NetDragon Announces 2019 Interim Financial Results

NetDragon Websoft Holdings Limited (‘NetDragon’ or the ‘Company’; Hong Kong Stock Code: 777), a global leader in building internet communities, today announced its financial results for the first half of 2019. NetDragon’s management team will host an analyst briefing session at 10:00am Hong Kong time at Nathan Room, Lower Lobby in Conrad Hong Kong on 29 August 2019 to discuss the results and recent business developments. 

Mr. Dejian Liu, Chairman of NetDragon, commented, “We are excited that NetDragon delivered yet another record first half in 2019. Our revenue reached RMB2,672.5 million with 8.2% year-over-year growth, while profit attributable to shareholders more than doubled to RMB421.0 million from RMB200.7 million last year.”

“Our gaming business maintained its strong growth momentum with 51.6% year-over-year revenue growth in the first half. Mobile games revenue jumped by 76.2% year-over-year, while PC games maintained its remarkable growth with 47.5% year-over-year increase in revenue. Our performance in the first half was driven by across-the-board revenue growth coming from all of our major IPs, including Eudemons Online, Heroes Evolved and Conquer Online. We will continue to execute our growth strategy on the back of a strong pipeline and our approach to maximize IP values.”

“Our education business also delivered solid performance as our subsidiary Promethean continued its global market leadership position in K-12 interactive classroom technologies with the largest market share in international markets. Our core business continued to perform as our shipment volume of interactive flat panels in most of our core regions increased substantially in the first half year-over-year. The large Moscow phase-two tender was a major revenue contributor in second quarter of last year, which led to a year-over-year drop in overall revenue for our education business in the first half. That being said, we are seeing strong traction with our tender business as we see unprecedented volume of tender opportunities in the market, including those in Egypt, Russia and Turkey, and our ability to win these opportunities is stronger than ever. On the product side, we are excited by the commencement of the shipment of our new ActivPanel Elements Series in the second quarter. Customer feedback has been very positive, and its premium model, namely ActivPanel Titanium, was a recent winner of the prestigious Red Dot Design Award. As such, we expect Promethean to see a very strong second half. Last but not least, we are under way to monetize our user base in our online community Edmodo with a SaaS model as we are set to roll out our online tutoring services (AskMo) in the beginning of the upcoming school year.”

“In China, we are starting to execute our go-to-market strategy to start large-scale penetration of our Promethean offerings with a recent major win in Fuzhou. We have also more than doubled the installed base of our flagship platform 101 Education PPT to 6.0 million as at 30 June 2019, and our active coverage with this platform has surpassed over 10 million students. In addition, we are on track to complete the development of our content distribution platform within 101 Education PPT in the second half of this year, which will pave the way for us to start content monetization.”

2019 First Half Financial Highlights

– Revenue was RMB2,672.5 million, representing a 8.2% increase year-over-year.
– Revenue from the gaming business was RMB1,575.8 million, representing 59.0% of the Company’s total revenue and registering a 51.6% increase year-over-year. 
– Revenue from the education business was RMB1,048.5 million, representing 39.2% of the Company’s total revenue and registering a 24.2% decrease year-over-year. Excluding phase-two of the Moscow order in the second quarter of 2018, revenue from the education business represented a 4.7% increase year-over-year. 
– Gross profit was RMB1,865.0 million, representing a 33.0% increase year-over-year.
– Cash inflow from operating activities was RMB420.3 million, compared to cash outflow from operating activities of RMB156.7 million for the same period of last year.
– Core segmental profit from the gaming business was RMB972.1 million, representing a 85.4% increase year-over-year. 
– Core segmental loss2 from the education business was RMB308.9 million, representing a 94.7% increase year-over-year. The increase was largely due to consolidation of Edmodo for the full 6-month period and seasonality of the Moscow order as noted above. 
– Non-GAAP operating profit was RMB543.1 million, representing a 117.9% increase year-over-year.
– Profit attributable to owners of the Company was RMB421.0 million, representing a 109.7% increase year-over-year.
– The company declared an interim dividend of HK$0.15 per share for the six months ended 30 June 2019.

Gaming Business 

Our gaming business revenue increased by 51.6% year-over-year to RMB1,575.8 million in the first half. Mobile games revenue soared by 76.2% year-over-year, while PC games revenue growth remained robust at 47.5% year-over-year. We also performed well in the overseas markets and recorded 52.1% increase in revenue year-over-year. As a result of strong top line growth and positive operating leverage, gaming business’s core segmental profit surged by 85.4% year-over-year. 

In particular, our flagship IP Eudemons recorded 56.5% year-over-year increase in revenue of our PC and mobile version combined. On the back of our marketing activities and new expansion packs, we managed to increase gamers’ loyalty and usage activities, while at the same time optimizing spending. One of the major marketing initiatives we carried out during the period was cross-industry collaboration with renowned celebrities and brands to enhance the market influence of our Eudemons IP in the first half of the year. The result is a revenue growth of our Eudemons IP that goes along with substantial increase in number of our active players as well as paying accounts. 

Our other two major IPs, namely Heroes Evolved and Conquer Online, also recorded solid revenue growth of 27.0% and 43.0% year-over-year respectively during the period. Such revenue growth was attributable to our effort in marketing and promotion that has started to pay off. IP crossover collaboration was also a major theme, including a partnership to integrate OVERLORD, a popular Japanese anime, with our Heroes Evolved IP during the first quarter of the year, which led to a significant increase in gross billings. We also significantly stepped up our effort in enhancing the contents and user experience for our players in Conquer Online as we launched a total of 4 expansion packs during the first half. 

Looking forward, we will continue to drive revenue and profit growth by maximizing our IP values with new games and new game-play features, as well as expanding our IP portfolio. We have a robust pipeline with over 10 new games under development or in testing stage, including Eudemons II, Heroes Evolved “Thrones”, Battle of Giants, Cyber Legends and Vow of Heroes. We are in a position to launch multiple new games with different genres in the second half of the year, as we see a gradual opening up of new game licensing approvals by regulatory authorities. 

Education Business

For the first half of 2019, revenue from the education business was RMB1,048.5 million, down 24.2% year-over-year. Excluding revenue from the large Moscow tender in the second quarter of last year (which we exclude for more comparable presentation as tender revenue tends to be irregular in timing), revenue from the education business represented a 4.7% increase year-over-year. Our subsidiary Promethean continued to perform as shipment volume of our interactive flat panels increased by 28.9% in the first half year-over-year, excluding the Moscow tender as noted above. Our tender business is also seeing strong traction, as the global wave to digitize classrooms and leverage technologies to improve learning has resulted in an unprecedented volume of tender opportunities, especially in several emerging markets such as Egypt, Russia and Turkey. In January of this year, we have signed a MOU with The Ministry of Education of Egypt to design and deliver a total of 265,000 “Pop-up” classrooms with our education products including Promethean panels as well as our software platforms. Taking into account the momentum we are seeing with both our core business and tender opportunities, we expect Promethean to see a strong second half of 2019. 

We have also made great progress in product innovation. During the period, Promethean rolled out our next-generation interactive panel, the ActivPanel Elements Series, which is purpose-built to make teaching and learning more effective in a networked learning environment. Specifically, the Element Series will benefit teachers by enabling them to connect with students and use online content and applications to increase learning outcome while keeping students engaged. The result is a platform which provides the foundation for future online monetization at the classroom level. This ground-breaking innovation has earned the Promethean ActivPanel Titanium model a recent winner of the prestigious Red Dot Design Award. The shipment of the AcitvPanel Elements Series commenced in the second quarter and we are seeing great demand going into the second half of the year. 

We continue to execute our monetization strategy at the home level, as we are on track to launch our online homework help service within Edmodo in the beginning of the upcoming school year starting in September. We also expect to broaden our tutoring service to online 1-to-1 and 1-to-few video tutoring by the end of this year. 

