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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

 

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of July 2022

 

Commission File Number: 001-34541

 

GLOBAL CORD BLOOD CORPORATION
(Translation of registrant’s name into English)

 

48th Floor, Bank of China Tower
1 Garden Road
Central

Hong Kong S.A.R. 
 (Address of Principal Executive Offices) 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x            Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 

 

 

 

 

 

EXPLANATORY NOTE

 

This Report of Foreign Private Issuer on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or Global Cord Blood Corporation’s (the “Company”) future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates”, “believes”, “expects”, “can”, “continue”, “could”, “estimates”, “intends”, “may”, “plans”, “potential”, “predict”, “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this Report on Form 6-K is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company’s expectations are as of the date of this Report on Form 6-K, and the Company does not intend to update any of the forward-looking statements after the date of this Report on Form 6-K to conform these statements to actual results, unless required by law.

 

The forward-looking statements included in this Report on Form 6-K are subject to risks, uncertainties and assumptions about the Company’s businesses and business environments. These statements reflect the Company’s current views with respect to future events and are not a guarantee of future performance. Actual results of the Company’s operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: the ongoing impact of 2019 novel coronavirus (“COVID-19”), including the partial lockdowns implemented in various cities in the People’s Republic of China, or PRC and the imposition by some hospitals in the PRC of restrictions on entrance to solely to hospital staff and patients; levels of consumer confidence in the healthcare services sector generally in the PRC as a result of the outbreak; the length of the COVID-19 outbreak and severity of such outbreak across the globe; the pace of recovery following the COVID-19 outbreak; continued compliance with government regulations regarding cord blood banking in the PRC and any other jurisdiction in which the Company conducts its operations; changing legislation or regulatory environments in the PRC (including but not limited to cord blood license related regulations, Biosecurity laws, antitrust laws) and any other jurisdiction in which the Company conducts its operations; the acceptance by subscribers of the Company’s different pricing and payment options and reaction to the introduction of the Company’s premium-quality pricing strategy; demographic trends in the regions of the PRC in which the Company is the exclusive licensed cord blood banking operator; labor and personnel relations; the existence of a significant shareholder able to influence and direct the corporate policies of the Company; credit risks affecting the Company’s revenue and profitability; changes in the healthcare industry, including those which may result in the use of stem cell therapies becoming redundant or obsolete; the Company’s ability to effectively manage its growth, including maintaining effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; the availability of capital resources, including in the form of capital markets financing opportunities, in light of legislative developments affecting U.S. listed issuers whose independent registered public accounting firms are based in the PRC and not subject to U.S. Public Company Accounting Oversight Board inspections, international pressure on trade and currency against the PRC and its potential impact on the PRC consumer behavior, as well as general economic conditions; the potential acquisition of Cellenkos, Inc. (“Cellenkos”) and the rights to develop and commercialize all of its existing and future products worldwide except those related to Cellenkos’s existing collaboration with Incyte Corporation and related litigation matters pending in the Cayman Islands and the British Virgin Islands; and other relevant risks detailed in the Company’s filings with the Securities and Exchange Commission in the United States.

 

 

 

 

Results of Operations and Financial Condition

 

Following this cover page are the unaudited condensed consolidated financial results for the three months and year ended March 31, 2022 of the Company.

 

 

 

 

GLOBAL CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2021 and 2022

 

   March 31,   March 31, 
   2021   2022 
   RMB   RMB   US$ 
   (in thousands except share data) 
ASSETS               
Current assets               
Cash and cash equivalents   6,075,798    6,660,984    1,050,744 
Accounts receivable, less allowance for credit losses (March 31, 2021: RMB137,961; March 31, 2022: RMB160,445 (US$25,309))   130,298    161,302    25,445 
Inventories   44,257    45,879    7,237 
Prepaid expenses and other receivables   47,788    66,838    10,545 
Total current assets   6,298,141    6,935,003    1,093,971 
Property, plant and equipment, net   498,656    473,811    74,742 
Operating lease right-of-use assets   5,039    2,880    454 
Non-current deposits   344,752    346,228    54,616 
Non-current accounts receivable, less allowance for credit losses (March 31, 2021: RMB67,095; March 31, 2022: RMB59,037 (US$9,313))   217,208    254,798    40,193 
Inventories   91,446    95,163    15,012 
Intangible assets, net   88,202    83,581    13,184 
Investment in equity securities at fair value   117,911    93,174    14,698 
Other equity investment   189,129    189,129    29,834 
Deferred tax assets   55,845    60,758    9,584 
Total assets   7,906,329    8,534,525    1,346,288 
                
