Seized the Policy Opportunities of the Medical Industry

To Be a Leading Medical and Health Conglomerate in China

(Hong Kong, 21 August 2018) Genertec Universal Medical Group Company Limited (the “Company” or “Universal Medical”, stock code: 2666.HK) announced its interim results in Hong Kong. On behalf of senior management of the Company, CEO Mr. Guo Weiping and CFO Ms. Peng Jiahong, attended the press conference and share with investors the interim results for the six months ended 30 June 2018.

In the first half of 2018, Universal Medical seized the policy opportunities of the medical industry, and it has been pursuing the goal of building itself into a leading medical and health conglomerate in China, and continuing to enrich and integrate its domestic and overseas medical resources. The Company also expanded its network of hospital clients, and continued to advance the synergetic development of its businesses in hospital investment and management, medical finance, medical technology and medical digitalization services. As a result, the Company achieved a steady increase in its operating performance. For the six months ended 30 June 2018, the Company’s revenue increased by 26.7% to RMB2,094.8 million; while the Company’s profit before tax increased by 25.2% to RMB1,001.7 million as compared to the corresponding period of the previous year. In the same period, the Company achieved a steady growth in its asset size and maintained good asset quality. The corporate credit rating of China Universal Leasing Co., Ltd., a wholly-owned subsidiary of the Company, was successively uprated to AAA by China Cheng Xin International Credit Rating Co., Ltd. and Shanghai Brilliance Credit Rating & Investors Service Co., Ltd., which further optimized the Company’s overall financing position.

Vigorously Promoting Hospital Investment and Management Business

In the first half of 2018, the Company fully utilized its resources advantages, actively seized the policy opportunities available and intensified its efforts to push forward with its hospital investment and management business. On the one hand, the Company steadily pushed ahead with the existing projects and potential cooperative projects. On the other hand, the Company seized the full opportunities of the reform of medical institutions of state-owned enterprises (“SOEs”) by way of spin-off to conduct merger and acquisition negotiations for take-over and integration of the medical institutions owned by SOEs.

On 9 August 2018, the Company formally signed a cooperation agreement with the Health and Family Planning Committee of Handan and Handan First Hospital for co-establishment of a new east district of Handan First Hospital. The Company will, on the one hand, use its financial strengths and integrated healthcare resources to provide funding, technology, talents and advanced operating and managing mechanisms to Handan First Hospital, and on the other hand, leverage the strengths of Handan First Hospital in medical treatment, education, scientific research and brand, to make Handan First Hospital a high-quality healthcare center in Hebei and the three neighboring provinces including Shanxi, Shandong and Henan, benefiting people’s livelihood through its advanced medical technology and premium services.

Up to now, progress on the construction project of International Land Port Hospital jointly undertaken by the Company and First Affiliated Hospital achieved further milestones. The Company has sorted out procurement options for First Affiliated Hospital, as well as the pharmaceutical delivery and upstream production enterprises, and signed a Sunshine Procurement Service Agreement with First Affiliated Hospital in early August 2018 which has laid a solid foundation for the Company to fully take over the supply chain business of First Affiliated Hospital. Meanwhile, the master plan and building layout plan for International Land Port Hospital have already been finalized, while relocation and construction of the high-voltage lines and other related work are well underway. In the second half of this year, the Company will continue to progress the construction and engineering of International Land Port Hospital, and at the same time speed up the supply chain business operation.

