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Public company info - Town Health International Medical Group Ltd. , 03886.HK
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Town Health International Medical Group Ltd., 03886.HK - Company Profile
Chairman Zhao Hui
Share Issued (share) 7,526,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Medical Equipment & Services
Corporate Profile Business Summary: The Group is principally engaged in (i) healthcare business investments; (ii) provision and management of medical, dental and other healthcare related services; and (iii) investments and trading in properties and securities. Performance for the year: The Group recorded revenue of approximately HK$1,128,932,000 (2018: approximately HK$1,121,736,000). The Group recorded a profit for the Year of approximately HK$10,519,000 (2018: approximately HK$85,509,000). Business Review： The city of Hong Kong faced unprecedented challenges in 2019. Weak global economy, Sino-U.S. trade conflicts and social instability across Hong Kong conspired to slow down the economy of Hong Kong. All of these factors seriously impacted the city’s tourism, retail and food and beverage industries. Not immune to the erratic transport arrangements and the public’s perceptions of the compromised personal safety as a result of the social instability, the Group’s healthcare business in Hong Kong were adversely affected and showed signs of weakness. However, leveraging its decades of medical service management experience and comprehensive service network, the Group maintained a stable revenue. Regarding business operations in Mainland China, the Group actively explored business in healthcare market in Mainland China and expanded to various operational sectors. During the Year, the new core management from China Life Group officially debuted. The new management team’s solid resources in Mainland China, deep understanding in the Mainland China market and vast management experience played an important role for the Group in strategy formulation, business development and organisation building. It also contributed a big boost to the Group’s confidence in its business development in Mainland China. Trading Suspension and Recent Development of Trade Resumption As of the date of this announcement, trading in the Shares remains suspended. As disclosed in the Company’s announcement dated 10 January 2020, the Stock Exchange held discussions with the SFC and confirmed that the Stock Exchange would, until further notice, withhold exercising its right to delist the Company under Rule 6.01A(2)(b)(i) of the Listing Rules should trading in the Company’s securities remain suspended on 31 January 2020. The above is without prejudice to the Stock Exchange exercising its rights under Rule 6.01A of the Listing Rules at a later stage when the Stock Exchange considers appropriate. The Company will continue to communicate with the SFC and will seek to resume trading of the Shares on the Stock Exchange. However, the Company at this stage is unable to set a definite time frame for trading resumption. Town Health will continue to keep the Shareholders and potential investors informed of updates on the matter. Healthcare Service Network of the Group As of 31 December 2019, the Group had 475 service points covering a range of healthcare services, including 275 general practice service points, 79 specialist service points, 24 dental service points and 97 auxiliary service points. As of 31 December 2019, the Group employed 737 doctors, dentists and auxiliary service staff (including 419 general practitioners, 216 specialists, 42 dentists and 60 auxiliary service staff), all of whom provided healthcare services via the Group’s network of self-operated and affiliated healthcare centres. Business in Hong Kong Managed Care – Vio In 2019, managed care business maintained a stable revenue and recorded a net profit. The ongoing social instability in the fourth quarter of 2019, which once affected the service hours of the Group’s affiliated healthcare network, imposed downward pressure on the managed care business. While revenue in the first three quarters of 2019 still maintained growth compared with the same period in 2018, the fourth quarter of 2019 dragged down the overall performance. Nevertheless, leveraging Vio’s efficient operational management and budget controls, the managed care business recorded a stable income and a net profit. During the Year, Vio upgraded its internal IT management system, enabling it to efficiently manage more than 600 affiliated doctors and implement a series of processes ranging from diagnosis to invoicing. The improved functions of such system has effectively reduced the number of administrative duties performed by affiliated doctors and medical assistants on Vio’s platform. Meanwhile, more than 100 self-operated medical centres of the Group have joined the healthcare network managed by Vio, allowing Vio to provide a wider range of services across a larger service area. The synergy between Town Health and Vio contributed