LIABILITIES               
Current liabilities               
Accounts payable   9,479    8,330    1,314 
Accrued expenses and other payables   136,448    148,659    23,451 
Operating lease liabilities   1,636    147    23 
Deferred revenue   449,359    458,262    72,289 
Income tax payable   29,547    31,160    4,915 
Total current liabilities   626,469    646,558    101,992 
Non-current deferred revenue   2,392,906    2,473,549    390,193 
Non-current operating lease liabilities   147    —    — 
Other non-current liabilities   482,224    505,166    79,688 
Deferred tax liabilities   16,132    24,280    3,830 
Total liabilities   3,517,878    3,649,553    575,703 
                
EQUITY               
Shareholders’ equity of Global Cord Blood Corporation               
Ordinary shares               
-  US$0.0001 par value, 250,000,000 shares authorized, 121,687,974 and 121,551,075 shares issued and outstanding as of March 31, 2021 and 2022, respectively   83    83    13 
Additional paid-in capital   2,101,582    2,101,582    331,516 
Treasury stock, at cost (March 31, 2021 and 2022: 136,899 shares, respectively)   (2,815)   (2,815)   (444)
Accumulated other comprehensive losses   (103,179)   (106,786)   (16,845)
Retained earnings   2,386,187    2,887,252    455,453 
Total equity attributable to Global Cord Blood Corporation   4,381,858    4,879,316    769,693 
Non-controlling interests   6,593    5,656    892 
Total equity   4,388,451    4,884,972    770,585 
Total liabilities and equity   7,906,329    8,534,525    1,346,288 

 

 

 

 

GLOBAL CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months and Year Ended March 31, 2021 and 2022

 

   Three months ended March 31,   Year ended March 31, 
   2021   2022   2021   2022 
   RMB   RMB   US$   RMB   RMB   US$ 
   (in thousands except per share data) 
Revenues   302,321    297,209    46,884    1,159,639    1,243,255    196,119 
Cost of revenues   (45,908)   (41,976)   (6,621)   (178,947)   (183,307)   (28,916)
Gross profit   256,413    255,233    40,263    980,692    1,059,948    167,203 
Operating expenses                              
Research and development   (5,486)   (4,780)   (754)   (23,769)   (22,296)   (3,517)
Sales and marketing   (59,513)   (59,482)   (9,383)   (237,691)   (241,725)   (38,132)
General and administrative   (43,171)   (48,833)   (7,703)   (174,362)   (187,062)   (29,509)
Total operating expenses   (108,170)   (113,095)   (17,840)   (435,822)   (451,083)   (71,158)
Operating income   148,243    142,138    22,423    544,870    608,865    96,045 
Other income/(expenses), net                              
Interest income   8,132    8,426    1,329    30,899    32,609    5,144 
Foreign currency exchange (losses)/gains   (28)   (247)   (39)   155    (642)   (101)
Change in fair value of equity securities   (4,722)   (13,975)   (2,204)   25,385    (20,391)   (3,217)
Dividend income   —    —    —    1,281    1,120    177 
Others   3,091    3,723    587    8,161    6,274    990 
Total other income/(expenses), net   6,473    (2,073)   (327)   65,881    18,970    2,993 
Income before income tax   154,716    140,065    22,096    610,751    627,835    99,038 
Income tax expense   (24,415)   (33,267)   (5,248)   (94,546)   (118,352)   (18,669)
Net income   130,301    106,798    16,848    516,205    509,483    80,369 
Net income attributable to non-controlling interests   (2,567)   (2,082)   (328)   (7,958)   (8,418)   (1,328)
Net income attributable to Global Cord Blood Corporation’s shareholders     127,734       104,716       16,520       508,247       501,065       79,041  
                               