In China, our strategy focus is to both expand user coverage and work towards monetization via a SaaS model. We have started to execute our go-to-market strategy to start large-scale penetration of our Promethean offerings, and we are excited to announce our first major win recently in Fuzhou covering approximately one hundred classrooms. Furthermore, we are continuing to deepen our penetration of our flagship software platform 101 Education PPT with 6.0 million installations as at 30 June 2019 achieving a coverage of over 10 million active students. We are also on track to complete the development of our content distribution platform within 101 Education PPT in the second half of this year, which will pave the way for monetization by enabling consumption of paid value-added contents on the platform. Last but not least, we are seeing a number of school-level SaaS platform opportunities which we are in a strong position to capitalize on given our capability to provide a complete product offering with unparalleled technology and design. 

Looking forward, we are optimistic about the outlook as a result of rising traction in tender business, new product shipment as well as online user monetization. We believe our product differentiation and leading technologies will enable us to be fulfil our mission to revolutionize education with advanced technologies.

About NetDragon Websoft Holdings Limited

NetDragon Websoft Holdings Limited (HKSE: 0777) is a global leader in building internet communities with a long track record of developing and scaling multiple internet and mobile platforms that impact hundreds of millions of users. These include China’s number one online gaming portal, 17173.com, and China’s most influential smartphone app store platform, 91 Wireless, which was sold to Baidu for US$1.9 billion in 2013 as the largest Internet M&A transaction in China. 

Established in 1999, NetDragon is one of the most reputable and well-known online game developers in China with a history of successful game titles including Eudemons Online, Heroes Evolved and Conquer Online. In recent years, NetDragon has also started to scale its online education business on the back of management’s vision to create the largest global online learning community, and to bring the “classroom of the future” to every school around the world. 

For investor enquiries, please contact:
NetDragon Websoft Holdings Limited
Ms. Maggie Zhou
Senior Director of Investor Relations
Tel.: +852 2850 7266 / +86 591 8390 2825
Email: maggie@nd.com.cn
Website: ir.netdragon.com

China Success Finance Announces 2019 Interim Results

China Success Financial Group Holdings Limited (“China Success Finance” or the “Company”, together with its subsidiaries the “Group”, stock code: 03623 is pleased to announce its unaudited interim results for the six months ended 30 June 2019.

During the reporting period, the Group continued to promote the implementation of its business strategy. The Group’s investment focused on guarantee business and the segment grew rapidly, bringing significant income to the Group. Therefore, the Group’s total revenue surged 142.9% year-on-year to approximately RMB 39.1 million as compared with the same period in last year. However, the Group recorded a one-time investment net loss on joint ventures, meanwhile the Group’s provision for impairment losses increased significantly as compared to the same period in last year. In addition, as the Group strived to transform its business, interest income from leasing and factoring decreased as compared to the same period in last year. As a result, the Group recorded a decrease in net profit during the first half of 2019. During the reporting period, the Group’s losses before taxation and for the period were approximately RMB 19.9 million and RMB 20.8 million respectively (2018 Interim: approximately RMB 5.7 million and 9.7 million respectively). The Board did not recommend to distribute an interim dividend for 2019.

Mr. Zhang Tiewei, Chairman and Executive Director of China Success Finance indicated, “In the first half of 2019, the global economy continued to be clouded by uncertainties, while the gross domestic product growth rates of major economies experienced slowdown. The Group grasped opportunities created by national development trend and market upgrade, gradually propelling transition, improving strategic planning and steadily optimising business operations. Meanwhile, the Group adopted a multi-pronged approach to improve business structure, facilitated stable development of its traditional operations and actively promoted the development of its innovative business, in order to provide comprehensive, professional and efficient integrated financial services to customers. Capitalising on business innovation and transformation in recent years, achievements in business strategy have been gradually witnessed.”

Regarding guarantee business, the Group’s revenue significantly increased by 3.2 times to RMB 34.7 million during the reporting period (2018 Interim: RMB 8.2 million). The Group maintained stable operation of traditional businesses, whilst actively planning for the rapid development of financial inclusion. The Group also explored financial technology business by devoting more resources, establishing a talented technical team, and fostering strong win-win partnerships with reputable and sizable clients and platforms. Meanwhile, by utilising technological tools including the internet, big data and cloud computing, the Group managed to constantly improve its risk management system and boost efficiency in risk control. During the reporting period, as the number of new business partners and customers grew and scaled, the Group realised satisfactory business growth momentum, which laid a solid foundation for future business development.

For financial leasing and factoring business, the Group continued to provide financial leasing services to customers and satisfied the demand for leasing services during the construction within the Greater Bay Area. The Group made use of the resources from both Mainland China and Hong Kong to actively provide high-quality resource deployment services, while bolstering its cooperation mechanism and devising plans to contribute to the construction of the Greater Bay Area. During the reporting period, revenue from financial leasing and factoring business were RMB 5.2 million (2018 Interim: RMB 12.4 million).

Despite the generally stable and sound economic development in China in the first half of the year, the downside risk in China’s economy will increase due to the recently imposed tariffs on Chinese goods by the U.S. and global economic slowdown. Looking forward to the second half of 2019, the Chinese government will focus on a series of measures, including encouraging healthy development of private investment, strengthening marketisation reform, propelling rapid development of financial inclusion and further opening up the economy, in order to optimise the business environment so as to broaden its appeal to foreign businessmen.

Looking forward, Mr. Zhang Tiewei said, “In the second half of 2019, the Group will seize opportunities and actively respond to government’s policy in supporting micro, small and medium-sized enterprises, and steadily develop traditional business. The Group will also continue to develop innovative financial technology business, actively participate in propelling comprehensive services in the Greater Bay Area and provide diversified financial services to customers. Meanwhile, the Group established a fund to actively explore new investment opportunities through share purchases or acquisitions, in order to realise fast business development and enhance its core competitiveness, thus maximising returns for investors and shareholders.”

About China Success Finance Group Holdings Limited
China Success Finance Group Holdings Limited is a leading private financial group in China, and the first financial group with guarantee service as a major business in China to be listed on the Main Board of The Stock Exchange of Hong Kong Limited. The Group has elevated from its traditional business in guarantee and microcredit since its listing, to a diversified and comprehensive financial service platform with services including asset management, fund management, investment and acquisition, financial leasing, financial guarantee, overseas capital, housing finance, and microcredit. Meanwhile, the Group maintained its business foundation in the Pearl River Delta Region with Foshan as the center, and provide comprehensive and professional financial services to the development of the Guangdong-Hong Kong-Macao Greater Bay Area. 

For more information, please visit the website of China Success Finance Group Holdings Limited: http://www.chinasuccessfinance.com/

TransCanna Announces Warrant Listing

TransCanna Holdings Inc. (CSE: TCAN) (FSE: TH8) (“TransCanna” or the “Company”) announces that effective at the opening on August 27, 2019, 4,207,083 common share purchase warrants will commence trading on the Canadian Securities Exchange – CSE under the symbol TCAN.WT. These warrants were issued pursuant to a private placement financing, the closing of which was announced on April 4, 2019. Each warrant entitles the holder to purchase one common share of the Company will expire on April 4, 2022. Odyssey Trust Company of Canada is Transfer Agent for these warrants.

For further information, please visit the Company’s website at www.transcanna.com.

About TransCanna Holdings Inc.

TransCanna Holdings Inc. is a Canadian-based company focused on providing integrated branding, transportation and distribution services, through its wholly-owned California subsidiaries, to a range of industries including the cannabis marketplace.

For further information, please visit the Company’s website at www.transcanna.com or email the Company at info@transcanna.com.

Media Contact
TransCanna@talkshopmedia.com
604-738-2220

On behalf of the Board of Directors
Stephen Giblin
Director
Telephone: (604) 609-6199

Universal Medical Announced its 2019 Interim Results

The board (the “Board”) of directors (the “Directors”) of Genertec Universal Medical Group Company Limited (the “Company” or “Universal Medical”) is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries for the six months ended 30 June 2019.

