Q1 2022 Global Cord Blood Corp Earnings Call

To first quarter results.

Thank you for your ongoing support of global Cord Blood Corporation now I will turn the call over to our CFO, Mr. Albert Chen who will discuss our first quarter financial performance.

Mr. Chen Please go ahead.

Good morning, everyone. Thank you for joining our call today.

In the first quarter.

Revenues increased by 12% year over year to approximately 315 million renminbi.

Mainly driven by the increase in processing fee revenues.

During the reporting quarter.

The group recruited over 19600, new subscribers.

Representing an increase of 14% year over year.

Due to the relatively low comparable base in the first quarter of last year, coupled with gradually improve the consumer sentiment as various COVID-19 containment measures started to take effect.

As a result Rev.

Revenue generated from processing fees and other services increased by 14% year over year to approximately 185 million renminbi.

Which accounted for 59% of total revenues.

By the end of June 2021, our accumulated subscriber base expanded to over 920000.

Accordingly.

Storage fee revenues for the first quarter increased by 9% year over year to 130 million renminbi.

Gross profit in the first quarter increased by approximately 13%.

Two 267 million renminbi.

And gross margin improved by 30 basis points from last year periods to approximately 85%.

Yeah.

Operating income for the first quarter increased by 17% year over year.

Two 157 million renminbi.

And operating margin improved to approximately 50%.

From 48% of last year, because SG&A expenses only increased slightly.

Depreciation and amortization expenses for the reporting quarter were approximately 12 million renminbi.

Non-GAAP operating income increased by approximately 16% year over year to 169 million renminbi.

And non-GAAP operating margin improved by one percentage point year over year to 53%.

Sales and marketing expenses in the first quarter increased by 8% year over year to 59 million Renminbi may.

Mainly due to an increase in sales incentives as we carefully redeploy sales and marketing resources during the consumer sentiment recovery phase.

While facing occasional localized lockdown due to various COVID-19 clusters.

Sales and marketing expenses as a percentage of revenue decreased to 19%.

From 20% in the prior year period.

General and administrative expenses increased by 4% year over year to approximately 46 million renminbi.

Mainly due to increases in accounts receivable provisions and professional fees.

But was partially offset by a decrease in overhead spending.

General and administrative expenses as a percentage of revenue decreased to 15% in the reporting quarter.

In the first quarter, we recognized an approximately five 6 million renminbi increase in fair value of equity securities or a mark to market gains compared.

Compared to over 18 million renminbi in mark to market gain in last year.

In the reporting quarter. We also recorded approximately 1 million RMB in dividend income from equity investment compared to no such income in the prior year period.

As a result of the increases in operating income and dividend income.

Partially offset by the decrease in mark to market gains.

Income before income tax for the first quarter increased by 7% year over year to 172 million renminbi.

Net income attributable to the company shareholders increased by 3% year over year to 136 million renminbi.

Basic and diluted earnings per ordinary share for the reporting quarter increased by approximately 3% to $13.0 renminbi.

From Mb.

These are the highlights of our first quarter financial results, we are happy to turn to the floor for any questions.

Thank you ladies and gentlemen this.

During the Q&A session. If you have a question you'd have to Chris.

One on your telephone.

And one.

On your telephone keypad. Please allow us to allow everyone to ask a question please limit yourself to one.

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Volume.

And gentlemen, if you wish to ask a question Chris.

Zero and one.

From coupon.

Yeah.

As a reminder, if you wish to ask a question and answer Joanne one Andrew we have one question from Mr. Bill Jones.

Sure.

Hello. Thank you for taking my questions can you provide a breakdown of your new subscribers.

So what was the payment breakdown of your respective services. Thank you.

Thank you for the questions.

In terms of.

In terms of new subscriber breakdown <unk> by geographical region.

Approximately.

Two thirds like 67% of our new subscribers are derived from the Guangdong Province.

Approximately 20% of our new subscribers derived from the Zhejiang Province, and the rest came from the Beijing municipality area.

In terms of payment option breakdown.

Approximately 30% of our new subscribers elect the normal payment option.

Approximately 42%.

New subscribers elected the upfront payment option.

And.

The remaining balance of people electing the installment payment option, which.

Batteries from three years to 10 years.

Yeah.

Okay. We don't have any more question for the moment, ladies and gentlemen, if you wish to ask another question. Please press one on your telephone keypad zero and one on Japan.

Japan, we have some.

A new question from.

Some drawn from funded mass company capital sorry. Please go ahead.

Alright, thanks for taking my call.

Hmm.

What would you say is your excess cash.

But you have available for.

Either acquisitions or returning cash to shareholders and how do you think about those two options.

All the capital in hand, as you are aware.

In excess of 6 billion RMB and half of which are close to half of which is.

As a result of people electing to pay the upfront payment option, which resulted in deferred revenue.

Fair to say that the company right now is in a relatively.

<unk> financial position.

Two potentially withstand any.

Potential regulatory couple of banking.

Industry in China.

Well as that.

As well as the.

Our ability to potentially take on.

Additional acquisition or diversification projects. So this is probably the best way to put it but.

But as you are aware the company is.

Taking on a relatively prudent approach lately.

Especially.

Taking into considerations of various.

Changes in the regulatory environment.

<unk>.

I heard that I trust as many of you are aware that there are many new regulations coming out from the authorities in the PRC.

Which governs from how consumer behave encouraging more birth and also maybe reducing children reliance on.

On mobile games.

<unk>.

Lately, one of the policy, which we highlighted in our 20-F as well as the introduction of the bio security law as well as the latest.

Couple of banking licensing policy as well so.

As mentioned in our CEO remarks, we are living in a very interesting time right now so it is.

Possible.

We do as possible that more regulation.

With respect to corporate banking or healthcare industry as a whole may come out from time to time. So we are also carefully evaluating our options as we speak.

I guess right now because of all the.

New regulations coming into play.

It is better to take a more prudent approach when evaluating our options.

Sure.

Thank you, ladies and gentlemen should wish to ask another question. Please press <unk>, one on Nevada zero and one on your telephone keypad.

Ladies and gentlemen. This is reminder, if you wish to ask a question. Please press one.

It seems that there is no further question at this point.

I'll turn the call back to.

But I am catch Bae. Please go ahead.

Thank you Greg.

This concludes our earnings conference call for the fiscal 2020 to first quarter.

Thank you very much for your participation and ongoing support.

A great day.

Greg you may now disconnect.

Thank you ladies and gentlemen, this concludes today.

Disconnect.

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