Earnings per share:                              
Attributable to ordinary shares                              
- Basic   1.05    0.86    0.14    4.18    4.12    0.65 
- Diluted   1.05    0.86    0.14    4.18    4.12    0.65 
                         
Other comprehensive income/(losses), net of nil income taxes                        
-  Foreign currency translation adjustments   414    (68)   (11)   (8,516)   (3,607)   (569)
Comprehensive income   130,715    106,730    16,837    507,689    505,876    79,800 
                               
Comprehensive income attributable to non-controlling interests   (2,567)   (2,082)   (328)   (7,958)   (8,418)   (1,328)
Comprehensive income attributable to Global Cord Blood Corporation’s shareholders   128,148    104,648    16,509    499,731    497,458    78,472 

 

 

 

 

Other Events

 

On July 5, 2022, the Company issued a press release announcing unaudited condensed consolidated financial results for the three months and year ended March 31, 2022. A copy of the press release is attached as Exhibit 99.1.

 

Exhibits

 

Exhibit No.  Description
    
99.1  Press Release dated July 5, 2022

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

GLOBAL CORD BLOOD CORPORATION
   
 By:/s/ Albert Chen
 Name:Albert Chen
 Title:Chief Financial Officer

 

Dated: July 5, 2022

 

 

 

 

 

 

Exhibit 99.1

 

 

Global Cord Blood Corporation Reports Financial Results

for the Fourth Quarter and Full Year of Fiscal 2022

 

Added 16,423 New Subscribers in 4QFY22

4QFY22 Revenues Down 1.7% YoY to RMB297.2 Million ($46.9 Million)

4QFY22 Gross Profit Down 0.5% YoY to RMB255.2 Million ($40.3 Million)

4QFY22 Operating Income Down 4.1% YoY to RMB142.1 Million ($22.4 Million)

4QFY22 Non-GAAP Operating Income Down 4.1% YoY to RMB153.9 Million ($24.3 Million)

 

HONG KONG, China, July 5, 2022 – Global Cord Blood Corporation (NYSE: CO) (“GCBC” or the “Company”), China’s leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services, today announced its unaudited financial results for the fourth quarter and full year of fiscal 2022, ended March 31, 2022.

 

Fourth Quarter Fiscal 2022 Highlights

 

·New subscribers decreased by 15.2% year-over-year (“YoY”) to 16,423 due to anti-pandemic measures, as well as fewer newborns in our operating regions, while accumulated subscriber base expanded to 970,3751.

·Revenues decreased by 1.7% YoY to RMB297.2 million ($46.9 million), as the increase in storage fees revenues partially offset the decrease in processing fees revenues, due to the decrease in new subscribers.

·Gross profit decreased slightly to RMB255.2 million ($40.3 million) from RMB256.4 million in the prior year period, while gross margin improved to 85.9% from 84.8% in the prior year period.

·Operating income decreased by 4.1% YoY to RMB142.1 million ($22.4 million). Operating margin was 47.8%, compared to 49.0% in the prior year period.

·Operating income before depreciation and amortization (“non-GAAP operating income”2) decreased by 4.1% YoY to RMB153.9 million ($24.3 million).

·Net income attributable to the Company’s shareholders decreased by 18.0% to RMB104.7 million ($16.5 million), partly due to a reduction in fair value of equity securities (“mark-to-market losses”) and an increase in income tax expense.

·Net cash provided by operating activities was RMB162.0 million ($25.6 million), compared to RMB211.1 million of the prior year period.

 

Full Year Fiscal 2022 Highlights

 

·New subscribers increased by 2.9% YoY to 74,147, and accumulated subscriber base was 970,3751.

·Revenues increased by 7.2% YoY to RMB1,243.3 million ($196.1 million).

·Gross profit increased by 8.1% YoY to RMB1,059.9 million ($167.2 million).

·Operating income increased by 11.7% YoY to RMB608.9 million ($96.0 million).

·Non-GAAP operating income2 increased by 10.6% YoY to RMB656.8 million ($103.6 million).

·Net income attributable to the Company’s shareholders decreased by 1.4% YoY to RMB501.1 million ($79.0 million).