2019 INTERIM RESULTS HIGHLIGHTS
– Revenue amounted to approximately RMB3,195.4 million, representing an increase of 52.5% as compared with that of approximately RMB2,094.8 million for the corresponding period of 2018.
– Profit for the period amounted to approximately RMB872.5 million, representing an increase of 19.0% as compared with that of approximately RMB733.3 million for the corresponding period of 2018.
– Profit for the period attributable to ordinary shareholders of the parent amounted to approximately RMB812.0 million, representing an increase of 10.4% as compared with that of approximately RMB735.5 million for the corresponding period of 2018.
– Total assets amounted to approximately RMB57,577.8 million, representing an increase of 21.8% as compared with that of approximately RMB47,256.9 million as at 31 December 2018.
– Attributable to ordinary shareholders of the parent amounted to approximately RMB8,801.6 million, representing an increase of 4.8% as compared with that of approximately RMB8,395.6 million as at 31 December 2018.
– Return on equity was 18.89% and return on assets was 3.33%.

In the first half of 2019, the Group made remarkable progress in terms of depth and breadth in healthcare industry, steadily implemented its development strategy and further strengthened its business foundation. Focusing on its strategic development objective of building a leading medical and health conglomerate in China, the Company carried out the business layout for hospital group on all fronts and stably developed the medical finance business, along with further developing medical technology services and medical digitalization business. As a result, the Group’s comprehensive strength continued to be reinforced and its operating results kept growing steadily. For the reporting period, the Group recorded revenue of RMB3,195.4 million, representing an increase of 52.5% as compared to the corresponding period of the previous year; recorded profit of RMB872.5 million, representing an increase of 19.0% as compared to the corresponding period of the previous year; recorded profit attributable to the ordinary shareholders of the Company of RMB812.0 million, representing an increase of 10.4% as compared to the corresponding period of the previous year; and it recorded total assets of RMB57,577.8 million on 30 June 2019, representing an increase of 21.8% as compared to the year end of 2018. The Company’s assets recorded a sound growth, with leading asset quality in the industry.

Hospital Group Business

In the first half of 2019, fully leveraging its strengths in resources and proactively making the most of opportunities from the market and policies, the Group carried out its business layout for hospital group on all fronts. Firstly, the Group continuously pushed forward integration and takeover of medical institutions of SOEs, and has made great progress. Secondly, the Group steadily integrated the management of cooperating medical institutions to establish a conglomerate management system. Thirdly, the Group continued its hospital investment and construction and solid implementation of its operating projects. To date, the Group’s nationwide medical services network has been gradually established, and an advanced modern hospital group has begun to take shape.

The Company has been building up a tightly-knit medical network surrounding key regions and cities across the country, and gradually establishing a number of regional medical centers in the country, laying a solid foundation for building a nationwide medical and health conglomerate with synergic advantages. As of 30 June 2019, the Group had acquired 16 medical institutions, of which, two are Grade III Class A hospitals and nine are Grade II hospitals, with operating capacity of 4,193 beds in total. The number of outpatient visits and inpatient visits amounted to 1.231 million and 67,000, respectively, and the hospital operation recorded revenue of RMB962.8 million in the first half of 2019. In the future, based on local epidemiology survey, the actual situation of each medical institution, and prediction of medical development trends, the Group will enhance the comprehensive strengths and brand awareness of these hospitals by mapping out discipline development, introducing quality medical resources and optimizing operation and management system.

Hospitals are the core resources to support development of medical and health industry. For medical institutions managed by the Group, the Group will comprehensively improve their medical technology, management efficiency and service capabilities by establishing a tightly-knit healthcare network, introducing modern hospital management mode, connecting with top medical resources at home and abroad and promoting development of related disciplines as a whole. The Company will focus on four core strategies of “differential positioning, regional focus, conglomerate management and scale-up development” to establish a medical service network with nationwide coverage and regional integration, and build up a modern hospital group with outstanding technology and efficient management.

The Group entered into cooperation agreements in relation to the investment, construction and operation of hospitals with the First Affiliated Hospital on 30 August 2016, and with the Health Commission of Handan and Handan First Hospital on 9 August 2018, respectively.

Finance and Advisory Business

In the first half of 2019, facing changing environments in domestic and international finance markets and even more fierce competition in finance lease market, the Group worked meticulously in niche market, continuing to improve the width and depth of market penetration, actively adjusting the Company’s financing strategies to optimize debt structures, which contributed to steady increase in the Group’s revenue from financing lease business and asset size. During the reporting period, the Group’s revenue from finance and advisory business increased by 21.3% to RMB2,471.6 million as compared to the corresponding period of the previous year, and profit for the period attributable to ordinary shareholders of the parent for finance and advisory business increased by 7.7% to RMB800.3 million as compared to the corresponding period of the previous year. As always, the Group executed prudent risk control processes and strict asset management measures to ensure that the asset quality remains the leading position in the industry.

At the same time, the Company leveraged the rich medical resources to provide hospital clients with clinical department upgrade advisory services for the prevention, treatment and rehabilitation of CVA and other major diseases with high prevalence. Meanwhile, the Company kept an eye on the international medical development, introduced world-class advanced medical equipment to domestic hospitals, and made organic combination of the construction of hospital departments and overall development, to practically improve medical technology for hospital clients.

Also, leveraging its member hospitals, own technology team and independent research technologies, the Company introduced and brought in external technology team as well as related products and services guided by platform mindset. With three aspects at the core, namely Internet-based healthcare services, smart hospital solutions, and medical big data and artificial intelligence services, the Company persistently improved the construction of medical digitalization for member hospitals of the Group, thus realized the coordination of functions and resources sharing among hospitals within the Group, and improved the hospitals’ operation efficiency and management level.

In the second half of 2019, the Group will continue to develop finance and advisory business on the one hand, to consolidate operating foundation; and on the other hand, will comprehensively promote the business layout of hospital group, accelerate the execution of cooperation projects, steadily implement the integration and management work of cooperating medical institutions and establish a management system for the hospital group, to build up a hospital group with excellent technology and efficient management.

In the future, the Group will continue to focus on the strategic development direction in medical and healthcare sector and seize policy and market opportunities. Starting from the concept of the whole life cycle and the whole industrial chain, with medical services as the core, the Group will simultaneously develop medical finance, medical technology service, medical digitalization, medical health insurance, and medical and elderly care business, to form a closed loop of medical and health service, covering the whole life cycle of patients, and strive to be a leading medical and health conglomerate in China, bringing vitality to the construction of “Healthy China”.

Kidsland Announces 2019 Interim Results

Kidsland International Holdings Limited (“Kidsland” or the “Group”; stock code: 2122), the largest toy retailer and distributor in China, today announced its interim results for the six months ended 30 June 2019 (“the reporting period”). During the reporting period, thanks to sustainably improving revenue growth and better cost control, the Group improved its profitability, laying a solid foundation for sustaining growth in the future.

During the reporting period, net loss was approximately RMB1.9 million, 96.1% lower than that in the same period last year, and adding back non-cash share-based compensations, the Group would record a net profit of approximately RMB3.0 million. EBITDA, prepared on a basis comparable to that used in the prior period, is approximately RMB19.9 million, improving from an EBITDA loss of approximately RMB28.7 million last year.

Revenue of the Group increased by about 4.8% to approximately RMB850.0 million (first half of 2018: RMB811.1 million), with gross profit at approximately RMB361.5 million (first half of 2018: RMB347.0 million) growing by about 7.8%, and gross profit margin improved to about 42.5% in the reporting period. The Group managed to reduce selling and distribution and general and administrative expenses for the period by about 4.7% year-on-year. Increased revenue and gross profit margin and decreased expenses combined translated into significant improvement of the Group’s results.

The Group has an extensive sales network comprising self-operated retail channels and wholesale channels. In the reporting period, the Group optimized its sales network by closing down underperforming shops and resizing and remixing the Group’s product portfolio. As at 30 June 2019, it had 750 (30 June 2018: 781) self-operated retail points of sale, consisting of retail shops and consignment counters, and 849 distributors (30 June 2018: 973). The optimized sales network has allowed the Group to continue to enjoy stable revenue growth and improve efficiency, and in turn, profitability.

