Full Press Release Details
Concord Medical Reports Financial Results for
the First Half of 2024
BEIJING, September 27, 2024 /PRNewswire/
-- Concord Medical Services Holdings Limited ("Concord Medical" or the "Company") (NYSE: CCM), a healthcare provider
specialized in cancer treatment, research, education and prevention in China, today announced its unaudited consolidated financial results
for the six months ended June 30, 2024[1].
2024 First Half Highlights
net revenues were RMB218.8 million (US$30.1 million) in the first half of 2024, representing a 23.1% decrease from total net revenues
of RMB284.5 million in the same period last year. Total net revenues included the net revenues from the hospital business of RMB137.8
million (US$19.0 million) and the net revenues from the network business of RMB81.0 million (US$11.1 million).
loss was RMB41.6 million (US$5.7 million) in the first half of 2024, compared to the gross loss of RMB37.4 million in the first half of
2023. The gross loss margin was 19.0% for the first half of 2024, compared to 13.2% for the same period last year.
attributable to ordinary shareholders in the first half of 2024 was RMB172.3 million (US$23.7 million), compared to RMB91.0 million in
the same period last year.
and diluted loss per share for Class A and Class B ordinary shares in the first half of 2024 were both RMB1.31 (US$0.18), compared
to RMB0.69 in the same period last year.
net loss in the first half of 2024 was RMB328.7 million (US$45.2 million), compared to non-GAAP net loss of RMB210.3 million in the same
period last year. Non-GAAP basic and diluted loss per share for Class A and Class B ordinary shares in the first half of 2024
were both RMB1.31 (US$0.18), compared to RMB0.69 in the same period last year.
[1] This announcement contains translations of certain
RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations of
RMB into U.S. dollars are made at a rate of RMB7.2672 to US$1.00, the noon buying rate in New York City for cable transfers payable in
RMB, as certified for customs purposes by the Federal Reserve Bank of New York on June 28, 2024.
[2] Non-GAAP net loss and non-GAAP basic and diluted loss
per share for Class A and Class B ordinary shares are defined as their most directly comparable GAAP measures excluding the impact of
share-based compensation expenses.
EBITDA[3] (non-GAAP) was negative RMB148.0 million (US$20.4 million) in the first half of 2024, compared to negative RMB148.4
million in the same period last year.
Dr. Jianyu Yang, Chairman and Chief Executive
Officer of Concord Medical, commented, "In the past few years, Concord Medical has been actively building a solid foundation for
its business development, as well as looking to the future by profoundly enhancing its expertise in oncology care and strengthening the
competitiveness of its international diagnosis and treatment services. Concurrently, Concord Medical has been continually exploring the
untapped potential of its network business, striving for growth and expansion.
We are delighted to announce that, Guangzhou Concord
Cancer Center ("Guangzhou Hospital"), a PRC subsidiary of our Company offering comprehensive cancer care services, has obtained
the large medical equipment procurement license for its proton equipment, as announced by the National Health Commission of the PRC on
September 14, 2024. Proton therapy services stand as a pivotal segment within Concord Medical's hospital business, anticipated
to deliver a significant boost to our revenue base upon its successful implementation. This endeavor will concurrently elevate Guangzhou
Hospital's profile and reputation. Looking ahead, we maintain a positive outlook on the growth potential of this sector, expecting
continued development and expansion through 2025 and beyond."
2024 First Half Financial Results
Net revenues from the hospital business were RMB137.8
million (US$19.0 million) in the first half of 2024, representing a 13.2% decrease from net revenues of RMB158.7 million in the first
half of 2023, mainly because (1) we downsized certain of our hospital business with lower profit margin, and (2) as we concentrated
the resources in preparing our proton therapy business, the revenue from the medical institutions fluctuated in the short term.
Net revenues from the network business were RMB81.0
million (US$11.1 million), representing a 35.6% decrease from net revenues of RMB125.8 million in the first half of 2023, mainly because
of the decreased demand for medical equipment, software and the relevant management and technical support services by our customers in
current economic environment.