·Net cash provided by operating activities was RMB613.6 million ($96.8 million), compared to RMB630.7 million of the prior year period.

 

“Despite difficulties from the ‘dynamic-zero COVID’ policies and measures adopted by our operating regions in China, which continued to impede our client access, promotional activities and daily operations for the reporting quarter, the Company recorded 16,423 new subscribers, and the accumulated subscriber base exceeded 970,000 by end of the reporting quarter, in line with management expectations,” said Ms. Ting Zheng, Chief Executive Officer and Chairperson of GCBC. “Looking into fiscal 2023, the business environment in terms of COVID control measures, industry regulatory uncertainties and downward newborn trend is likely to remain. As such, management expects the cord blood stem cell storage business will continue to come under pressure with the number of new subscribers in fiscal 2023 expected to range between 62,000 to 66,000.”

 

 

 

 

 

Summary – Fourth Quarter and Full Year Ended March 31, 2021 and 2022

 

   Three Months Ended March 31,   Year Ended March 31, 
   2021   2022   2021   2022 
(In thousands)  RMB   RMB   US$   RMB   RMB   US$ 
Revenues   302,321    297,209    46,884    1,159,639    1,243,255    196,119 
Gross Profit   256,413    255,233    40,263    980,692    1,059,948    167,203 
Operating Income3    148,243    142,138    22,423    544,870    608,865    96,045 
Change in Fair Value of Equity Securities   (4,722)   (13,975)   (2,204)   25,385    (20,391)   (3,217)
Net Income Attributable to the Company’s Shareholders   127,734    104,716    16,520    508,247    501,065    79,041 
Earnings per Share                              
– Basic (RMB/US$)   1.05    0.86    0.14    4.18    4.12    0.65 
– Diluted (RMB/US$)   1.05    0.86    0.14    4.18    4.12    0.65 
                               
Revenues Breakdown (%)                              
Processing Fees and Other Services   58.1%   53.6%        57.5%   56.7%     
Storage Fees   41.9%   46.4%        42.5%   43.3%     
New Subscribers (persons)   19,367    16,423         72,045    74,147      
Total Accumulated Subscribers (persons)   901,437    970,3751         901,437    970,3751      

 

Summary – Selected Cash Flow Statement Items

 

   Three Months Ended March 31,   Year Ended March 31, 
   2021   2022   2021   2022 
(In thousands)  RMB   RMB   US$   RMB   RMB   US$ 
Net cash provided by operating activities   211,079    162,030    25,559    630,710    613,608    96,794 
Net cash used in investing activities   (2,791)   (6,257)   (987)   (20,107)   (19,635)   (3,098)
Net cash used in financing activities   -    -    -    (6,074)   (7,729)   (1,219)

 

Fourth Quarter Fiscal 2022 Financial Results

 

REVENUES. Revenues decreased by 1.7% YoY to RMB297.2 million ($46.9 million) in the fourth quarter of fiscal 2022, as the decrease in processing fees revenues outpaced the increase in storage fees revenues.

 

During the reporting quarter, new subscribers decreased by 15.2% YoY to 16,423 and revenues generated from processing fees and other services decreased by 9.3% YoY to RMB159.3 million ($25.1 million). Revenues from processing fees and other services represented 53.6% of total revenues, compared to 58.1% in the prior year period.

 

As of March 31, 2022, the accumulated subscriber base had expanded to 970,3751. As a result, revenues generated from storage fees increased by 8.8% YoY to RMB137.9 million ($21.8 million) in the reporting quarter.

 

 

 

 

 

GROSS PROFIT. Gross profit for the fourth quarter decreased slightly to RMB255.2 ($40.3 million) from RMB256.4 million in the prior year period due to the decline in new subscriber number. Gross margin edged up to 85.9% from 84.8% in the prior year period.

 

OPERATING INCOME. Operating income for the reporting quarter decreased by 4.1% YoY to RMB142.1 million ($22.4 million). Operating margin was 47.8% compared to 49.0% in the prior year period. Depreciation and amortization expenses for the fourth quarter were RMB11.8 million ($1.9 million), compared to RMB12.2 million in the prior year period. Non-GAAP operating income2 decreased by 4.1% YoY to RMB153.9 million ($24.3 million) in the reporting quarter.