The Internet has become a main distribution channel in Mainland China. To leverage on the power of the Internet, the Group operates 20 online stores and has seven online key accounts on platforms such as Tmall, JD.com, Xiaohongshu and Kaola. During the reporting period, the Group’s direct e-commerce (online stores and online key accounts) revenue was RMB80.7 million, growing about 21.4% year-on-year and as of 30 June 2019, represented about 9.5% of the Group’s total revenue (2018: about 8.2%).

In the first half of 2019, the Group also took a big step forward by opening the FAO Schwarz flagship store in Beijing. The store, striving to offer high-quality experiential shopping, has set new heights in the toy industry in Mainland China, bolstered the Group’s reputation, and cemented the Group’s leading position in the marketplace.

Mr. Lee Ching Yiu, Chairman and CEO of Kidsland, said, “Although the mainland economy is going through adjustments and the Sino-US trade war continues, adding uncertainty to the outlook of the retail market, we remain focused on improving our product and sales channel mix and operational efficiency, and we are glad to see our efforts bearing fruit. We believe we are well-positioned to make performance leaps in the near future.”

About Kidsland International Holdings Limited (stock code: 2122)
Kidsland International Holdings Limited (“Kidsland” or “the Group”) is engaged in retail, wholesale, e-commerce and brand operation of toys and infant products in China. As the largest toy retailer and distributor in China, Kidsland has over 18 years of industry experience. The Group owns the most comprehensive online and offline sales network in China. Currently, its self-operated offline retail system includes Kidsland and Babyland stores, LEGO Certified Stores, and the FAO Schwarz flagship store. With concepts of and experience in brand building, value appreciation and maintenance, outstanding marketing capabilities, and flexible use of online and offline marketing strategies, Kidsland has built a leading toy and infant products distribution franchise in China. 

Media Enquiry:
Strategic Financial Relations Limited
Vicky Lee Tel: (852) 2864 4834 Email: vicky.lee@sprg.com.hk
Antonio Yu Tel: (852) 2114 4319 Email: antonio.yu@sprg.com.hk
Queenie Lee Tel: (852) 2114 2881 Email: queenie.lee@sprg.com.hk
Fax: (852) 2527 1196

China Comservice Announces 2019 Interim Results

China Communications Services Corporation Limited (“China Comservice” or the “Company”), and its subsidiaries (the “Group”) (HKSE code: 552), today announced its unaudited interim results for the six months ended 30 June 2019. 

HIGHLIGHTS:

– Overall results of the Group maintained steady growth against the backdrop of slower growth and even decrease in revenue in the domestic telecommunications industry. Total revenues were RMB56,049 million, up by 10.4%; profit attributable to equity shareholders of the Company was RMB1,712 million, up by 7.3%, with net profit margin remained relatively stable at 3.1%
– The Group’s growth momentum transformed noticeably, with the domestic non-telecom operator market and OPEX-driven business of the domestic telecommunications operator market being the key growth drivers
– The Group further upgraded its software service capabilities and enhanced its brand influence, with revenue growth of the software related services surpassed industry level
– The Group’s new positioning of “New Generation Integrated Smart Service Provider” will steer the Company to capture the new demands arising from the new era of digital transformation

OPERATING PERFORMANCE

In the first half of 2019, the Group’s total revenues amounted to RMB56,049 million, representing a year-on-year increase of 10.4%, among which, revenue from the Core Businesses recorded a year-on-year increase of 11.8%, sustaining a favourable growth momentum. Cost of revenues was RMB49,749 million, representing a year-on-year increase of 11.5%. Gross profit was RMB6,300 million, representing a year-on-year increase of 2.0%. Due to factors including the further progression on the adjustment of the domestic economic structure, development of the domestic non-telecom operator market still being in the preliminary introductory phase and the rigidity of labour costs, the Group’s gross profit margin was 11.2%, representing a year-on-year decrease of 1.0 percentage point. While increasing the investment in research and development, the Group enhanced its synergistic operation and continued to optimize resource allocation, and its selling, general and administrative expenses amounted to RMB4,985 million, accounting for 8.9% of total revenues and representing a year-on-year decrease of 0.3 percentage point. Profit attributable to equity shareholders of the Company was RMB1,712 million, representing a year-on-year increase of 7.3%, with net profit margin of 3.1%, which was largely the same as the same period of last year. Basic earnings per share amounted to RMB0.247, representing a year-on-year increase of 7.3%. Free cash flow was RMB-425 million, mainly affected by the change in pace of collection and payment in the first half of the year.

Mr. Zhang Zhiyong, Chairman of China Comservice commented: “In the first half of 2019, against the backdrop of slower growth and even decrease in revenue in the domestic telecommunications industry, the Group adhered to the overall roadmap of ‘value-driven, seeking steady yet progressive growth and high-quality development’ and captured the opportunities from ‘Cyberpower’, ‘Digital China’ and ‘Smart Society’, enabling the Group to achieve favourable operating results and noticeable transformation of growth momentum for its development. In particular, domestic non-telecom operator market, being the largest customer and revenue contributor of the Group for the first time, steered the Group’s development. The sound development in the business process outsourcing (“BPO”) services and the rapid growth in the applications, content and other (“ACO”) services in the domestic telecommunications operator market supported the stable development in such market, and the fundamentals of the Group’s operation remained solid. The favourable new growth momentum and robust operating fundamentals endowed new capabilities and vitalities to the Group, which effectively defend us against the pressure and risks arising from the economic restructuring and change in industrial cycle, boost the endogenous power for enterprise development, thus laying a solid foundation for the Group to keep striding towards high-quality development.”

MARKET EXPANSION

In the first half of 2019, the Group expedited the deployment in the domestic non-telecom operator market and effectively leveraged on its smart products and integrated solutions to realize rapid revenue growth in such market. Meanwhile, the Group accelerated its integration into the domestic telecommunications operators’ ecosystems and realized a stable development in such market attributable to the OPEX-driven business, as well as smart application businesses.

Domestic Non-Telecom Operator Market

The Group’s revenue from the domestic non-telecom operator market amounted to RMB21,065 million, representing a rapid year-on-year increase of 28.5% and accounting for 37.6% of total revenues, making it the largest customer of the Group for the first time and contributing 88.8% of the total incremental revenues for the first half of the year. Revenue from the Core Businesses in the domestic non-telecom operator market increased at an even faster pace, of which the year-on-year growth rate was 33.3%, accounting for 91.5% of the revenue from such market which represented a year-on-year increase of 3.4 percentage points. Focusing on the key sectors including government, transportation, electricity, parks and intelligent building, the Group increased its investment in research and development, intensified its efforts in cultivating smart products, and continuously penetrated into industry opportunities by means of capabilities accumulation and capabilities enabling through its Ecosystem Alliances on Smart City, Internet of Things (“IoT”), Cloud Computing, etc., for the purpose of providing customers with integrated comprehensive solutions that support their informatization construction and create value for customer development. While promoting the transformation of its businesses, the Group also realized fast and sound development in such market.

Domestic Telecommunications Operator Market

In the domestic telecommunications operator market, the Group persisted in the development strategy of “CAPEX and OPEX-driven” businesses as dual growth drivers, and not only captured the demand for network construction, but also expanded operation and maintenance support businesses vigorously. Besides, the Group combined traditional services with smart businesses to support the transformation and upgrade of domestic telecommunications operator customers and the development of new ICT businesses. Upon the issuance of 5G licenses by MIIT in June 2019, domestic telecommunications operators further accelerated their deployment of 5G and adjusted their investment structure. However, operators’ investment in 5G network has yet to come in scale. The revenue from such market maintained stable and recorded RMB33,645 million, representing a year-on-year increase of 2.1% and accounting for 60.0% of total revenues. Among that, revenue from China Telecom was RMB18,351 million, remained relatively at the same level as compared with the same period of last year and accounted for 32.7% of total revenues. Revenue from domestic telecommunications operator customers other than China Telecom was RMB15,294 million, representing a year-on-year increase of 4.9% and accounting for 27.3% of total revenues.

