China Jiuhao Health announces 2 new health projects in Sanya & Haikou
China Jiuhao Health Industry Corporation Limited (formerly known as "Media China Corporation Limited"; "Jiuhao Health" or the "Company") (Stock Code: 00419.HK) is pleased to announce its unaudited consolidated results of the Company and its subsidiaries (collectively the "Group") for the six months ended June 30, 2013 (the "Reporting Period").
During the Reporting Period, the Group recorded sales revenue of approximately HK$63.55 million, down 20% year-on-year. Gross profit reduced 64% to HK$22.66 million from a year ago. Loss from continuing operations was approximately HK$55.64 million. The worsening of financial performance from continuing operations was mainly attributable to the increase of finance costs from HK$12 million in the same period last year to HK$42 million in the current period, and the increase of non-cash intangible asset amortization expense from HK$5 million in the same period last year to HK$19 million in the current period.
The Group’s food and beverage income was adversely affected by the challenging macro operating environment in the Reporting Period. However, “Bayhood No.9 Club” still recorded sales revenue of approximately HK$63 million, which was 11% lower than the same period of previous year and accounted for 99% of the Group’s total sales revenue. Besides, the construction of China Jiuhao (Beijing) Health Town Project, a health preservation Si He Yuan and hotel project next to “Bayhood No.9 Club”, commenced in August 2013. The Phase 1 of this project will comprise nine villas with GFA of approximately 20,000 square metres. These villas are expected to be completed in phases starting from the first quarter of next year, which will drive the robust growth of sales revenue from the health business.
The Group has shifted its core business towards health business since last year by developing quality health preservation and retirement projects in different cities across the country under the brand name of "China Jiuhao Health Town". It acquired the operating rights of a land plot located in Sanya City, Hainan Province for a consideration of HK$25.20 million and plans to acquire the operating rights of an adjoining land. Both land plots will be combined and developed into a quality health and regimen-themed community project known as China Jiuhao (Sanya) Health Town, which is expected to commence operation in 2016.
In addition, the Group entered into an agreement with the Yan Feng People's Government and the Investment Invitation Centre of Meilan District, Haikou City in Hainan Province in early August for the joint development of China Jiuhao (Haikou) Health Town in Haikou City. Due to commence operation in 2015-2016, this project will become the Group’s second premier health and regimen-themed community project in Hainan Province and the third one in China.
Affected by the complicated and changing environment, TV advertising revenue in the PRC slowed down in the first half of 2013. As a result, sales revenue of Travel Channel, the Company’s associated company, decreased by more than 20% year-on-year in the Reporting Period. The Company shared a profit of approximately HK$7 million from Travel Channel and other media businesses, representing a 61% decrease from the same period last year.
In order to focus its resources on the development of the health business and capitalize on the tremendous opportunities arising in China's health preservation and retirement market, the Group announced in April to dispose of the entire interest indirectly held in Shenzhen Tian An International Building and the property management company. The transaction is expected to be completed in the second half of this year and the proceeds will mainly be used in the development of its health business, in particular Beijing Health Preservation Si He Yuan and Hotel Project.
Mr. Yuen Hoi Po, Chairman of Jiuhao Health, commented, "As of the end of 2012, China's population aged 60 or above exceeded 194 million, accounting for approximately 14% of its total population. This figure is expected to surpass 400 million by 2050. An ageing population fuels a strong demand for high quality healthcare, health preservation, and retirement services and facilities. We believe this coupled with favorable government policies provides considerable room for the development of China’s health industry. We will vigorously expand the health business and plan to establish and operate distinctive China Jiuhao Health Preservation Centres across the country, aiming to become a pioneer in offering a comprehensive range of specialized, comprehensive and systemized health preservation and retirement services in the PRC. Upon completion of our projects in Beijing, Haikou and Sanya City of Hainan Province, they will generate substantial returns to us. Looking ahead, the Group will continue to explore business opportunities in other cities in a meticulous and prudent manner, aiming to becoming a leading operator of health preservation and retirement services in China."
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