 

Research and Development Expenses. Research and development expenses incurred in the fourth quarter amounted to RMB4.8 million ($0.8 million), compared to RMB5.5 million in the prior year period.

 

Sales and Marketing Expenses. During the reporting quarter, the Company maintained its marketing and promotional efforts on budget to combat challenges from anti-pandemic measures as well as the downward newborn trend. Sales and marketing expenses remained at approximately RMB59.5 million ($9.4 million). Sales and marketing expenses as a percentage of revenue was 20.0%.

 

General and Administrative Expenses. General and administrative expenses increased to RMB48.8 million ($7.7 million) from RMB43.2 million in the prior year period, mainly attributable to an increase in professional fees partially offset by a reduction in staff cost. General and administrative expenses as a percentage of revenues was 16.4%, compared to 14.3% in the prior year period.

 

OTHER INCOME.

 

Change in fair value of equity securities. During the reporting period, the Company recognized a mark-to-market loss of RMB14.0 million ($2.2 million), compared to a mark-to-market loss of RMB4.7 million in the prior year period. The changes were mainly attributable to the Company’s investments in equity securities.

 

NET INCOME ATTRIBUTABLE TO THE COMPANY’S SHAREHOLDERS. Income before income tax for the fourth quarter decreased by 9.5% YoY to RMB140.1 million ($22.1 million). Net income attributable to the Company’s shareholders for the reporting quarter decreased by 18.0% YoY to RMB104.7 million ($16.5 million) due to an increase in income tax expense. Net margin for the reporting quarter was 35.2%, compared to 42.3% in the prior year period.

 

EARNINGS PER SHARE. Basic and diluted earnings per ordinary share for the fourth quarter of fiscal 2022 was RMB0.86 ($0.14).

 

Full Year Fiscal 2022 Financial Results

 

Total revenues for the full year of fiscal 2022 increased by 7.2% YoY to RMB1,243.3 million ($196.1 million). Revenues from processing fees and other services increased by 5.8% YoY to RMB705.4 million ($111.3 million), and revenues from storage fees increased by 9.1% YoY to RMB537.9 million ($84.8 million). Gross profit increased by 8.1% YoY to RMB1,059.9 million ($167.2 million). Operating income increased by 11.7% YoY to RMB608.9 million ($96.0 million). Non-GAAP operating income2 increased by 10.6% YoY to RMB656.8 million ($103.6 million). Net income attributable to the Company’s shareholders was RMB501.1 million ($79.0 million). Basic and diluted earnings per ordinary share was RMB4.12 ($0.65). Net cash provided by operating activities in the full year of fiscal 2022 was RMB613.6 million ($96.8 million).

 

 

 

 

 

Corporate Developments

 

·On April 29, 2022, the Company announced its intention to acquire 100% of Cellenkos, Inc. (“CLNK”) and the rights to develop and commercialize all of its existing and future products worldwide except those related to CLNK’s existing collaboration with Incyte Corporation (Nasdaq: INCY) (the “CLNK Acquisition”). The announcement stated that the Company had entered into agreements with the holders of approximately 95% of CLNK outstanding equity interest and GM Precision Medicine (BVI) Limited and, following the entry into an agreement on substantially the same terms with the remaining 5% holder, at closing, that the Company would issue approximately 125 million new shares (on an as-converted and fully diluted basis) valued at $11 per share and pay $664 million in cash as total consideration. Elements of the first stage of the CLNK Acquisition, namely, the payment of $664 million, the issue of 12,363,636 of the 125 million new shares, and the acquisition of certain assets in connection therewith ("Stage 1"), completed on April 29, 2022 and May 4, 2022 respectively. The remaining stages of the CLNK Acquisition have not completed at the time of writing.

 

·The CLNK Acquisition and the possibility of its completion (or the status with regards to Stage 1) is the subject of pending legal proceedings brought by Blue Ocean Structure Investment Company Limited (“Blue Ocean”) against, among others, the Company and the current board of directors, save for Blue Ocean’s appointee Mr. Xu Ping. Among other things, completion of the CLNK Acquisition is currently prohibited by an interim injunction obtained by Blue Ocean on May 12, 2022 (as varied).