to the sustainable growth of the managed care business. The revenue generated from the Group’s managed care business in 2019 amounted to approximately HK$477,251,000 (2018: approximately HK$467,802,000), and accounted for approximately 42.27% of the Group’s revenue for the Year (2018: approximately 41.70%) while the net profit margin remained relatively stable. Self-Operated Clinic Chain During the Year, the Group operated a total of 51 general practice medical centres, 42 specialist centres and 13 dental centres. The Group’s self-operated clinic chain business maintained stable revenue over the same period in 2018. Mainly attributable to the unstable traffic conditions caused by social unrest, the service hours and the number of patients had been greatly affected. The Group has for years devoted to providing specialist services, and has continually expanded its excellent medical team and range of services, which has acquired a good reputation among its customers. During the Year, the Group’s new cardiology specialist centre in Yuen Long recorded growth in revenue while the Hong Kong Cardiac Diagnostic Centre in Tsim Sha Tsui, and the gastroenterology & hepatology specialist centre, the ENT specialist centre and the orthopaedics specialist centre at the Champion Building in Jordan all achieved satisfactory results. At the same time, the Group began to cooperate with large insurance companies and its self-operated orthopaedics and cardiology specialist centres to join the medical service networks of the insurance companies, gradually implementing the service of direct payment of medical expenses by medical insurance. Furthermore, more than 100 self-operated medical centres of the Group have joined the healthcare network managed by Vio. Through the medical schemes administered by Vio, the Group provides healthcare services to medical card holders, which in turn helps the Group increase market penetration of its healthcare services and enlarge its clientele, resulting in the long-term sustainability of its business. The revenue generated from the general practice services, specialist services and dental services of the Group for the Year amounted to approximately HK$486,344,000 (2018: approximately HK$512,689,000), and accounted for approximately 43.08% of the Group’s revenue for the Year (2018: approximately 45.70%). Medical Beauty Business Despite of being negatively affected by the ongoing social instability in Hong Kong during the second half of 2019, with great demand for beauty services in Mainland China, the Group’s medical beauty business segment – TBM, recorded a double-digit percentage of growth in revenue when comparing with the same period in 2018. During the Year, TBM opened a beauty centre in Shanghai K11, a prestigious commercial centre in Shanghai. The unveiling of the new centre served to solidify the position of TBM brand in the mid-to-highend market and helped bolster its brand image of ‘strength, professionalism and reliability’, and enhanced service experience of customers. TBM also opened another beauty centre in the high-end commercial district of Nanshan district of Shenzhen, providing beauty care and medical beauty services. This twin-centre business model makes TBM’s skin management services more comprehensive and accessible to its customers while the referral of beauty care to medical beauty services enhances the cross-selling effect. Furthermore, TBM runs a one-stop health management centre in Tsim Sha Tsui acquired from the Group, with the aim of providing mid-to-high-end family customers with one-stop health management and medical beauty services, including comprehensive healthcare services such as vaccinations, health check, health assessments, skin management and anti-ageing, and post-health check management. In the future, TBM will solidify its position in the mid-to-high-end family market, and focus on establishing a one-stop health management centre model of health management plus skin management. During the Year, TBM employed 11 full-time or part-time doctors, and had 9, 5 and 4 centres in Hong Kong, Shenzhen and Shanghai, respectively. During the Year, TBM’s revenue amounted to approximately HK$328,361,000 (2018: approximately HK$289,443,000). Business in Mainland China Hospital Management and Consulting Services Business in the PRC During the Year, Nanshi Hospital, managed by the Group’s Nanyang Xiangrui, achieved excellent results in all aspects. Nanyang Xiangrui provided Nanshi Hospital with comprehensive management services, including property management, supply chain management, marketing and information system management, which succeeded in elevating the overall business performance of Nanshi Hospital in 2019. Nanshi Hospital’s revenue from healthcare services for the Year maintained a double-digit percentage of rapid growth. Benefitting from Nanshi Hospital’s remarkable performance, Nanyang Xiangrui’s management revenue increased by a double-digit percentage, also being a clear reflection of the Group’s outstanding competitive edge in hospital