-conscious behaviour, rising incidence of lifestyle diseases, China’s growing GDP per capita, shifting trends towards preventive healthcare, use of botanicals due to its medicinal benefits and growth in the use of e-commerce have contributed to the demand for nutritional products. Meanwhile, per recent research by William Reed Business Media, a leading B2B media company, Australia accounts for approximately 22.3% of all supplements and health foods imported into China, taking the top spot from the USA, which had a market share of 20.4% in 2018. According to the report from global consultancy Deloitte, the cross-border channel in China saw a CAGR of 76% between 2015 and 2018, while generating approximately RMB78.5 billion in gross merchandise volume (GMV) during the Year, representing approximately 2.2% of China’s online retail sales. With a full understanding of this huge market opportunity and the excellent performance of Australian brands in the Chinese market, the Group continuously expanded its investment in the healthcare business with the addition of new e-commerce platforms and partnerships with mainstream healthcare product brands in Australia. With further investment, we will progressively build a comprehensive marketing channel and industry chain for appealing natural healthcare products. Along with the rapid development of the industry, the healthcare business segment is playing a role as one of the key businesses of the Group to bring in a new source of profit growth, with a prospective turnaround of profit in 2020. Revenue of the Group’s healthcare business for the Year was HK$51.6 million (2018: HK$1.1 million), while a segment loss for the Year was HK$3.2 million, which was mainly due to increasing investment in promotion and marketing channels. Financial Services Business The operating revenue of DSG Asset Management (Cayman) Company Limited and DSG Finance Holdings (Hong Kong) Limited (collectively referred to as the “DSG Group”) derives from: (i) advisory services in securities; (ii) investment management services; and (iii) advisory services in corporate finance. During the Year, the DSG Group recorded revenue and a segment loss in the amount of HK$20.2 million and HK$30.1 million, respectively, which was mainly due to the write down of its material goodwill arising from the acquisition of the DSG Group (the “goodwill write down”) according to the estimated valuation analysis on the financial services business segment of the Group carried out by a third-party organization, in accordance with the applicable accounting standards. The amount of goodwill write down was HK$27.1 million. The Board would like to emphasize that the goodwill write down was one-off and a non-cash item, and had no effect on the cashflow of the Group. Online Medical Services Business During the Year, with the support of the favourable policies in the PRC, the Group recognised the tremendous potential in the healthcare business market and has increased its investments in this regard. The Group incorporated a joint venture company (the “JV Company”), which was principally engaged in hospital management, health management consulting, medical technology and internet technology in the PRC, in May 2019, and through the JV Company, acquired the entire equity interests in Shangying Medical, a company which obtained the internet hospital license in Shanghai, in August 2019. Shangying Medical will continue to focus on building a one-stop internet hospital platform driven by big data in the healthcare industry that can deliver an integrated suite of services. Through the JV Company and Shangying Medical, the Group entered into various agreements with third parties, such as major hospitals affiliated to universities in Shanghai, financial institutions and pharmaceutical companies in order to accelerate the development of its online medical services business in the PRC. For further details of the development of the Group’s online medical services business, please refer to the announcements of the Company dated 8 May 2019, 3 June 2019, 3 October 2019, 29 October 2019, 7 November 2019 and 14 November 2019, respectively. There was no revenue generated from the Group’s online medical services business for the Year (2018: Nil), while a segment loss for the Year was HK$10.0 million, which was mainly due to the short operation period of this business and high start-up costs. Prospects: In 2019, according to the statistics from the Tourism Board, due to the disturbance caused by the revision of the Extradition Bill, the overall number of visitors in the second half of the Year recorded a decline of 39.1%, and the total number of visitors during the Year fell by 14.2%, which impacted the retail business of footwear industry seriously. The Group will continue to face tremendous operation pressure from this traditional footwear business, and will cautiously run this business. Further, since the outbreak of the 2019 Novel Coronavirus (“COVID-19”) pandemic in early 2020 in China and around the world, the Group has actively taken measures to implement the regulations and requirements issued by the local governments on COVID-19 prevention and control. The Group will also continuously evaluate the development of the COVID-19 situation and its impact on the financial position and operations of the Group. Due to the decline of economic expectation caused by the external environment, in accordance with the principle of prudence and applicable accounting standards, the Group recognised the goodwill write down generated from the acquisition of the DSG Group according to the estimated valuation analysis on the financial services business segment of the Group carried out by a third-party organization. Nonetheless, the goodwill write down had no impact on the cashflow of the Group. In response to the economic downturn, the Group actively expanded its Singapore market and optimized resources through internal restructuring of its financial services business sector at the end of the Year, further strengthening business cooperation with other business sectors of the Group to achieve synergy and sustainable growth. With regard to its healthcare business and online medical services business, the Group is currently at the critical period of its strategic transformation. A new business framework established upon its online medical services business and healthcare business is beginning to emerge, and a transformation to the Group will be carried out by utilizing the internet model, so as to realize a collaboration between its online and offline modes. Thus, the online medical services business and healthcare business will become important pillars of the Group, and the Group will transform itself gradually and form an industry chain of big health, and generate a better return for the shareholders of the Company. Since 2018, the Group has diversified its business operation through acquisitions. The Group will continue to integrate the businesses of footwear, financial services, healthcare and online medical services to rationalise its structure of business segments, and will continue to look for strategic partnerships in the health sector to build up a healthy business ecosystem, and create sustainable value to its shareholders.

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