 

·The Company cautions its shareholders and others considering trading its ordinary shares that the status of the CLNK Acquisition is the subject of legal proceedings.

 

·This earnings release has been reviewed and approved by all members of the Board except Mr. Xu Ping.

 

 

1 During the three months and year ended March 31, 2022, 16,423 and 74,147 new subscribers were recruited. During the three months and year ended March 31, 2022, the Company determined that the recoverability of 1,251 and 4,548 private cord blood units was remote and therefore, the Company terminated their subscription services according to the subscription contracts. Out of these prior private cord blood units, 983 and 3,666 prior private cord blood units were being treated as if they were donated cord blood units and will be part of the Company’s non-current inventories. As of March 31, 2022, 661 subscription contracts expired. Hence, the net accumulated subscriber base was 970,375 as of March 31, 2022.

 

2 See exhibit 3 to this press release for a reconciliation of non-GAAP operating income to exclude the non-cash items related to the depreciation and amortization expenses to the comparable financial measure prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

 

3 The reported operating income for the three months ended March 31, 2021 and 2022 included depreciation and amortization expenses related to property, plant and equipment and intangible assets of RMB12.2 million and RMB11.8 million ($1.9 million), respectively. The reported operating income for the year ended March 31, 2021 and 2022 included depreciation and amortization expenses related to property, plant and equipment and intangible assets of RMB49.1 million and RMB47.9 million ($7.6 million), respectively.

 

 

 

 

 

Use of Non-GAAP Financial Measures

 

GAAP results for the three months and year ended March 31, 2022, include non-cash items related to depreciation and amortization expenses. To supplement the Company’s unaudited condensed consolidated financial statements presented on a U.S. GAAP basis, the Company has provided adjusted financial information excluding the impact of these items in this press release. The non-GAAP financial measure represents non-GAAP operating income. Such adjustment is a departure of U.S. GAAP; however, the Company’s management believes that these adjusted measures provide investors with a better understanding of how the results relate to the Company’s historical performance. Also, management uses non-GAAP operating income as a measurement tool for evaluating actual operating performance compared to budget and prior periods. These adjusted measures should not be considered an alternative to operating income, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. These measures are not necessarily comparable to a similarly titled measure of another company. A reconciliation of the adjustments to U.S. GAAP results appears in exhibit 3 accompanying this press release. This additional adjusted information is not meant to be considered in isolation or as a substitute for U.S. GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies.

 

About Global Cord Blood Corporation

 

Global Cord Blood Corporation is the first and largest umbilical cord blood banking operator in China in terms of geographical coverage and the only cord blood banking operator with multiple licenses. Global Cord Blood Corporation provides cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services. For more information, please visit the Company’s website at: http://www.globalcordbloodcorporation.com.

 

Safe Harbor Statement

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company’s future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates”, “believes”, “expects”, “can”, “continue”, “could”, “estimates”, “intends”, “may”, “plans”, “potential”, “predict”, “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this press release is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this press release is issued, and the Company does not intend to update any of the forward-looking statements after the date this press release is issued to conform these statements to actual results, unless required by law.

 