Overseas Market

Affected by the progress of new overseas projects’ commencement, revenue from overseas market of the Group amounted to RMB1,339 million, representing a year-on-year decrease of 7.4% and accounting for 2.4% of total revenues. The Group attaches great importance to overseas business development. By focusing on the opportunities from the “Belt and Road”, the Group captured the demand for overseas network infrastructures and digitalization construction. By capitalizing on the cooperation opportunities with domestic telecommunications operators and “Go Abroad” Chinese enterprises, as well as the valuable experiences accumulated in the domestic non-telecom operator market, the Group continued to expand and increase the reserve of turnkey projects.

BUSINESS DEVELOPMENT

Telecommunications Infrastructure (“TIS”) Services 

In the first half of 2019, all the three businesses of the Group obtained favourable development. Revenue from telecommunications infrastructure (“TIS”) services amounted to RMB30,801 million, representing a year-on-year increase of 8.7% and accounting for 55.0% of total revenues. The Group continued to seize the opportunities arising from the construction of Digital Economy and Smart Society in China, and penetrated into the full life cycle demands of domestic non-telecom operator customers by capitalizing on the “Consultant + Staff” business model to provide them integrated informatization construction services including consultation, planning and construction, thereby driving the TIS revenue growth in such market. Revenue from TIS services in domestic non-telecom operator market amounted to RMB10,665 million, representing a year-on-year rapid increase of 46.6%, being the largest driving force of revenue growth for TIS services. In the first half of 2019, domestic telecommunications operators deployed 5G network construction while adjusting investment structure, and TIS revenue from domestic telecommunications operator market recorded a year-on-year decrease of 4.1% and amounted to RMB19,200 million.

Business Process Outsourcing (“BPO”) Services

In the first half of 2019, revenue from BPO services amounted to RMB18,128 million, representing a year-on-year increase of 9.2% and accounting for 32.3% of total revenues. Among that, Core BPO services (i.e. BPO services excluding the products distribution business) progressed well and revenue from which recorded a year-on-year increase of 14.1%. The Group further enhanced the synergistic operation of general facilities management and supply chain businesses, both of which recorded a year-on-year increase of over 15%. Revenue from network maintenance business also increased by 11.3% year-on-year. Revenue from the products distribution business under continuous control by the Group recorded a year-on-year decrease of 16.0%, with its contribution to total revenues decreased by 1.2 percentage points to 4.1% as compared with the same period of last year.

Applications, Content and Other (“ACO”) Services

In the first half of 2019, revenue from ACO services amounted to RMB7,120 million, representing a year-on-year increase of 21.6% and maintaining a good growth trend. The revenue contribution from ACO services to total revenues consistently increased in the past few years and reached 12.7% in the first half of 2019, which was 1.2 percentage points higher year-on- year. The Group adapted to the trend of Digital Economy, focused on the demand for informatization and intelligentization construction of industry customers and provided increasingly enriched and diversified smart products and services to them. In addition, the Group’s software service capabilities were enhanced continuously, driving the revenue of ACO Major businesses to increase by 25.8% year-on-year, which surpassed the growth rate of national software business revenue .

DEEPENING TRANSFORMATION

In the first half of 2019, facing the new trend of Digital Economy era, the Group put forward the new positioning of “New Generation Integrated Smart Service Provider” and continuously enhanced internal capabilities and strengthened development momentum. 

The Group continued to promote the construction of foundation platform capabilities, increased the investment in research and development of “CCSYUN” (our cloud service) and IoT platforms and enhanced the promotion and application thereof. By utilizing its industrial alliances and group-level research institutes, the Group improved the construction of internal and external ecosystems, and converged internal and external resources to enhance capability to respond and deploy new markets and new technologies in foresight. By fully promoting the “Consultant + Staff” business model, which is led by consulting and planning with smart products embedded, the Group enhanced the capabilities of promoting the sizable project expansion. The Group promoted the integration of financial solutions with industrial development, as well as strengthening business incubation and exploring new business model for such integration through Comservice Capital Holding Company Limited.

In addition, the Group’s branding and industry influence was effectively enhanced. In the first half of 2019, the Group was ranked 5th in the “100 Most Competitive Software & IT Service Enterprises 2019”, right after the leading enterprises in the field. By participating in various national expositions including China International Big Data Industry Expo, the Group’s philosophy of cooperation and co-development was delivered to society and customers, and gained wide recognition.

PROSPECTS

Mr. Zhang Zhiyong, Chairman of China Comservice said: “Currently, the macro-economy is growing steadily and progressively, the industry structural upgrade is accelerating, contribution from domestic demand is rising and the service sector commands vast market potential. Digital Economy becomes a new impetus for economic development with 5G, IoT, Cloud Computing, Artificial Intelligence as well as Big Data entering into the substantive development stage. China’s expedition on the deployment for synergistic development of three major economic zones and Yangtze River Economic Belt, further development along the ‘Belt and Road’ and the vigorous demand for construction of a Smart Society in China and overseas, will all create new business opportunities. In view of the issuance of 5G licenses, the Company believes that it will not only bring traditional business opportunities to the Group including network infrastructure construction as well as operation and maintenance, but also give rise to new demands arising from digital transformation of industries, Industrial Internet and more maintenance, operation and support services in relation to IoT. The emergence of the above new demands, coupled with the Group’s diversified smart solutions established and valuable practical experiences accumulated in various industries in recent years, is expected to bring sustainable and significant strategic opportunities for the Group in the future. 

Focusing on the main development tracks, the Group will continue to upgrade its ‘cross-platform, cross-connection, cross-application, cross-region and cross-supplier’ core service capabilities, as well as strengthening its effort on innovation and transformation with a view to promoting high-quality development.

The domestic non-telecom operator market is an important driver for the Group’s business growth in the future. In this market, by capturing the opportunities of ‘Cyberpower’, ‘Digital China’ and ‘Smart Society’, the Group will further penetrate into key sectors such as government, transportation and electricity, and accelerate the deployment of Industrial Internet. The Group will focus on the needs of customers, increase investment in research and development, improve the internal and external ecosystems, and build the core capabilities and brand influence as ‘New Generation Integrated Smart Service Provider’ with a view to promoting fast, sustainable and healthy development of such market.

The domestic telecommunications operator market is the fundamentals of the business development of the Group. By capturing the opportunities arising from 5G network construction, network information security as well as cloud-network integration, and integrating into the domestic operators’ business ecosystems, the Group will deeply penetrate into CAPEX business, broaden OPEX business, and provide high-quality, standardized services to customers and support their transformation and upgrade, with a view to maintaining the Group’s stable fundamentals.

In overseas market, the Group will capture the opportunities from the ‘Belt and Road’, focus on ‘EPC+F+I+O+S’ model and strive to develop sizable turnkey projects. In response to the strong overseas demand for informatization, the Group will promote its smart products and services in overseas market to explore new drivers of growth. Meanwhile, the Group will strengthen its collaboration with domestic telecommunications operator customers, ‘Go Abroad’ Chinese enterprises, and local partners to expand overseas market and seek new breakthroughs for the development of overseas business.

It is now a crucial period for economic transformation and upgrade as well as the industrial reform, and the new era signifies new opportunities to the Group. The Group, as a ‘New Generation Integrated Smart Service Provider’, will leverage on State-owned Enterprise Reform to accelerate its pace on reform and commence a new round of transformation. The Group will adhere to the principle of value-driven, seeking steady yet progressive growth while striving towards high-quality development, and reward our shareholders and customers with better results and performance.”