management business. During the Year, Nanshi Hospital was granted the ‘five-star’ status for its operational capability by the Chinese Non-government Medical Institutions Association, and became the first non-government hospital in Nanyang City to be granted such honour. Nanshi Hospital has established its authoritative position in cerebrovascular disease treatments. According to the ranking published by related department of the National Health Commission in April 2019, Nanshi Hospital ranked first nationwide in terms of thrombolytic therapy in the national comprehensive stoke centres, and eighth nationwide in terms of comprehensive operational capability. In December 2019, Nanshi Hospital was awarded the honour of ‘Comprehensive Stroke Centre’. Nanshi Hospital also strove hard to meet the national requirements for health insurance cost controls, and confined medicine use to under 30% progressively which was the best level in the industry. These measures were recognised by both the Healthcare Security Administration and the Health Commission. Nanshi Hospital continued to strengthen its medical disciplines during the Year, forming strong specialities, including cardio-cerebral vascular centre. Nanshi Hospital also invited experts from all over the country to hold talks and exchange experience at Nanshi Hospital to continually enhance its level of medical skills. The rehabilitation branch of Nanshi Hospital officially came into service in September 2019 with a total floor area of 5,500 sq.m., accommodating 110 beds, an inpatient care area, three modern medicine rehabilitation therapy departments and one traditional Chinese medicine rehabilitation therapy department. At present, the daily visits of the rehabilitation branch is over 700. Nanshi Hospital’s rehabilitation medicine discipline has become a provincial key training medical discipline in Nanyang City, which is a clear indication that the rehabilitation medicine discipline of Nanshi Hospital has attained the highest standard in the industry. Furthermore, with the topping-out ceremony concluded in December 2019, the new inpatient block with a total floor area of 84,000 sq.m. of Nanshi Hospital will continue the internal decoration works and is expected to be operational in early 2021 to meet the growing local demand for medical care. In 2019, Henan Ruishi Ophthalmology Hospital also came into service. The hospital, owned and managed by Nanyang Xiangrui, is located in a high-end commercial centre with high pedestrian flow in the centre of Nanyang City with a total floor area of 3,000 sq.m. The hospital specialises in ophthalmology and optometry and has established six ophthalmology sub-specialities. It has introduced specialists from the Ophthalmology Centre of Beijing University to provide expert technical support for ophthalmic treatment and is equipped with the VisuMax femtosecond laser from ZEISS for refractive surgery. The hospital is striving to become a ophthalmology hospital in Nanyang City with top-notch technology, comprehensive services and most advanced facilities. High-end Medical Diagnostic and Health Check Business During the Year, the Sixth Hospital’s medical diagnostic centre managed by Yikang, a subsidiary of the Company, generated excellent results, especially in the areas of health check and laboratory testing which both reported double-digit percentage of growth in revenue. Yikang also showed remarkable growth in revenue and net profit from its management business. During the Year, Yikang successfully signed a supplemental cooperation agreement with the Sixth Hospital. According to the supplemental cooperation agreement, Yikang would continue to manage the medical diagnostic centre of the Sixth Hospital until 2028, and charge a fixed management fee and commission based on a certain percentage of revenue, on a yearly basis. It is expected that the management fee and the commission will provide a steady source of income for Yikang in the future. Furthermore, Yikang, along with Shanghai United Imaging Smart Medical Investments and Management Co., Ltd. and Guangdong Dixon Industrial Investments Co., Ltd., was planning to build a large medical diagnostic centre in Zhongshan City, Guangdong Province, with a floor area of 6,000 sq.m. The proposed medical diagnostic centre will have health check centre, specialist outpatient clinic and health management centre to provide one-stop healthcare services, and to continue to devote to the medical market in the Greater Bay Area. Clinics Business in Mainland China Ganghe Clinic, the Group’s clinic located in the central area of Futian District, Shenzhen with a total floor area of 600 sq.m. came into service in early 2019. Ganghe Clinic mainly provides services in general medicine, surgery, gynecology and health management. Ganghe Clinic is also equipped with a distinctive program – lifecycle health management for women, which includes endocrine therapy and laser therapy. Ganghe Clinic invited Dr. Liang Xiaoyan, a renowned gynecologist in Guangzhou, and her medical team to provide