Universal Health International : 2018/19 ANNUAL REPORT

UNIVERSAL HEALTH INTERNATIONAL GROUP HOLDING LIMITED

大 健 康 國 際 集 團 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

Stock Code: 2211

Retail

PLATFORM+

INTERNET+

Brand

Distribution

FINANCE+

2018/19

ANNUAL REPORT

CONTENTS
	Page
Company Profile	2
Corporate Information	3
Financial Highlights	4
Chairman's Statement	6
Management Discussion and Analysis	10
Environmental, Social and Governance Report	24
Report of the Directors	37
Corporate Governance Report	54
Directors and Senior Management	70
Independent Auditor's Report	78
Consolidated Balance Sheet	87
Consolidated Statement of Comprehensive Income	89
Consolidated Statement of Changes in Equity	91
Consolidated Cash Flow Statement	93
Notes to the Consolidated Financial Statements	94
Financial Summary	196

Brand

FINANCE+

Retail

INTERNET+

Distribution

PLATFORM+

UNIVERSAL HEALTH INTERNATIONAL GROUP HOLDING LIMITED

Company Profile

Universal Health International Group Holding Limited (Stock code: 2211) ("Universal Health International" or the "Company") and its subsidiaries (the "Group") aims at huge market opportunities in the universal health industry, strives to be international brand operator of universal health and become leading practitioner of the strategy of "Internet + Universal Health" as well as pioneer of the development of ecology in the industry chain by the way of finance and capital.

Universal Health International is one of the leading pharmaceutical retailers and distributors in the Northeast of the People's Republic of China (the "PRC" or "China"). The Group has distinguished pharmaceutical retail chain network in the Northeast China and it is also the largest privately operated pharmaceutical distributor in the Northeast China. As of the date of this annual report, the Group operated 850 retail pharmacies, mainly located in the Northeast China, and had approximately 3,800 active distributors and 5,628 full-time staff. In addition, the Group has set up five large-scale logistics storage centers in Shijiazhuang, Shenyang, Changchun, Harbin and Jiamusi, and has established a high- quality distribution system radiating across the country and covering the northeastern region of the PRC.

As a basic business segment, the Group's main product categories for pharmaceutical retail and distribution (including import and export trade) include prescribed drugs, non-prescribed drugs (Chinese patent medicines, chemical preparations, antibiotics and biochemical drugs), traditional Chinese medicine decoction pieces, biological products, protein assimilation preparations, peptide hormones, blood products, disinfection products, medical equipment, family planning supplies (contraceptives and utensils), prepackaged foods, dairy products (including infant formula milk powder), nutritional foods, health care products, stereotyped packaging cosmetics, daily necessities, etc.

The Group will continue leveraging on the core advantages of branded products, expanding the scope of cooperation on branded products, leveraging on institute training, and providing more value-added service to employees, customers and consumers. The Group also enriches the product mix by introducing more health care products based on the expertise in pharmaceutical retail and distribution, so as to promote the concept of the universal health industry. Meanwhile, the Group actively explores upstream ecological chain, covering the construction for Chinese herbal medicines base and the production of plant capsule.

The Group actively explores online pharmacies, cross-bordere-commerce and other "Internet+" areas, puts "Industry Chain of Traditional Chinese Medicine" into the strategic scope, plans the establishment of "Universal Health Industry Fund" and introduces the development concept of "Platform". Furthermore, the Group maintains upstream and downstream ecosystem leveraging on finance and capital to cope with the situation of "New Norm" in real economy, and takes the lead in upgrading and transforming the industry.

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ANNUAL REPORT 2018/19

Corporate Information

BOARD OF DIRECTORS

Executive Directors:

Mr. Jin Dongtao

• (Chairman and Chief Executive Officer) Mr. Jin Dongkun (Vice Chairman)
  Mr. Zhao Zehua Mr. Sun Libo

Independent Non-executive Directors:

Mr. Cheng Sheung Hing

Ms. Chiang Su Hui Susie

Mr. Zou Haiyan

AUDIT COMMITTEE

Mr. Zou Haiyan (Chairman)

Mr. Cheng Sheung Hing

Ms. Chiang Su Hui Susie

REMUNERATION COMMITTEE

Mr. Cheng Sheung Hing (Chairman)

Ms. Chiang Su Hui Susie

Mr. Jin Dongkun

NOMINATION COMMITTEE

Mr. Jin Dongtao (Chairman)

Mr. Cheng Sheung Hing

Ms. Chiang Su Hui Susie

AUTHORIZED REPRESENTATIVES

Mr. Ge Junming

Mr. Zhao Zehua

COMPANY SECRETARY

Mr. Ge Junming

REGISTERED OFFICE

PO Box 309

Ugland House

Grand Cayman, KY1-1104

Cayman Islands

HEADQUARTERS

No. 14-1

Bei Yi Zhong Road

Tiexi District

Shenyang City

Liaoning Province, PRC

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

2404, 24th Floor

World-Wide House

19 Des Voeux Road Central

Central

Hong Kong

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Maples Fund Services (Cayman) Limited

PO Box 1093, Boundary Hall

Cricket Square

Grand Cayman KY1-1102

Cayman Islands

HONG KONG SHARE REGISTRAR AND TRANSFER OFFICE

Computershare Hong Kong Investor Services Limited

Shops 1712-1716

17th Floor, Hopewell Centre

183 Queen's Road East

Wanchai, Hong Kong

AUDITOR

Mazars CPA Limited

STOCK CODE

The Main Board of The Stock Exchange of Hong Kong Limited: 2211

INVESTOR RELATIONS

[e-mail]

COMPANY'S WEBSITE

www.uhighl.com

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UNIVERSAL HEALTH INTERNATIONAL GROUP HOLDING LIMITED

Financial Highlights

			For the
		For the	eighteen
		year ended	months ended
		30 June	30 June
		2019	2018
	Unit	(Audited)	(Audited)
Revenue	RMB million	2,424.4	3,968.9
Gross profit	RMB million	326.8	652.1
Operating loss	RMB million	(281.6)	(966.2)
Loss for the year/period	RMB million	(267.1)	(924.8)
EBITDA(1)	RMB million	(252.2)	(369.1)
Basic loss per share(2)	RMB cents	(8.58)	(33.67)
Gross margin	%	13.5	16.4
Operating loss margin	%	(11.6)	(24.3)
Net loss margin	%	(11.0)	(23.3)
		As at	As at
		30 June	30 June
		2019	2018	Change
	Unit	(Audited)	(Audited)
Current ratio(3)	times	4.8	5.4	-0.6
Trade receivables turnover(4)	days	28.7	23.1	+5.6
Inventory turnover(5)	days	52.7	57.2	-4.5
Trade payables turnover(6)	days	28.6	26.6	+2.0
Return on equity(7)	%	(15.4)	(47.8)	+32.4 pp
Return on total assets(8)	%	(13.3)	(41.5)	+28.2 pp

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