About China Comservice

China Comservice is a New Generation Integrated Smart Service Provider that provides integrated comprehensive solutions in the informatization and digitalization sector including telecommunications infrastructure services spanning from design, construction to project supervision and management; business process outsourcing services spanning from management of infrastructure for information technologies (network management), general facilities management, supply chain and products distribution; applications, content and other services spanning from system integration, software development and system support to value-added service, etc. The Company’s major customers include domestic telecommunications operators (including the three domestic telecommunications operators and China Tower Corporation Limited), domestic non-telecom operator customers including government agencies, industrial customers and small and medium-sized enterprises, as well as overseas customers. Its controlling shareholder is China Telecommunications Corporation, and besides, China Mobile Communications Group Co., Ltd., China United Network Communications Group Company Limited and China National Postal and Telecommunications Appliances Co., Ltd. are also shareholders of the Company.

In 2019, the Company was honored the “Best CEO” again in the “9th Asian Excellence Recognition Awards” by Corporate Governance Asia, an authoritative journal on corporate governance in Asia, as well as “Best Investor Relations”. The Company was also ranked 86th in the “2019 FORTUNE China 500” released by FORTUNE China. In addition, the Company was ranked 5th in “100 Most Competitive Software & IT Service Enterprises 2019”, up by one place compared to last year’s ranking.

For further information, please browse the Company’s website at: www.chinaccs.com.hk

For press enquiries:

China Communications Services Corporation Limited
Investor Relations Department
Mr. Terence Chung
Ms. Patricia Leung
Tel: (852) 3699 0000
Fax: (852) 3699 0120
Email: ir@chinaccs.com.hk

Forward-looking statements

This press release contains forward-looking statements and information relating to us and our operations and prospects that are based on current beliefs and assumptions as well as information currently available to us. The words “anticipate”, “believe”, “estimate”, “expect”, “plans”, “prospects”, “going forward” and similar expressions, as they relate to us or our business, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and various assumptions. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may diverge significantly from the forward-looking statement. We do not intend to update these forward-looking statements other than our on-going disclosure obligations pursuant to the Hong Kong Listing Rules or other requirements of the Hong Kong Stock Exchange. 

Huashang Vocational College’s Students Enrollment from the 2019 College Entrance Examination (Summer) Ranked First of Top Six Private Vocational Colleges

Edvantage Group Holdings Limited (“Edvantage Group” or the “Company”, stock code: 0382.HK), the largest private higher education group in the Greater Bay Area in terms of total student enrollment of business majors for the 2017/2018 school year and an early mover in pursuing international expansion, is pleased to announce today that, Guangzhou Huashang Vocational College (“Huashang Vocational College” or the “Vocational College”) , presented a sound results in the 2019 Guangdong Province Higher Vocational (Junior College) batch admission. Vocational College’s admission score line rose while the enrollment expanded, and the student enrollment recorded a substantial increase as well.

“Campus Sharing” and “Junior college to bachelor’s degree transfer programmes” creating synergies, admission score line rose while the enrollment expanded, students enrolled went up substantially by 53% YOY

Recently, the admission lines of 2019 Guangdong Province’s Higher Vocational (Junior College) batch unveiled in succession. This year, the enrollment quota for higher vocational colleges expanded by 1 million in China and expanded by 80,000 in Guangdong Province, the enrollment score line of the Huashang Vocational College witnessed a rise. The minimum score line for liberal-and-arts majored students was 372, exceeding the provincial line by 202 points and up by 40 points compared with last year. The minimum score line for science majored students was 272 points, 112 points higher than the provincial line and up by 67 points as compared with last year. In 2019, the Huashang Vocational College admitted a total of 5,489 students, presenting a significant increase of 53% YOY.

The Company believes that the Vocational College’s continuous rising in the score line and the number of admission were mainly benefited from the synergy effect between its “Campus Sharing” and “Junior college to bachelor’s degree transfer programmes”. The Huashang Vocational College offers “Junior college to bachelor’s degree transfer programmes” courses to enable junior college students to continue their studies as a third-year undergraduate at the Huashang College Guangdong University of Finance and Economics (“Huashang College”), a college to offer undergraduate education operated by the Edvantage Group. The undergraduate degree would be awarded by the Huashang College after 2 years of courses. In addition, Huashang Vocational College and the Huashang College share a campus, making it easier for students to “transfer” to bachelor’s degree. In recent years, both the numbers of students transferred to bachelor’s degree and students transferred to Huashang College have witnessed year-by-year increases. In 2019, there were 666 students applied for “Junior college to bachelor’s degree transfer programmes”, and 305 students were admitted. The number of students admitted to Huashang College was 254, accounting for 83.55% of the number of students admitted, as a vivid testimony of the advantages of “Junior college to bachelor’s degree transfer programmes”.

Huashang Vocational College’s 2019 summer students enrollment ranked first of top six private higher education institutions

In addition, during the enrollment for students passing the 2019 College Entrance Examination (Summer), only 6 institutions among all the private vocational colleges in Guangdong Province have met their enrollment quota in the first round of admission, among which the Huashang Vocational College had the most students admitted.

2019 Summer Vocational College Entrance First Application Statistics of Guangdong Province with Full Admission in Both Liberal Arts and Sciences.
No. Colleges Application
1. Guangzhou Huashang Vocational College 1878
2. Vocational College A 1395
3. Vocational College B 794
4. Vocational College C 605
5. Vocational College D 534
6. Vocational College E 427
(Source: Southern Metropolis Daily, 2019-08-23 17:57)

Guangzhou Huashang Vocational College is located in Zengcheng District, Guangzhou, Guangdong Province, founded in 2009. Huashang Vocational College is a full-time, higher vocational college approved by the Guangdong Province Government and recognised by Ministry of Education , owing 13 faculties & departments and offering 34 majors including business, economics and management, among others. Huashang Vocational College designs its curriculum, career training and career advising programmes by focusing on profession-oriented, practical learning and training content with a distinct emphasis on specific industry verticals. For the 2015/2016, 2016/2017 and 2017/2018 school years, the Initial Employment Rate of Huashang College was 98.3%, 97.4%, and 96.2%, respectively.

Mr. Liu Yung Chau, Executive Director and chairman of the Board of Edvantage Group Holdings Limited, said: “Since its establishment, Huashang Vocational College and Huashang College have shared the same campus, which has enabled the two schools to exert a strong integration advantage and synergy effect, providing students with more diverse educational opportunities and experiences, and bringing a well-recognized brand reputation of Huashang in the education industry. This year marks the 10th anniversary since the establishment of the Huashang Vocational College, and the recruitment and admission work this year has presented itself a beautiful gift for the anniversary. This is a high recognition on our school and our development strategy. As the leading provider of private business higher education in the Greater Bay Area, we will continue the work to cultivate talents for the society, help students develop promising career path when they graduate, grasp the employment opportunities emerging in the Greater Bay District, and bring satisfactory returns to investors.”

About Edvantage Group Holdings Limited
Edvantage Group Holdings Limited (“Edvantage Group” or the “Company”, stock code: 382.HK) is the largest private higher education group in the Greater Bay Area (in terms of total student enrolment of business majors for the 2017/2018 school year), and an early mover in education sector in pursuing international expansion. With a sizeable student base, the Company operates with economies of scale. The Edvantage Group currently operates two private higher education institutions located in Guangdong Province, China, namely Huashang College and Huashang Vocational College. Huashang College and Huashang Vocational College focus their programme offerings on business programmes, such as accounting, finance, economics and business English, and strive to help students to achieve employment prospects when they graduate, and to benefit from the availability of employment opportunities in the Greater Bay Area. The Company also operates a private vocational education institution named Global Business College of Australia (“GBCA”) in Australia, offering vocational education courses and non-formal short-term courses aiming to provide students with competitive advantages and global prospective. GBCA is a registered training organization authorized by ASQA. The Company believes that GBCA represents a replicable example for its future international expansion, and the Company is exploring international opportunities in the United Kingdom and Singapore. 

Steady Development in Kingworld 25th Anniversary and Deepening Management New Journey in Pursuit of Quality and Healthy Living

Kingworld Medicines Group Limited (“Kingworld Medicines” or the “Group”, stock code: 01110.HK), a leading global well-known omni-channel enterprise offering a complete supply chain spanning the greater health products and services industry, has announced its unaudited interim results for the six months ended 30 June 2019 (the “Period”).