high-end endocrine therapy services. Furthermore, Ganghe Clinic works closely with the Shenzhen branch of China Life Group, to establish post-health check services system for China Life Group’s high-end VIP clients, including doctor referrals, specialist clinic, post-health check health management and doctors to provide customised health consultation solutions. ‘Green Lane’ services are also available at Ganghe Clinic. Ganghe Clinic is connected with a specialist team of more than 200 top specialists from hospitals in Guangzhou, Shenzhen and Hong Kong which provides solid technical backup for the clinic’s development. Mainly due to the suspension of Invisalign training, the overall revenue of Yamei suffered a slight decline comparing with the same period in 2018. Yamei provides comprehensive dental services and strives to develop Invisalign orthodontics as its distinctive service with competitive edge. Yamei actively invested resources in popular science and charitable activities including promotion of public oral health and pediatric dental examinations to build its brand name. The branding campaign has succeeded in earning Yamei ‘Five Stars’ customer service rating from DianPing.com, and has turned it into one of the most popular listed service providers in Hangzhou. Chain Health Management Centres Business Located at the China Life Centre in Jinan City, Shandong Province, China Life Town Health International Health Management Centre with a total floor area of 2,800 sq.m. came into service in 2019. The centre has several specialist departments, including general practice, surgery, gynecology, ophthalmology, oral and maxillofacial surgery, and medical beauty. It is also equipped with a wide range of advanced health check facilities. Dietitians and health consultants are also on hand to provide services to complement the one-stop health management services at the centre. In addition, the centre strengthened its partnership with China Life Group and jointly launched a series of activities, among which China Life Group’s ‘Kai Men Hong’ sales event attracted 2,000 customers to the centre for health check services. Through its high quality, value-added healthcare services, the centre bolstered China Life Group’s insurance agents’ ability to win the trust of their customers resulting in China Life Group’s remarkable feat of signing a significant amount of new insurance polices during the event. This synergy is a successful case to the feasibility of the new ‘insurance plus healthcare’ model, and also a significant milestone in the Group’s development of ‘insurance plus healthcare’ strategy. Other investments As at 31 December 2019, the Group held approximately 17.67% of HCMPS with an investment amount of approximately HK$86,585,000. HCMPS and its subsidiaries are principally engaged in the provision of contract-based medical schemes for integrated medical and healthcare check-up services. Based on the latest unaudited combined financial information for the year ended 30 September 2019 of HCMPS, it recorded a profit of approximately HK$17 million. The Group is of the view that the ageing population and the increasing demand for corporate medical solutions services in Hong Kong are favourable to the continuing development of HCMPS’s business. As at 31 December 2019, the Group’s investment in HCMPS constituted approximately 88.93% of the balance of equity instruments at fair value through other comprehensive income. As at 31 December 2018, the Group owned 7,707.27 shares in Heemin Capital – Class A Shares with an aggregate subscription price of approximately US$7,884,000 (equivalent to approximately HK$61,103,000) and the Group’s investment in Heemin Capital constituted approximately 85% of the balance of the financial assets at fair value through profit or loss. Heemin Capital is principally engaged in global fund investment. As at 31 December 2019, the Group had redeemed all the shares in Heemin Capital and recorded a gain of approximately HK$4,858,000. The Group prudently and carefully selects promising investments which are duly assessed and analysed by the senior management team of the Group. After taking into account future business prospects and the respective financial performance of the various investments, as at the date of this announcement, the Group intended to continue holding the remaining investments in its present portfolio. Prospects: The outbreak of the coronavirus (COVID-19) has imposed tremendous impact on the economy and social well-being in Mainland China, Hong Kong and worldwide since the beginning of January 2020. Business of the Group is anticipated to be adversely impacted in the shortterm, and the results for the first half of the year was dragged down by this sudden epidemic. However, after the outbreak is over, medical demand will be gradually released, health and hygiene awareness of the citizens will generally be enhanced, and the demand for quality medical services is always with high rigidity. The Group expects to maintain a steady development. The Group has