On 3 August 2017, six ministries and commissions including the State-owned Assets Supervision and Administration Commission of the State Council (the “SASAC”) jointly issued the Guidance on Deepening the Reform of Educational and Medical Institutions of State-owned Enterprises, requiring the reform of medical institutions of SOEs by way of spin-off should be substantially completed by the end of 2018, and proposing to support SOEs primarily engaged in healthcare industry to integrate the resources of such medical institutions. Subsequently, in order to urge implementation of the reform of medical institutions owned by SOEs, SASAC further issued relevant notices, requiring, among others, all central SOEs should prepare plans to ensure that reform of medical institutions of SOEs be completed by the end of 2018; six central SOEs including China General Technology (Group) Holding Company Limited are allowed to participate in resources consolidation of medical institutions of SOEs; in principle, the central SOEs not engaged in healthcare industry will no longer and not be allowed to establish medical institutions, nor should they establish or directly manage such medical institutions during the restructuring with social capital involved, by circumventing such restrictions. As the main operating entity of the medical and health segment of GT-PRC, the Company actively responded to these above policies. In the first half of 2018, the Company focused on medical institutions of SOEs with better operational performance, management skills and geographic positions. The Company has been in close contact with several state-owned Companys and their quality hospitals, and managed to reach preliminary agreements on cooperation. Further project negotiations, on-site due diligence, approval requests and other work are being undertaken in an orderly manner. In the meanwhile, Universal Medical actively strengthened the development and interconnection of its external and internal resources including teams, talents, resources and financing, providing full support to speed up its promotion of hospital investment and management business.

Continuing to Improve Medical Finance Business

In the first half of 2018, facing changing environments in domestic and international finance markets and even more fierce competition in finance lease market, the Company’s staff worked meticulously in their market sector, continuing to intensify market exploitation and enhance existing customers’ stickiness by providing differentiated and high quality services, which has helped steadily increase the Company’s asset size. Meanwhile, we have actively adjusted our financing strategies to optimize debt structures and control the average cost rate of interest-bearing liabilities. As always, we executed prudent risk control processes and strict asset management measures to ensure that our asset quality remains the leading position in the industry.

Continuing to Expand Medical Technology Service

The Company has further expanded its medical technology services as it continues to enrich its domestic and international resources. It has established cooperative relationships with dozens of top international medical institutions and domestic hospitals. The Company has also established cooperative relationships with more than 200 experts and academic leaders in various disciplinary fields. The Company gives full play to its advantages to help its partnered hospitals establish connections with the most suitable quality medical resources to achieve comprehensive improvements at medical technology and managerial expertise. In the first half of 2018, the Company recorded a gross profit of RMB429.6 million from its industry, equipment and financing advisory services, representing a growth of 22.0% as compared with the corresponding period of the previous year; clinical department upgrade achieved a gross profit of RMB93.2 million, representing a growth of 34.3% as compared with the corresponding period of the previous year.

Enhancing Efforts to Build Medical Digitalization Business

The Company’s goal of actively developing its medical digitalization business is to create internet-based medical platforms, establish remote medical networks to provide remote medical services via multiple modes and extend the medical services of hospitals to thousands of households and achieve deep integration of the internet with medical services. In order to meet the development needs of the medical digitalization business, the Company has implemented multiple necessary measures simultaneously, extensively recruited professional talents and established a skillful and professional team for the research, development and operation of its medical digitalization products. In the first half of 2018, the Company further optimized the medical management information system that it researched and developed independently. On the one hand, this has provided technology support for the Company to help its future hospitals achieve internet-based medical platforms. On the other hand, it has gradually developed an independent market. In the first half of 2018, the Company successfully entered into an agreement with People’s Hospital of Baoqing for medical digitalization business cooperation. Meanwhile, the implementation of a framework agreement the Company signed earlier with Qiqihar First Hospital has entered into work stages such as data acquisition and finance system connection. Cooperation will be further expanded and carried out subsequently.

When it comes to future prospects, Mr. Guo Weiping, the Executive Director and Chief Executive Officer of Universal Medical said that, “In the second half of 2018, the Company will continue to focus on the strategic development direction in medical fields, seize policy and market opportunities, speed up the integration of resources, and actively respond to all challenges. Based on our medical finance services, we will continue to vigorously expand hospital investment and management business, cooperatively develop medical digitalization business and steadily implement medical technology services. We will push forward the synergetic development of businesses in all segments, and actively explore the extension and integration mode of medical industry services, so as to build Universal Medical into a leading medical and health conglomerate.”