During the Period, the Group has been continuously reviewing the complex international and domestic economic situation, committing to providing consumers with quality health products and actively developing channels in lower-tier cities to explore and fill market gaps, and increase market coverage of its products. During the Period, given the current economic challenges and the slowdown in the Chinese economy, consumer market sentiment has turned conservative, and revenue decreased by 6.7% to approximately RMB 519,042,000 in the first half of the year. Profit attributable to owners of the Company increased by 19.4% to approximately RMB 32,885,000 and basic earnings per share increased by 19.2% to approximately RMB 5.28 cents. Revenue from the pharmaceutical products segment amounted to approximately RMB 360,357,000, accounting for 69.5% of the Group’s total revenue. Revenue from the healthcare products segment was approximately RMB 73,906,000, accounting for 14.2% of the Group’s total revenue. Revenue from the medical devices segment amounted to approximately RMB 84,779,000, accounting for 16.3% of the Group’s total revenue.

Mr. Zhao Li Sheng, Chairman of the Board and Executive Director of Kingworld Medicines, said, “Looking at the half year, the global economy has been slowing down. The domestic economy faced downward pressure, and the fundamentals of the Chinese economy will weaken and the consumer market will turn conservative. A wide range of factors contributing to economic instability pose challenges to the retail industry. While implementing the “deep-rooted, optimized and refined” operation and sales management strategy in the first half of 2019, the Group implemented a series of adjustments to the structure and appointment of personnel within each sales region. The Group is focusing on extending the reach of its channels to lower-tier markets, enhancing market coverage of products and strengthening the execution capability of each business segment. At the same time, the Group is continuously integrating the online and offline channels, via using the SMART system and scientific Big Data analysis to ascertain the needs of target consumers, explore niche markets and discover new markets, in order to formulate a more precise and profitable marketing strategy.”

During the Period, the Group pushed ahead with a comprehensive market expansion and marketing campaign for its star product, Taiko Seirogan. It also stepped up channel enhancement activities in order to strengthen ties with its cooperative partners, as well as to boost its market coverage and sales through product distribution activities. Moreover, the Group placed large billboard advertisements in high-traffic areas as well as participated in charity marathon runs to enhance the exposure of its brand and products. As for e-commerce, the Group boosted its engagement in promotional events with cooperative companies and various online merchandising platforms, including marketing activities with JD.com and liangxinyao.com in order to facilitate integration of online and offline channels. During the Period, Taiko Seirogan recorded to approximately RMB 64,939,000 from sales, increased 56.3% as compared to the same period last year.

The Group continued to optimize the structure of distribution channels of the Nin Jiom Product Series, and expand that market to lower-tier cities, enhanced terminal coverage for the products and strengthening the cooperation with regional chains, as well as with regional pharmacy chains so that more customers can experience and appreciate the products. Through a series of large-scale comprehensive promotional activities and the new media branding promotion campaign, the Group cultivates new young consumer groups, consolidated the loyalty of old customers and refurbishes the product into a contemporary brand.

Another well-known brand of Kingworld Medicines, the Culturelle probiotics product series from the United States, is dominant in the Hong Kong and Macao market. During the Period, the Group has focused on the sales coverage and distribution channels coverage in those markets, currently covering Mannings, Watsons, SaSa, Colourmix, CR Care, HealthPlus, Eugene Baby, Yue Wah Chinese Products, AEON Stores, HKTV Mall and a number of pharmacy chain stores and individual pharmacies. There are around 1,600 retail outlets in the distribution channels across Hong Kong and Macao. 

In addition, the Group continued to promote the Lifeline Care maternal and infant fish oil nutrient product series from Norway, which is another star healthcare product brand developed in Mainland China, Hong Kong and Macao markets. Through a brand communication and sales strategy, its brand and products have earned positive word-of-mouth among consumers. During the Period, the Group has established cooperation with large scale cross-border e-commerce platforms and maternal and infant public in order to maintain close cooperation in brand exposure and sales. The Group has captured the trend towards promotion platforms by cooperating with KOLs to initiate discussions on many hot topics in different promotion platforms like Xiaohongshu and Kaola.com. Through recommendation from professional doctors, maternal and infant experts and celebrities, consumers’ trust in the brand has thus been greatly enhanced. As a result of the diversified marketing activities, Lifeline Care maternal and infant fish oil nutrient product series has gained a well-deserved reputation for both its brand and products, which resulted in a significant increase in sales volume. The sales revenue grew significantly by 66.4% as compared to the same period last year.

Kingworld Medicines has formulated online and offline promotion activities respectively based on the characteristics and target consumers of each of its medicated oil products for external use. For the Mentholatum series, the Group continued strengthening its close cooperation with online pharma retail while conducting KOL advertorials through TikTok and Xiaohongshu. Marketing activities were launched for Hoe Hin White Flower Embrocation during shopping festivals on e-commerce platforms to improve terminal sales and brand influence. The Group continued to provide product trial packs of Kingworld Imada Red Flower Oil and oil massage services to residents in key communities, also provided medicinal oil massage for residents and mountaineering friends in various communities, aiming to enhance consumers’ recognition and confidence in its products through those services. Kingworld Medicines continued to support a variety of sports events, such as Shenzhen Guangming Town International Half Marathon, Shenzhen’s Mafang 100km Hike, Shanxi Youyu Marathon and Shenzhen Longgang City Orienteering so as to promote health and fitness. During the Period, the sales revenue of external use medicated oil product series grew by 36.8% as compared to the same period last year.

Looking ahead, as market demand and the market competitive landscape changes, the Group will fine-tune the product mix of each product segment and plans to optimize the existing product portfolio. This exercise will lead to some mainstream products managing relatively faster or steady growth, and some products continuing to deliver higher profits, with a small number of non-mainstream products growing more slowly. The Group is nurturing new products with market potential and adjusting the specifications and packaging of some products to achieve product upgrade or renewal. The Group will also push for deeper channel penetration as well as enlarged product coverage and strengthen product reach in those cities and rural villages to seize those untapped markets, thereby increasing product penetration and enhancing profits. In addition, the Group plans to launch collaborative projects in probiotics with the Hong Kong University of Science and Technology (“HKUST”) in the future. Marrying HKUST’s research and development capability with the Group’s analysis and judgment regarding future market trends, the collaboration targets to develop Chinese medicines with probiotics added for relieving dampness in the body. Such cooperation will not only enable the Group to expand variety in its product line, but also reach more niche probiotics product markets and cater for the more diverse demands of a broader spectrum of consumers.

Mr. Zhao commented, “In 2019, Kingworld Medicines celebrates its 25th anniversary. In the past quarter of a century, Kingworld has succeeded in grasping development opportunities presented by the country’s reform policies, starting its journey of pursuing the corporate mission of “Serving the community and healing the soul” and meeting peoples’ demand for a quality and healthy life. The Group strives to turn Kingworld Medicines into a renowned distributor brand for well-known premium brands around the world, providing a wider variety providing premium greater health products to consumers and building a network of care for promoting citizens’ health. Facing the more complex volatile macro-environment, at home and abroad, as well as the shifts in the business environment as well as in the market, consumption patterns and technology, Kingworld will adapt to the trend of integration of online and offline channels, grasping and applying the popular marketing tactic of improving the customer experience, as well as striving to perfect the overall marketing strategy and focus for each product. At the same time, Kingworld will also seize the opportunity presented by the country’s vigorous development of favourable policies towards Chinese medicine to corporate with long-established Chinese medicine manufacturers and enrich its product line. We can also grasp the opportunity to participate in the investment in upstream manufacturers, at the same time promoting the penetration of existing products into third- and fourth-tier cities, and increase our sales volume.”