always been confident in the medium to long-term development of the medical and health industry. Apart from responding flexibly to market changes, the Group will adopt more forward-looking measures as a long-term development plan. While striving to maintain its development in the Hong Kong healthcare business, the Group will continue to devote to the healthcare market in Mainland China. The healthcare services market in Mainland China is expected to have a bright future because of the acceleration of population aging, growing gross national income (GNI), heightened public awareness of health, and a growing demand for high-end healthcare services. As the first Hong Kong healthcare enterprise to manage a large 3A-grade hospital in Mainland China, the Group will leverage its medical operation management prowess, rich practical experience gained over years and excellent medical team to further expand its business operations in the healthcare market in Mainland China. Also, with the backing of China Life Group’s robust strength, and vast management experience and resources of the new management from China Life Group, the Group has every confidence in its business sustainability and ability to continue to stay at the forefront of the industry. Hong Kong In terms of managed care business, Vio will continue its medical management service contracts with large enterprises and insurance companies, and will actively expand the scope of its services and increase high value-added services in order to further maintain the company’s profit margin. Vio will also continue to invest in the upgrading of its IT management system to further improve the management efficiency. Regarding its self-operated clinic chain, the Group will continue to actively expand its healthcare service network and attract more professional medical staff. On the basis of costeffectiveness, the Group will open more medical centres in the densely populated areas of Hong Kong in order to enhance the Group’s competitiveness and create sustainable business strategies. The Group will further expand the scale of its orthopaedic specialist centres by expanding the area of its Kwun Tong orthopaedic specialist centre. Meanwhile, the Group will open a new orthopaedic magnetic resonance imaging centre to achieve synergy with the orthopaedic diagnoses and treatment. The Group’s orthopaedic specialist centres will strive to become a sizeable and comprehensive chain of orthopaedic medical centres in Hong Kong. Furthermore, under the Private Healthcare Facilities Ordinance (Chapter 633 of the Laws of Hong Kong) introduced by the Hong Kong Government, the premises where registered medical practitioners and registered dentists practise including day procedure centres will be required to obtain licenses or letters of exemption to safeguard the interests and rights of the patients. The Group’s existing two ophthalmic day procedure centres will apply for the said license to conform to the requirements of such ordinance. With the strict policy regulations, large medical groups will usher in new opportunities for long-term healthy development. In terms of scale, the Group’s specialist service network is one of the largest of its kind in Hong Kong with the greatest number of comprehensive services and the most doctors. Specialist services will continue to be the focus of the Group’s future development. The Group will also continue to expand its cooperation with the large insurance companies. In addition to orthopaedics and cardiology, the goal is to include other specialist services into the insurance companies’ service networks so that comprehensive healthcare services can be provided to insurance customers, and the service of direct payment of medical expenses by medical insurance can be implemented. The Group will explore Mainland China market with a focus on the Greater Bay Area. The favourable medical policies of the Greater Bay Area will open new avenues for Hong Kong specialists of different medical disciplines to develop Mainland China market and provide high-end customers with premium healthcare services in line with international standards and facilitate Mainland China customers to seek medical consultations or diagnoses. The Group is also capable of arranging the Mainland China customers to visit Hong Kong for further treatment if they require surgeries. In the future, the Group will launch more indepth cooperation with China Life Group’s Mainland China companies, and develop medical tourism services aiming at high-end Mainland China customers, and achieve mutual access of medical resources between China and Hong Kong. Regarding medical beauty business, TBM will explore new marketing channels through new media to elevate its brand recognitions and overall reputation. In addition to maintaining steady business development in Hong Kong, TBM will vigorously expand the medical beauty business in Mainland China. TBM plans to set up three new centres in Guangzhou, and one in Shanghai. As the present centre in Shanghai can no longer meet the hugh customer