Chairman's Statement
(extracted from Annual Report 2009)
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present our Annual Report for the financial year ended 31 March 2009.
Our Financial Performance
The economy in general
slowed significantly towards
the end of 2008 as the effects
of the global financial crisis
began to take its toll. Many
businesses were seriously
affected and many have yet
to fully see its impact on
their earnings.
In China Healthcare Limited
our vigilance in identifying
key markets, effective resource
utilisation and efforts in
improving our facilities and
services have stood the Group
in good stead in the past
financial year.
We increased our revenue
by 17% from S$18.6 million
in FY2008 to S$21.8 million
in FY2009. This growth was
generated from higher sales
revenue derived from the
operations of our West
Point Hospital and higher
bed occupancies across our
Medicare Centres & Nursing
Homes in both Singapore
and Malaysia. Concurrently,
we turned around a FY2008
pre-tax loss of S$0.26 million
with pre-tax profit of S$0.99
million for the year as a result
of better cost efficiencies
across the Group and also
better profits derived from
our Associate, Boxuan
Medical Equipment Pte Ltd
in Zhu Hai, China.
Group earnings per ordinary
share on a fully diluted basis
for the financial year ended
31 March 2009 was 0.25
cents as compared with a
loss per share of 0.28 cents
for the previous period.
Net asset value per ordinary
share based on our issued
share capital rose from 12.88
cents recorded in FY2008 to
13.22 cents in FY2009.
Our Group has achieved a
steady growth over the past
six years since its IPO in
2002, from a humble revenue
growth of 4% in FY2003
to the current 17% annual
growth for FY2009.
Key Corporate Development
During the year, we continued
to invest in Human Resources,
particularly in strengthening
our senior management
team, as well as upgrading of
facilities and equipment as
part of our long term growth
strategy to maintain our
leading edge in healthcare
services.
In August 2008, Mr Chua
Song Khim was appointed as
the Group's Chief Executive
Officer, following his 7 years
stint as the CEO of the
National University Hospital.
In January 2009, Associate
Professor Tay Eng Hseon,
an established and renowned
Gynae-Oncology Surgeon
and the Chairman Medical
Board of the KK Women's &
Children Hospital, joined us
as Group Medical Director.
The Group completed its
acquisition of an S$7.4
million, 51% equity interest
in Chengdu Tian Li Co., Ltd,
a company with a forty-year
exclusive right to develop and
operate the Chongzhou Jiguan
Mountain Scenic Park on Mt.
Jiguan Jiulonggou, China.
The investment will also allow
the Group to benefit from
the related tourism resources
and projects associated with
the park as well as earning
compensation rights from
the sale of park tickets and
land revenue.
Discussions were underway
to enter into a Memorandum
of Understanding (MOU)
with the China-Singapore
Suzhou Industrial Park
Land Co., Ltd, to jointly
develop a retirement
village within the Suzhou
Industrial Park. Apart from
bringing our ECON brand
expertise and know-how
to the construction of the
project, we will subsequently
manage the operations of the
facilities upon completion by
leveraging on our experience
in developing and managing
our ECON Medicare Centres &
Nursing Homes in Singapore
and Malaysia. The MOU
(which was officially signed
on 24 May 2009, in Suzhou)
also gives us the option to
purchase up to 30% equity
stakes in the project within
three years of its operation.
In Malaysia, our ECON
Medicare Centre (Kuala
Lumpur) continued to achieve
a consistent high occupancy,
reflecting our customers'
confidence in our quality of
care and services.
Looking ahead, the economy
both locally and regionally
are expected to forecast slow
growth as businesses come
to terms with the financial
crisis and its resultant fallout.
Bearing this in mind, we will
continue to strengthen
our current competencies
and build new ones as
we navigate to vertically
integrate our business up
the healthcare value chain to
better serve our customers.
The next few years will
continue to be a phase of
consolidation and growth for
the Group. We are planning
for the expansion of our
West Point Hospital, to be
transformed into a modern
and more comprehensive
hospital. We envision a new
200-bed facility by 2014
with a wide range of medical
specialist services and stateof-
the-art equipment serving
both acute and step-down
medical care needs, health
screenings and other related
healthcare services. With
West Point hospital as the
anchor, we will develop an
integrated healthcare network
in the region, leveraging on
our established Medicare
Centres & Nursing Homes in
Singapore and Malaysia.
Following the acquisition
of the 3,000 sq m land in
Taman Perling (Johore Bahru)
last year, the planning and
design work for the proposed
200-bed Medicare Centre had
begun in parallel pending
final approval from Johor
Bahru Authority. The project
is expected to be completed
within the next 2 years with
optimism of attracting
residents from both Malaysia
and Singapore.
Apart from this, the financial
crisis has prompted a
more realistic check on
our business' assumptions
and expectations with the
Sichuan earthquake in May
2008 and the continuing
instability of land within
the earthquake zone.
We are slowing down
our development of the
Chongzhou Jiguan Mountain
Scenic Park until the relative
soil foundation has stabilised.
This is timely for China,
Healthcare, as we focus on
other major development
projects in Suzhou (China),
Malaysia and Singapore.
In addition, we are also
streamlining our cost
structures to keep our
business lean and to better
manage our cash position.
Given the current market
situation, we will also
continue to be vigilant in our
growth plans and position
strategically to meet the
demands of the changing
business environment within
the region.
The Board proposes paying
a first and final tax exempt
(1 tier) dividend of $0.001
per share for the financial
year ended 31 March 2009.
This reflects our commitment
in rewarding our shareholders
for your support over the past
years. This proposed dividend
will be subject to approval at
our upcoming AGM.
Acknowledgements
Finally, on behalf of the
Board, I would like to
extend our gratitude
and appreciation to our
shareholders for your
continuing support.
On a personal note,
I would also like to take
the opportunity to thank
our Directors for their
expert counsel, and our
management and staff
for their dedication and
commitment.
We look forward to your
on-going support as we
work towards another year
of healthy growth for China
Healthcare Limited.
Ong Chu Poh
Group Executive Chairman