Tontine Wines’ Revenue Continued to Increase to RMB165 Million in The First Half of 2019

China Tontine Wines Group Limited (“Tontine Wines” or the “Group”, stock code: 0389), one of the leading sweet wine producers in China, announced a year-on-year increase of approximately 2.7 per cent in its unaudited total revenue to RMB164,854,000 for the six months ended 30 June 2019 (“Period”). However, due to a relatively significant increase in cost of sales and adjustment of product mix to meet market demands, the Group’s overall gross profit decreased by 30.5 per cent to RMB42,018,000 during the Period. As a result, the Group’s profit and total comprehensive income for the period attributable to owners of the Company decreased to RMB6,693,000 from RMB18,211,000 of the same period of 2018.

“In the first half of 2019, domestic wines faced continued competition from imported wines, while the growth of earnings of domestic wine enterprises was confronted with challenges as a result of the slowdown in economic growth. To ride out the challenging market conditions, the Group made strategic adjustments to its product mix to solidify the market share of its major products while penetrating in sub-segment markets to satisfy consumer’s diverse needs. The Group also turned to make wider use of new media for promotion and marketing to extend its reach to the new generation of consumers,” said Mr Wang Guangyuan, the Chairman of Tontine Wines.

During the Period, sweet wine and dry wine remained the Group’s major products, together accounting for 86.5 per cent of the Group’s total revenue. With respect to sub-segment market penetration, the Group focused on the promotion of ice wines, tapping on its competitive edge in having access to high quality mountain grapes cultivated in the Tonghua area. To enhance consumer’s acceptance of ice wines, the Group conducted various marketing strategies, including reduction of initial selling prices, which resulted in a significant increase in the sales volume of ice wines.

During the Period, the Group launched three new products, increasing its product portfolio to 152 types of wine products. Of the new products, one was a new sweet wine customised to go with hot pot, which received positive feedback from consumers who are keen on Sichuan spicy hot pot.

During the Period, the Group’s revenue from sweet wines amounted to RMB84,880,000, accounting for 51.5 per cent of its total revenue, with a gross profit margin of 21.7 per cent. Sales revenue from dry wines during the Period amounted to RMB57,626,000, accounting for 35.0 per cent of the Group’s total revenue, with a gross profit margin of 35.9 per cent. The Group’s sales revenue from brandy amounted to RMB2,599,000, accounting for 1.5 per cent of the total revenue. Other products of the Group (including ice wines and white wines) recorded a sales revenue of RMB19,749,000, representing a significant year-on-year increase of 412.0 per cent. The percentage of other products’ revenue contribution increased to 12.0 per cent from 2.4 per cent for the corresponding period of 2018. Ice wines and white wines have become the Group’s new revenue growth engine and helped further consolidate the Group’s brand recognition and influence in the middle and high-end markets.

In terms of regional revenue, Eastern Region remained the Group’s largest market during the Period, contributing 29.4 per cent of total revenue, followed by North-East Region (19.6 per cent of total), South-West Region (17.5 per cent of total), South-Central Region (17.0 per cent of total) and Northern Region (16.5 per cent of total), .

During the Period, the Group’s products were sold through 105 distributors located in 20 provinces, 3 autonomous regions and 4 municipalities in China. During the Period, the Group continued to optimize its sales network, strengthen the standardized management of distributors and strictly control its sales and distribution expenses.

The Group is committed to producing high quality wine. In May 2019, the Group was successfully selected as a “Member of China Food Safety Initiative Convention”. In addition, the Group’s “Tontine Red Ice Wine 2016” won a bronze medal for the 13th G100 International Wine & Spirits Competition, marking the Group as the sole awarded enterprise in Tonghua.

Looking into the future, Mr Wang said: “In the second half of 2019, we will follow the trend of consumption change in the domestic wine market in a pragmatic and prudent manner, to further optimize our product mix. On the one hand, we will actively explore the segmental markets to enrich our product portfolio by developing more personalized products with regional features and corporate-oriented customized products. On the other hand, we will capture the opportunities arising from the local policy on encouraging the ice wine industry in Tonghua to further focus on the promotion of ice wine products so as to expand the revenue source of the Group. We will also focus on the promotion of self-developed distilled liquor “Tongtian Yaaru Wine”, with the aim of developing it into a liquor brand with specific Tongtian characteristics. At the same time, we will fully utilize the channel advantage of distributors’ network and e-commerce platforms. By marketing through new media, we will increase the market recognition of Tongtian brand and its reputation, which will help further consolidate our customer base.”

About China Tontine Wines Group Limited

China Tontine Wines Group Limited is one of the leading sweet wine producers in China. Unique taste, premium quality and top-notch operation earn the Group numerous awards. For instance, “Tontine Red Wine 2016” won a bronze medal for the 13th G100 International Wine & Spirits Competition, marking the Group as the sole awarded enterprise in Tonghua. In addition, the Group was successfully selected as a “Member of China Food Safety Initiative Convention” in May 2019.

The exceptional quality of Tontine Wines’ products is much attributable to the Group’s commitment to quality assurance and its grape supply from Ji’an city in Jilin Province, one of the few regions in the world that can cultivate the unique mountain grapes. In recent years, the Group has been dedicated to diversifying its product portfolio to include low to mid-end wines to tap the mass market. The Group currently offers 152 types of wine products sold through 105 distributors in 20 provinces, 3 autonomous regions and 4 direct-controlled municipal cities in China. The Company’s shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited since November 2009.

Source : ACN Newswire

JCB Partners with EVO Payments to Enable JCB Card Acceptance for Merchants in the UK and Ireland

JCB International, Co., Ltd. (JCBI), the international operations subsidiary of JCB Co., today announces a partnership with EVO Payments to enable JCB payment acceptance across the UK and Ireland.

The enabling of the EVO merchant portfolio increases JCB acceptance at small-to-medium sized businesses, particularly merchants utilizing integrated payments, and grants JCB additional access to ISV providers who are especially active in the UK. The UK and Ireland partnership follows a successful trial in Poland in 2017 when JCB acceptance was enabled for existing EVO merchants.

The expansion of JCB’s relationship with EVO is a key milestone for JCB’s growth, as the company continues to drive acceptance coverage across Europe for its 130 million global cardmembers and expands its network of around 30 million merchant partners.

Mr. Tsuyoshi Notani, Managing Director, JCB International (Europe) Ltd., said: “JCB’s partnership with EVO Payments demonstrates our ongoing work to establish efficient acceptance across both the UK and Ireland and in Europe more widely. Our efforts to widen acceptance come about as JCB card membership grows in new countries from which more and more people are visiting Europe.”

Darren Wilson, President International, EVO Payments, Inc., said: “Our partnership with JCB will allow the 130 million JCB cardmembers to make payments at all EVO merchant sites across the UK and Ireland that are part of the JCB network. Expanding our card acceptance capabilities so that travellers from Asia can easily make card payments is an important enhancement to our merchant proposition.”

About JCB

JCB is a major global payment brand and a leading payment card issuer and acquirer in Japan. JCB launched its card business in Japan in 1961 and began expanding worldwide in 1981. As part of its international growth strategy, JCB has formed alliances with hundreds of leading banks and financial institutions globally to increase merchant coverage and cardmember base. As a comprehensive payment solution provider, JCB commits to provide responsive and high-quality service and products to all customers worldwide. For more information, please visit: www.global.jcb/en/ or www.jcbeurope.eu/

About EVO Payments, Inc.

EVO Payments, Inc. is a leading payment technology and services provider. EVO offers an array of innovative, reliable, and secure payment solutions to merchants ranging from small and mid-size enterprises to multinational companies and organizations across the globe. As a fully integrated merchant acquirer and payment processor in over 50 markets and 150 currencies worldwide, EVO provides competitive solutions that promote business growth, increase customer loyalty, and enhance data security in the markets it serves.

Contact
JCB International/Europe
Ashleigh Carter
Email: acarter@jcbeurope.eu
Phone: +44 020 7087 4754

Kumiko Kida
JCB Co., Ltd.
Corporate Communications
Tel: +81-3-5778-8353
Email: kumiko.kida@jcb.co.jp