volume, the new Shanghai centre will be set up in a high-end business district in order to build a brand image and take advantage of economies of scale. In the future, TBM will review the situation and on the basis of cost-effectiveness, open new comprehensive skin management centres in Mainland China to provide beauty care and medical beauty services in the hope that the twofold service model will create synergetic effects, and stimulate cross-selling. Since the launch time of high-energy beauty equipment in Hong Kong coincides with Europe and the United States, and ahead of Mainland China, the Group expects to vigorously attract customers from the Greater Bay Area to enjoy medical tourism services in Hong Kong when the new coronavirus epidemic is over. Mainland China As an active response to the PRC government’s favourable policies of encouraging Hong Kong-funded healthcare institutions to establish medical practices in Mainland China, the Group will seize the opportunity, and, by making good use of its experience and strengths, introduce Hong Kong’s comprehensive triage system into China, aiming to become a benchmark for Mainland China’s healthcare industry. Regarding hospital management, the pharmaceutical company established by Nanyang Xiangrui has officially obtained the approval of the Medical Products Administration and will formally be established in early 2020. Nanyang Xiangrui will thereby further expand its business scope and provide services related to procurement of pharmaceutical products for Nanshi Hospital, and is expected to become a new revenue growth point for Nanyang Xiangrui. Meanwhile, Nanshi Hospital will further strengthen the setting up of medical disciplines and has joined forces with tertiary academic institutions including Nanyang Medical College and Henan University in respect of education and teaching, and student training and the like to pool the top talents for the hospital. Nanshi Hospital will also continue to organise medical exchange programmes and invite medical experts from across the country to lead the programmes in an effort to promote integration of medicine, education and research. Moreover, the new hospital block of Nanshi Hospital is expected to come into service in early 2021. During the same period, the overall environment of the old hospital block will be optimised and reconstructed simultaneously. The whole area of the hospital will be re-planned and the decoration and transformation of the external hospital area and the internal environment will be gradually carried out to provide patients with a better environment for medical treatment, and boost the number of outpatient visits. In mid-2019, the PRC government launched the Diagnosis Related Groups (DRG) policy and identified 30 DRG payment pilot cities. Nanshi Hospital will actively conform to the new national policy and will regulate its management procedures. In terms of high-end medical diagnostic and health check business, Yikang’s large medical diagnostic centre invested in Zhongshan City, Guangdong Province is expected to come into service in end 2020 providing medical diagnostic, health check, specialist outpatient clinic and health management services. The centre will be managed by a team set up by Yikang, and management staff will be stationed there to provide management advice. Meanwhile, Ganghe Clinic from Shenzhen will in the future identify business partners, explore online marketing channels, actively develop market, and develop customer groups. Regarding the chain health management centre business, the Group will deepen its cooperation with China Life Shandong, and will provide China Life Shandong’s VIP customers with health risk assessment services. Through comprehensive scientific analyses and assessments of customers’ lifestyles, occupations, health check data and biomarkers, the Group will digitise customers’ health indicators, all in an effort to customise personalised health check packages based on different data, and give insightful advice on health management to customers. The above efforts make the Group’s centre stand out from the general health check centres’ “disease-diagnosis” health check services. Meanwhile, the centre will focus on the development of four services, namely: ‘dietary management’, ‘sport and exercise management’, ‘chronic disease management’ and ‘Green Lanes of medical partnerships’, for the purposes of giving personalised advice on diet and exercise in order to establish a complete and intimate health management system. The health management centre has also signed medical network cooperation agreements with Yikang, Jinan Central Hospital and specialists from Hong Kong to build medical network ‘Green Lanes’. In the future, the centre will also actively expand dental services to provide customers with orthodontic services and dental restoration services, and recruit expert doctors from across the country to enhance the centre’s reputation, and enlarge its customer base and income source.

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