[3] Adjusted EBITDA is defined as
net income/(loss) plus interest expenses, net, income tax expenses, depreciation and amortization, share-based compensation expenses
and other adjustments. Other adjustments include foreign exchange loss, net, other income, net, gain on disposal of equity method
investment, gain on disposal of subsidiaries, change in fair value of derivative liability, changes in fair value of short-term
investments and gain on disposal of long-lived equipment.
Cost of revenues of the hospital business in the
first half of 2024 was RMB174.0 million (US$23.9 million), representing a 14.9% decrease from cost of revenues of RMB204.4 million in
the first half of 2023, mainly because of (1) our overall efforts to improve operation efficiency and reduce costs, especially for
staff costs, and (2) the decrease of consumables and maintenance cost, lease cost and staff cost along with the fluctuation in hospital
Cost of revenues of the network business was RMB86.4
million (US$11.9 million), representing a 26.4% decrease from RMB117.5 million in the first half of 2023, generally in line with the decrease
in the business scale and revenue generated from sales and installation of medical equipment and software, management and technical support
Gross Loss and Gross Loss Margin
Gross loss from the hospital business was RMB36.2
million (US$4.9 million) in the first half of 2024, compared to RMB45.7 million in the same period last year. The gross loss margin of
the hospital business for the first half of 2024 was 26.3%, compared to the gross loss margin of 28.8% for the same period last year.
The improvement in gross loss margin of the hospital business was primarily because of our overall efforts to improve operation efficiency
Gross loss from the network business was RMB5.4
million (US$0.8 million), compared to the gross profit of RMB8.3 million in the first half of 2023. The gross loss margin of the network
business for the first half of 2024 was 6.7%, relatively stable compared to the gross profit margin of 6.6% for the same period last year.
Selling expenses were RMB25.0 million (US$3.4
million) in the first half of 2024, compared to RMB26.4 million in the first half of 2023. Selling expenses as a percentage of net revenues
was 11.4% in the first half of 2024, compared to 9.3% in the first half of 2023.
General and administrative expenses were RMB131.2
million (US$18.1 million) in the first half of 2024, of which employee benefit expenses were RMB62.4 million (US$8.6 million). In the
same period of last year, general and administrative expenses were RMB150.2 million. The decrease was mainly attributable to the decrease
in staff cost and our overall efforts to improve operation efficiency. General and administrative expenses as a percentage of net revenues
was 59.9% in the first half of 2024, compared to 52.8% in the first half of 2023.
Capital Expenditures
Comparing to RMB46.5 million in the first half
of 2023, capital expenditures were RMB168.4 million (US$23.2 million) in the first half of 2024, mainly due to the increase in deposit
for non-current assets and construction fees for our hospital business.
As of June 30, 2024, accounts receivable
were RMB78.2 million (US$10.8 million), representing a 6.4% increase from accounts receivable of RMB73.5 million as of December 31,
2023. The average period of sales outstanding for accounts receivable (also known as days sales outstanding) was 171 days in the first
Bank Loans and Other Borrowings
As of June 30, 2024, the Company had bank
loans and other borrowings totaling RMB3.4 billion (US$463.6 million).
About Non-GAAP Financial Measures
To supplement the consolidated financial statements
presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Concord Medical uses certain
non-GAAP measures. The Company presents certain of its financial information that is adjusted from results based on GAAP to exclude the
impact of share-based compensation expenses, such as non-GAAP net loss and non-GAAP basic and diluted loss per share for Class A
and Class B ordinary shares. The Company believes excluding share-based compensation expenses from its GAAP financial measures is
useful for its management and investors to assess and analyze the Company's core operating results, as such expense is not directly
attributable to the underlying performance of the Company's business operations and do not impact its current cash earnings. Concord
Medical also believes these non-GAAP measures excluding share-based compensation expenses are important in helping investors to understand
the Company's current financial performance and future prospects and to compare business trends among different reporting periods
on a consistent basis. In addition, Concord Medical also presents the non-GAAP measure of adjusted EBITDA, which is defined in this announcement
as net loss plus interest expenses, net, income tax expenses, depreciation and amortization, share-based compensation expenses and other
adjustments. Other adjustments include foreign exchange loss, net, other income, net, gain on disposal of equity method investment, gain