15 August 2016


Yestar International Holdings Company Limited
 (Stock code: 2393.HK)

*   *   *

Announces 2016 Interim Results

Revenue Increased by 43.7% to 1.44 Billion
Profit for the Period Surged by 109.1% yoy to 140.1 Million


 (Hong Kong – 15 August 2016) Yestar International Holdings Company Limited (“Yestar” or the “Company” together with its subsidiaries, the “Group”, stock code: 2393.HK) is pleased to announce the annual results for the six months ended 30 June 2016 (the “Period”).

The Group is the sole distributor and manufacturer of Fujifilm photographic paper in the PRC, and starting from 2014, has gradually transformed into a high-margin medical consumable manufacturer and distributor in the PRC. The Group mainly targets the booming medical industry in the PRC, with a focus in high-margin, high-consumption medical consumables, namely the IVD products and medical imaging products. With the professional management system and experienced senior management team, the Group has successfully built an extensive sales network in the PRC. Leveraging on the success track record, the Group has established a trustful partnership with global leaders, namely Roche Diagnostics (“Roche”), Becton Dickinson ("BD") and Thermo Fisher Scientific ("Thermo Fisher"). 

IVD business contribute to the substantial profit growth

Yestar has continued to achieve exceptional results for the six months ended 30 June 2016 (the “Period”). With the favourable performance of medical imaging products and the rewarding contributions from Jiangsu Uno Technology Development Company Limited (江蘇歐諾科技發展有限公司) (“Jiangsu UNO”) and Shanghai Emphasis Investment (上海安百達投資) (“Shanghai Anbaida”) which were acquired in November 2014 and August 2015 respectively, the Group’s total revenue has significantly increased by 43.7% year-on-year (“yoy”) to RMB1,436.8 million (1H2015: RMB 999.5 million). Gross profit amounted to RMB356.2 million, showing an increment of 98.4%. Since medical consumable products generated a higher gross profit margin of 26.9%, the Group’s overall gross profit margin has been driven up to 24.8% (1H2015: 18.0%), with an increase of 6.8 percentage points. Further, as the contribution from the medical consumable segment has been increasing, the Group’s profit for the period substantially surged by 109.1% to RMB140.9 million (1H2015: RMB67.4 million). Profit attributable to the owners of the parents rose by 91.2% to RMB106.3 million comparing to RMB55.6 million in 2015. Net profit margin was also enhanced by 1.8 percentage points to 7.4% (1H2015: 5.6%). Earnings per share was RMB5.0 cents (1H2015: RMB3.0 cents). The Board of Directors declared no interim dividend for the Period (1H2015: Nil).

Medical Consumable Business — Accounting for 77.3% of overall revenue

The Group distributes IVD products for Roche in Shanghai, Jiangsu and Anhui provinces, manufactures medical films (use in X-Ray, Magnetic Resonance Imaging (MRI) and Computer Tomography (CT-scan) etc.) for Fujifilm in the PRC. The Company also produces and sells dental film products under the house brand “Yes!Star”.

Under favourable government policies and the rapid development of the medical consumable industry, the Group’s medical consumable business remains the biggest revenue contributor and profit generator for the Period, in which accounted for 77.3% of the Group’s total revenue. During the Period, the segment has generated revenue of approximately RMB1,110.2 million, indicating a 76.5% yoy increment (1H2015: RMB629.1 million). The gross profit margin of the segment rose by 7.6 percentage points yoy to 26.9% (1H2015: 19.3%). The Group has also further extended its distribution network to the most affluent regions in the PRC, including 260, 70 and 258 hospitals and clinics in Jiangsu, Anhui and Shanghai respectively. 

Imaging printing products — Accounting for 22.7% of overall revenue

The Group also engaged in manufacturing, marketing, distribution and sale of Fujifilm color photographic paper (professional and minilab) as well as the industrial imaging products (NDT x-ray films and PWB films) in the PRC. Apart from Fujifilm, the Company also produces and sells NDT x-ray films under the house brand “Yes!Star”. During the Period, revenue of the segment accounted for 22.7% of the overall revenue, decreasing by 11.9% from approximately RMB370.4 million to RMB326.6 million in the first half of 2015. However, the segment’s gross profit margin has improved by 1.8 percentage points to 17.6%.

Prospects

The Group is optimistic towards its future development as the demand for medical consumables is prompted by the termination of the one-child policy and the ageing population subsequently creates plentiful opportunities for Yestar to explore in the PRC. There will be an extra 2.1 million newborns expected under the termination of the one-child policy which is a business opportunity for the IVD industry. Meanwhile, the ageing population will consequently increase the demand for body checkups and disease-related diagnosis, which requires more medical consumables products. 
 
Facing the enormous opportunities, Mr. James Hartono, the Chairman of Yestar International, stated, “Over the past three years, Yestar has completed business transformation and now we are a fast-moving, high-margin medical consumable company that delivered exceptional financial results. Leveraging on our extensive sales network in the most prosperous regions in the PRC, we are ready to propel forward to capture more market shares.” 

Mr. Hartono continued, “In order to accelerate our sales network expansion, we will increase the number of sales representative, deepen our sales network and at the same time seeking for potential merger and acquisition opportunities. In terms of product line, apart from continuing to produce and market dental film products under house brand “Yes!Star”, we will further explore and broaden our product offering. Looking forward, we will further enhance the cooperation with Roche in the medical consumable industry in the PRC. In pursuance of a strong marketing and distribution alliance, we will enhance our relationship with Fujifilm and other global industry giants. Through collaboration with these strategic partners, we believe Yestar can achieve fruitful results for shareholders in the coming years.


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About Yestar International Holdings Company Limited

The Group is sole distributor and manufacturer of Fujifilm photographic paper in the PRC, and starting from 2014, has gradually transformed into a high-margin medical consumable manufacturer and distributor in the PRC. The Group mainly targets the booming medical industry in the PRC, with a focus in high-margin, high-consumption medical consumables, such as the IVD products and medical imaging products. With professional management system and experienced senior management team, the Group has successfully built a systematic sales network in the PRC. Leveraging on the good track record, the Group has established a trustful partnership with global leaders, such as Fujifilm, Roche, Becton Dickinson and Thermo Fisher. The Group currently manufactures medical films for Fujifilm and distributes Roche and BD branded IVD products in Shanghai, Jiangsu and Anhui provinces, the PRC. The Group is also a sole processor and exclusive distributor of Fujifilm color photographic papers and industrial imaging products (including NDT x-ray films and PWB films) in the PRC. In addition, the Group also manufactures and sells dental films under the house brand “Yes!Star”.


For enquiries, please contact:

DLK Advisory

Michelle Shi (michelleshi@dlkadvisory.com)
Chermaine Chan (chermainechan@dlkadvisory.com)
Tel: +852 2857 7101
Fax: +852 2857 7103

For more detailed information, please kindly refer to the company factsheet: 2393_IR2016_Factsheet_Eng_20160815_final.pdf

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