On 10:00 a.m. of 29th March 2017, Universal Medical Financial & Technical Advisory Services Company Limited ("Universal Medical" or "the Company"; stock code:2666) gives a press conference on annual results for the year ended 31 December 2016 in Grand Hyatt, Hong Kong. On behalf of the management, Mr. Guo Weiping, CEO of the Company, and Ms. Peng Jiahong, CFO of the Company, attend the press conference.

During the conference, the CEO addresses to the participants on the Company’s operation results and future prospects. Meanwhile, the CFO presents the Company’s annual financial performance comprehensively.  In Q&A section, the management also specifically answers questions from investors and analysts.

In 2016, facing the difficulties and challenges from external economy, the Group seized the development opportunities of healthcare industry. With the strategic goal as an integrated healthcare services provider, the Group has enhanced its execution capability, actively built a new business model with a combination of industry and finance and continuously strengthened risk prevention and control, achieving stable and healthy growth in operating results. According to the announcement of 2016 annual results, the Company recorded revenue of RMB2,701 million in 2016, representing an increase of 23.1% as compared to RMB2,193 million in the previous year. Profit before tax was RMB1,206 million, representing an increase of 34.0% as compared to RMB900 million in the previous year.

Benchmark hospital projects commence new business chapter

During 2016, leveraging on expanding healthcare resources platform and improving healthcare technology service capability, the Company vigorously developed its hospital investment and management business. The Company introduces the capital of central state-owned enterprise to local public hospitals, equipping them with international advanced equipment and planning and designing new hospitals in compliance with international standard. It also focused on nurturing high level talents by bringing in advanced management philosophy and methods, medical technologies and services. Moreover, the Company cooperated with partnered hospitals to optimize their operation and management systems as well as compensation incentive systems, thereby fully mobilizing medical staff and realizing their medical values and personal values.

On 30 August 2016, the Company and the First Affiliated Hospital of Xi’an Jiaotong University (西安交通大学第一附属医院) (the “First Affiliated Hospital”) signed a cooperation agreement in connection with the joint establishment of the International Land Port Hospital under the First Affiliated Hospital (西安交大一附院国际陆港医院) (the “International Land Port Hospital”). The First Affiliated Hospital is a state-level Grade III Class A comprehensive hospital administered directly by the National Health and Family Planning Commission (国家卫生和计划生育委员会) (the “NHFPC”), which leads Northwest China with advanced medical technology and service quality. The International Land Port Hospital will be a branch of the First Affiliated Hospital with 1,000 registered beds under planning. Universal Medical is granted two cooperation rights in return: the construction and operation right of the International Land Port Hospital and the business cooperation right with the International Land Port Hospital and the First Affiliated Hospital.

The successful bidding of benchmark projects like First Affiliated Hospital as well as their orderly application to other projects is not only attributable to our abundant resources and medical experience, but also attributable to the joint efforts of all staff, which will surely start a new chapter of the Company’s business development. It only took 8 months from a framework agreement to a formal agreement, after which two companies were set up and a supply chain company recognized by Good Supply Practice (GSP,《药品经营质量管理规范》) was acquired. It is an excellent teamwork between the two parties with complementary advantages that finally make it happen.

Healthcare financial business rides on the uptrend for a steady growth

In 2016, the healthcare financial business of the Company continued to grow rapidly. The yield on interest-earning assets increased slightly while the cost rate of interest-bearing liabilities decreased substantially, increasing the net interest spread from 2.56% in 2015 to 3.31% in 2016 by 0.75 percentage point.

The average yield of the Company’s interest-earning assets increased to 8.40% in 2016 from 8.24% in 2015, benefiting from customer loyalty and competitive advantages of differentiated services brought by our integrated healthcare service solutions and the full implementation of the change from business tax to value-added tax. The average cost rate of interest-bearing liabilities of the Company decreased to 5.09% in 2016 from 5.68% in 2015 due to the decrease of domestic financing cost as a result of interest rate cuts by the central bank and the flexible adjustments to the Company’s financing activities. In the complicated domestic and overseas financial climate, the Company actively adjusted financing strategies and optimized its debt structure, making more reasonable arrangements in terms of currencies and regions.

In 2016, the Company’s assets remained a steady and healthy growth. As of 31 December 2016, the total assets of the Company amounted to RMB28,964.6 million, representing an increase of 22.4% as compared to the end of 2015. The proportion of healthcare assets in finance lease receivables was 71.6%, showing the Group’s assets concentration in healthcare industry. Non-performing assets ratio was 0.81% and the overdue ratio (30 days) was 0.51%, representing a leading position in the industry. The Group maintained a prudent provision policy and its asset provision coverage ratio reached 183.85% as of 31 December 2016.

Expansion of Clinical Department Upgrade Services

With the continuous enrichment of medical resources, clinical department upgrade service models of the Company have become more flexible and diverse. In 2016, the gross profit of the Company’s clinical department upgrade services reached RMB131 million, with numbers of clinical department upgrade customers increased from 105 at the end of 2015 to 157. In terms of the Cerebral Vascular Accident (“CVA”) clinical department upgrade, the Company continued innovating the service model. The Company established the “Chinese CVA Prevention and Treatment Training Platform” together with China Stroke Center Management Steering Group under the Stroke Prevention Project Committee of NHFPC. In future, it will focus on conducting the systematic training for primary hospitals of clinical diagnosis and treatment technologies. At the same time, the Company will also focus on improving hospital management standard and optimizing multidisciplinary collaboration model, so that the hospitals’ technology and management can reach the respective national stroke center construction standards. In the new model, the Company will select and formulate customized plans for hospitals according to their actual situations and development demands, committed to making hospitals the new force in CVA screening, prevention and treatment and enhancing their comprehensive strengths in prevention and treatment of chronic diseases.

When it comes to future prospects, the management said that, with excellent execution, the Company will closely follow the target of becoming a leading integrated healthcare services provider and continue implementing the development strategy which integrates healthcare finance, hospital investment and management, healthcare technology services and healthcare digitalization. The Company will implement hospital investment management projects in an orderly manner; continue to expand the market of medical finance lease and improve its medical technology services, facilitating a coordinated development of all business sectors. In the years to come, the Company will firmly grasp the opportunity from healthcare business matrix, and establish a complete business chain to further promote the rapid growth of the Company.”