The forward-looking statements included in this press release are subject to risks, uncertainties and assumptions about the Company’s businesses and business environments. These statements reflect the Company’s current views with respect to future events and are not a guarantee of future performance. Actual results of the Company’s operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: the ongoing impact of 2019 novel coronavirus (“COVID-19”), including the partial lockdowns implemented in various cities in the People’s Republic of China, or PRC and the imposition by some hospitals in the PRC of restrictions on entrance to solely to hospital staff and patients; levels of consumer confidence in the healthcare services sector generally in the PRC as a result of the outbreak; the length of the COVID-19 outbreak and severity of such outbreak across the globe; the pace of recovery following the COVID-19 outbreak; continued compliance with government regulations regarding cord blood banking in the PRC and any other jurisdiction in which the Company conducts its operations; changing legislation or regulatory environments in the PRC (including but not limited to cord blood license related regulations, Biosecurity laws, antitrust laws) and any other jurisdiction in which the Company conducts its operations; the acceptance by subscribers of the Company’s different pricing and payment options and reaction to the introduction of the Company’s premium-quality pricing strategy; demographic trends in the regions of the PRC in which the Company is the exclusive licensed cord blood banking operator; labor and personnel relations; the existence of a significant shareholder able to influence and direct the corporate policies of the Company; credit risks affecting the Company’s revenue and profitability; changes in the healthcare industry, including those which may result in the use of stem cell therapies becoming redundant or obsolete; the Company’s ability to effectively manage its growth, including maintaining effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; the availability of capital resources, including in the form of capital markets financing opportunities, in light of legislative developments in the U.S. affecting listed issuers whose independent registered public accounting firms are based in China and not subject to U.S. Public Company Accounting Oversight Board inspections, international pressure on trade and currency against the PRC and its potential impact on the PRC consumer behavior, as well as general economic conditions, the potential CLNK Acquisition and related litigation matters pending in the Cayman Islands and the British Virgin Islands, and other relevant risks detailed in the Company’s filings with the Securities and Exchange Commission in the United States.

 

 

 

 

 

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars as of and for the period ended March 31, 2022 were made at the noon buying rate of RMB6.3393 to $1.00 on March 31, 2022 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. Global Cord Blood Corporation makes no representation that the Renminbi or U.S. dollar amounts referred to in this press release could have been or could be converted into U.S. dollars or Renminbi, at any particular rate or at all.

 

For more information, please contact:

 

Global Cord Blood Corporation

Investor Relations Department

Tel: (+852) 3605-8180

Email: [email protected]

 

ICR, Inc.

William Zima

Tel: (+86) 10-6583-7511

U.S. Tel: (646) 405-5185

Email: [email protected]

 

 

 

 

EXHIBIT 1

 

GLOBAL CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2021 and 2022

 

   March 31,   March 31, 
   2021   2022 
   RMB   RMB   US$ 
   (in thousands except share data) 
ASSETS            
Current assets               
Cash and cash equivalents   6,075,798    6,660,984    1,050,744 
Accounts receivable, less allowance for credit losses (March 31, 2021: RMB137,961; March 31, 2022: RMB160,445 (US$25,309))   130,298    161,302    25,445 
Inventories   44,257    45,879    7,237 
Prepaid expenses and other receivables   47,788    66,838    10,545 
Total current assets   6,298,141    6,935,003    1,093,971 
Property, plant and equipment, net   498,656    473,811    74,742 
Operating lease right-of-use assets   5,039    2,880    454 
Non-current deposits   344,752    346,228    54,616 
Non-current accounts receivable, less allowance for credit losses (March 31, 2021: RMB67,095; March 31, 2022: RMB59,037 (US$9,313))   217,208    254,798    40,193 
Inventories   91,446    95,163    15,012 
Intangible assets, net   88,202    83,581    13,184 
Investment in equity securities at fair value   117,911    93,174    14,698 
Other equity investment   189,129    189,129    29,834 
Deferred tax assets   55,845    60,758    9,584 
Total assets   7,906,329    8,534,525    1,346,288 
                
LIABILITIES               
Current liabilities               
Accounts payable   9,479    8,330    1,314 
Accrued expenses and other payables   136,448    148,659    23,451 
Operating lease liabilities   1,636    147    23 
Deferred revenue   449,359    458,262    72,289 
Income tax payable   29,547    31,160    4,915 
Total current liabilities   626,469    646,558    101,992 
Non-current deferred revenue   2,392,906    2,473,549    390,193 
Non-current operating lease liabilities   147    -    - 
Other non-current liabilities   482,224    505,166    79,688 
Deferred tax liabilities   16,132    24,280    3,830 
Total liabilities   3,517,878    3,649,553    575,703 
                
