China Cord Blood
Corporation ("CCBC" or "the Company") (NYSE: CO), China's leading provider of
cord blood collection, laboratory testing, hematopoietic stem cell processing,
and stem cell storage services, today announced unaudited financial results
for the third quarter and first nine months ended December 31, 2009.
Highlights
-- Net revenue in the third quarter of fiscal 2010 increased 23.5%
year-over-year to RMB68.9 million (USD10.1 million) from RMB55.8
million in the third quarter of fiscal 2009.
-- New subscriber sign-ups during the third quarter of fiscal 2010
increased 19.6% to 11,771 subscribers from 9,842 in the third quarter
of fiscal 2009.
-- Net income attributable to shareholders in the third quarter of fiscal
2010 increased 56.3% to RMB20.0 million (USD2.9 million) from RMB12.8
million year-on-year.
-- Net revenue in the first nine months of fiscal 2010 increased 38.5% to
RMB190.7 million (USD27.9 million) from RMB137.7 million last year.
-- New subscriber sign-ups during the first nine months of fiscal 2010
increased 36.1% to 33,523 subscribers from 24,631 in the first nine
months of fiscal 2009.
-- Net income attributable to shareholders for the first nine months of
fiscal 2010 increased to RMB33.0 million (USD4.8 million) compared to
RMB0.6 million in the first nine months of fiscal 2009.
-- On February 24, 2010, CCBC entered into agreement to acquire an
effective interest of 19.92% in the Shandong Cord Blood Bank ("SCBB"),
the exclusive cord blood bank operator for the Shandong province in
China. Inclusive of the latest acquisition, the Company has gained
exclusive strategic access into the Beijing municipality, Guangdong
province and Shandong province, namely three of the six licenses issued
by Ministry of Health of China. China Government adopts one license
per region policy which means license holder will be the exclusive
operator providing cord blood services in these markets.
"This is a very exciting time," said Ms. Ting Zheng, China Cord Blood
Corporation's chairperson and chief executive officer. "We concluded the third
quarter with remarkable results with record breaking new subscribers numbers.
The robust performance reflected the team capabilities to deepen market
penetrations in our existing markets in an effective, efficient and lucrative
manner. Leveraging the rising acceptance of umbilical cord blood banking,
China's single child policy and our dominant market presence, we expect our
business will continue to flourish and we should capture a growing number of
new subscribers."
"Also, our Group has made tremendous progress to expand our geographical
reach following the recently announced Shandong acquisition. By acquiring a
19.92% equity interest and the right of first refusal, we open the doorway
into Shandong province, which has approximately 1.1 million babies per annum.
Together with our local partner, we will seize this opportunity and deploy our
resources and market expertise to rapidly build out a significant presence in
this affluent region of China. Beijing, Guangdong and Shandong together have a
market size of 2.1 million new born babies per annum."
Third Quarter Fiscal 2010 Financial Results
Net revenue for the third quarter of fiscal 2010 increased 23.5% to
RMB68.9 million (USD10.1 million) from RMB55.8 million in the third quarter of
fiscal 2009. Net revenue generated from processing fees increased 18.1%
year-over-year to RMB56.1 million (USD8.2 million), tracking a 19.6% increase
in new subscribers to 11,771 from 9,842 from last year. Net revenue from
storage fees increased 60.8% year-over-year to RMB12.7 million (USD1.9 million)
from RMB 7.9 million on the back of a 58.9% increase in the total subscriber
base to 117,583 subscribers, compared to 74,013 subscribers last year.
Processing fees and storage fees for the third quarter of fiscal 2010
accounted for 81.4% and 18.4% of net revenue, respectively, compared to 85.2%
and 14.1% for the prior year period.
For the third quarter of fiscal 2010, gross profit increased 23.7% to
RMB52.2 million (USD7.6 million) from RMB42.2 million in the prior year period,
due primarily to rising new subscriber numbers. The 75.7% gross margin was
similar to the same period last year.
Sales and marketing expense was RMB10.4 million (USD1.5 million) in the
third quarter of fiscal 2010 compared to RMB6.6 million for the prior year
period. Third quarter sales and marketing expense as a percentage of revenue
was 15.1%, up from 11.9% last year but similar on a quarter-on-quarter basis.
Administrative expense increased to RMB16.7 million (USD2.4 million)
compared to RMB10.7 million in the prior year period in light of the Group's
business expansion and the commencement of the new Beijing and Guangdong
facilities and the increase in corporate overhead.
Operating income for the third quarter of fiscal 2010 was RMB25.1 million
(USD3.7 million) compared to RMB24.9 million for the same period last year.
Operating margin for the quarter was 36.4% compared to 44.6% in the prior year
period. The decline in operating margin was largely attributable to the
commencement of new Beijing storage facilities in April 2009 and the increase
in administrative expense, related to legal and professional fees associated
with being a newly public company.
Non-GAAP EBITDA in the third quarter increased 7.8% to RMB29.5 million
(USD4.3 million).