EQUITY            
Shareholders’ equity of Global Cord Blood Corporation            
Ordinary shares               
-  US$0.0001 par value, 250,000,000 shares authorized, 121,687,974 and 121,551,075 shares issued and outstanding as of March 31, 2021 and 2022, respectively   83    83    13 
Additional paid-in capital   2,101,582    2,101,582    331,516 
Treasury stock, at cost (March 31, 2021 and 2022: 136,899 shares, respectively)   (2,815)   (2,815)   (444)
Accumulated other comprehensive losses   (103,179)   (106,786)   (16,845)
Retained earnings   2,386,187    2,887,252    455,453 
Total equity attributable to Global Cord Blood Corporation   4,381,858    4,879,316    769,693 
Non-controlling interests   6,593    5,656    892 
Total equity   4,388,451    4,884,972    770,585 
Total liabilities and equity   7,906,329    8,534,525    1,346,288 

 

 

 

 

EXHIBIT 2

 

GLOBAL CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months and Year Ended March 31, 2021 and 2022

 

   Three months ended March 31,   Year ended March 31, 
   2021   2022   2021   2022 
   RMB   RMB   US$   RMB   RMB   US$ 
   (in thousands except per share data) 
Revenues   302,321    297,209    46,884    1,159,639    1,243,255    196,119 
Cost of revenues   (45,908)   (41,976)   (6,621)   (178,947)   (183,307)   (28,916)
Gross profit   256,413    255,233    40,263    980,692    1,059,948    167,203 
Operating expenses                              
Research and development   (5,486)   (4,780)   (754)   (23,769)   (22,296)   (3,517)
Sales and marketing   (59,513)   (59,482)   (9,383)   (237,691)   (241,725)   (38,132)
General and administrative   (43,171)   (48,833)   (7,703)   (174,362)   (187,062)   (29,509)
Total operating expenses   (108,170)   (113,095)   (17,840)   (435,822)   (451,083)   (71,158)
Operating income   148,243    142,138    22,423    544,870    608,865    96,045 
Other income/(expenses), net                              
Interest income   8,132    8,426    1,329    30,899    32,609    5,144 
Foreign currency exchange (losses)/gains   (28)   (247)   (39)   155    (642)   (101)
Change in fair value of equity securities   (4,722)   (13,975)   (2,204)   25,385    (20,391)   (3,217)
Dividend income   -    -    -    1,281    1,120    177 
Others   3,091    3,723    587    8,161    6,274    990 
Total other income/(expenses), net   6,473    (2,073)   (327)   65,881    18,970    2,993 
Income before income tax   154,716    140,065    22,096    610,751    627,835    99,038 
Income tax expense   (24,415)   (33,267)   (5,248)   (94,546)   (118,352)   (18,669)
Net income   130,301    106,798    16,848    516,205    509,483    80,369 
Net income attributable to non-controlling interests   (2,567)   (2,082)   (328)   (7,958)   (8,418)   (1,328)
Net income attributable to Global Cord Blood Corporation’s shareholders   127,734    104,716    16,520    508,247    501,065    79,041 
                               
Earnings per share                        
Attributable to ordinary shares                              
- Basic   1.05    0.86    0.14    4.18    4.12    0.65 
- Diluted   1.05    0.86    0.14    4.18    4.12    0.65 
                               
Other comprehensive income/(losses), net of nil income taxes                              
Foreign currency translation adjustments   414    (68)   (11)   (8,516)   (3,607)   (569)
Comprehensive income   130,715    106,730    16,837    507,689    505,876    79,800 
                               
Comprehensive income attributable to non-controlling interests   (2,567)   (2,082)   (328)   (7,958)   (8,418)   (1,328)
Comprehensive income attributable to GCBC’s shareholders   128,148    104,648    16,509    499,731    497,458    78,472 

 

 

 

 

 

EXHIBIT 3

 

GLOBAL CORD BLOOD CORPORATION

RECONCILIATION OF NON-GAAP OPERATING INCOME

For the Three Months and Year Ended March 31, 2021 and 2022

 

   Three months ended March 31,   Year ended March 31, 
   2021   2022   2021   2022 
   RMB   RMB   US$   RMB   RMB   US$ 
   (in thousands) 
GAAP amount of operating income   148,243    142,138    22,423    544,870    608,865    96,045 
Depreciation and amortization expenses4    12,171    11,770    1,857    49,090    47,922    7,560 
Non-GAAP operating income   160,414    153,908    24,280    593,960    656,787    103,605 

 

 

4 Depreciation and amortization expenses relate to property, plant and equipment and intangible assets, respectively.