Champion REIT Announces 2020 Annual Results

HONG KONG, Feb 18, 2021 – (ACN Newswire) – Champion Real Estate Investment Trust (stock code: 2778), the owner of Three Garden Road and Langham Place, announces its financial results for year ended 31 December 2020.

Ms. Ada Wong, CEO of Champion REIT

Summary of financial results

FY 2020 FY 2019 Change
Total Rental Income (HK$ mil) 2,633 2,778 – 5.2%
Net Property Income (HK$ mil) 2,347 2,481 – 5.4%
Distributable Income (HK$ mil) 1,554 1,648 – 5.7%
Distribution per unit (HK$) 0.2500 0.2662 – 6.1%

31 Dec 2020 31 Dec 2019 Change
Gross Value of Portfolio (HK$ mil) 67,318 81,178 – 17.1%
Net Asset Value per unit (HK$) 8.61 11.04 – 22.0%
Gearing Ratio 23.0% 18.0% + 5.0pp

Overview
The unprecedented and protracted COVID-19 pandemic had put our business as well as that of our tenants in a precarious situation. Against the backdrop of a global economic downturn, Champion REIT recorded a decline in distributable income by 5.7% to HK$1,554 million and distribution per unit ("DPU") dropped 6.1% to HK$0.2500.

Three Garden Road
Three Garden Road maintained the rental income at the stable level of HK$1,518 million in 2020, (2019: HK$1,512 million) and achieved a mild positive rental reversion. Average passing rent increased to HK$110.4 per sq. ft. (based on lettable area) as at 31 December 2020. Occupancy of the property was 86.8% as at 31 December 2020.

Langham Place Office Tower
Despite the challenging business environment, total rental income of Langham Place Office Tower remained stable at HK$378 million in 2020 (2019: HK$375 million), and passing rent of the property slightly increased to HK$47.7 per sq. ft. (based on gross floor area) as at 31 December 2020. Occupancy of the property was 88.7% as at 31 December 2020.

Langham Place Mall
The operating environment was extremely challenging for the Hong Kong retail market in 2020. Given the significant drop in tenants sales, total rental income of the Langham Place Mall recorded a 17.3% decline to HK$738 million, mainly dragged by a significant decline in turnover rent. The average passing rent dropped to HK$179.3 per sq. ft. (based on lettable area) as at 31 December 2020. Amid the challenging environment, the mall remained fully occupied as at 31 December 2020.

Distribution
Distributable income of the Trust declined 5.7% to HK$1,554 million (2019: HK$1,648 million) and DPU dropped 6.1% to HK$0.2500 (2019: HK$0.2662). Based on the closing unit price of HK$4.53 recorded on 31 December 2020, the total DPU represented a distribution yield of 5.5%.

Asset Value
The appraised value of the Trust's property portfolio was HK$67.3 billion as at 31 December 2020, sliding 17.1% from HK$81.2 billion as at 31 December 2019.

Outlook
We remain cautious on the outlook of our business for 2021. Although the availability of COVID-19 vaccines gives hope for people's daily lives and economic activities to return to normal, the process is likely lengthy. The real estate industry could potentially be disrupted in the post-pandemic era because of behavioural changes, such as work-from-home policy. Issues on various fronts – namely social distancing measures, Sino-US trade under a new US president, pending resumption of global travel and local unemployment – will all have a bearing on the office rental and retail markets.

In the coming year, we will endeavour to maintain occupancy for all the properties in the portfolio. We will also continue to adopt flexible leasing strategies to retain existing tenants and attract new tenants. The overall operating environment of our business will remain very difficult in 2021, we will continue to work closely with tenants and stakeholders in collaboration for the sustainable development of the Trust. Furthermore, we will take a prudent approach in identifying diversification opportunities globally for external growth for the Trust.

About Champion REIT (Stock Code: 2778)
Champion Real Estate Investment Trust is a trust formed to own and invest in income producing office and retail properties. The Trust focuses on Grade-A commercial properties in prime locations. It currently offers investors direct exposure to 2.93 million sq. ft. of prime office and retail properties by way of two landmark properties, Three Garden Road and Langham Place, one on each side of the Victoria Harbour. Since 2015, the Trust has been included in the Constituent of Hang Seng Corporate Sustainability Benchmark Index of Hang Seng Indexes.
Website: www.championreit.com

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KYC-Chain to Provide Onboarding Software for HKVAX, a Prominent Virtual Assets Service Platform

HONG KONG, Feb 17, 2021 – (ACN Newswire) – HKVAX, the Hong Kong Virtual Asset Exchange Limited, has officially announced working with KYC-Chain to facilitate the on-boarding of customers to the exchange. With the support of its proprietary technology, KYC-Chain hopes to provide HKVAX and its clients with an outstanding and secure on-boarding experience.

KYC-Chain is enabled to provide live API integrations to government databases with real-time data updates every 24 hours, including the authentication of business information for 139 different countries, representing more than 160 million companies, and data checks from over 10,000 data source points.

"With the world becoming increasingly involved with digital finance, identification and safeguarding security have become all the more important. We are hence pleased to be working with KYC-Chain in making sure our platform not only runs smoothly, but also securely," said Sam Fok, HKVAX Co-founder & COO.

HKVAX is a virtual asset exchange that provides trading and support services for institutions looking to invest in virtual assets, and the financial technology sector. The Exchange, which was named to KPMG's "2020 China Leading Fintech 50", aims to bring financial institutions, professional investors, and alliance partners together to accelerate the path towards the virtual asset market.

HKVAX is currently in the process of applying for Type 1 & 7 licenses with the Hong Kong SFC.

For more information on HKVAX and further developments, please visit the official website.

About KYC-Chain

KYC-Chain offers state-of-the-art compliance solutions for companies of all sizes, focusing on identification and customer on-boarding, processing millions of KYC applications since 2014 in a cost-effective manner. KYC-Chain also provides algorithmic and anti-tampering validation checks for identifying fake images and documents, flexibility in developing custom templates and defining questions and documents as required for a particular process, as well as a digital approval or rejection application. Please book a demo at https://kyc-chain.com/

About HKVAX

HKVAX is a regulated virtual asset exchange in Hong Kong that is building a trusted and secured infrastructure layer for trading, where different parties can collaborate with each other, investors having exposure to the new digital asset class, and issuers can engage with a wide range of investors, creating a safe, fair and bona fide environment for everyone. Official website https://www.hkvax.com

PR Contact (Matt): pr@hkvax.com

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

Apollomics, Inc. and Edison Oncology Announce Licensing Agreement for Novel Protein Tyrosine Kinase Inhibitor Targeting Solid Tumors

FOSTER CITY, Calif. and HANGZHOU, China and MENLO PARK, CA, Feb 10, 2021 – (ACN Newswire) – Apollomics, Inc., an innovative biopharmaceutical company committed to the discovery and development of mono- and combination- oncology therapies, and Edison Oncology Holding Corp., today announced that Apollomics has been granted worldwide rights, excluding China, Hong Kong and Taiwan, for the development and commercialization of EO1001. EO1001 is a protein tyrosine kinase inhibitor (TKI) that has demonstrated irreversible inhibition of EGFR (ErbB1), HER2 (ErbB2) and HER4 (ErbB4) as a single agent.

"We are excited to add EO1001 to our clinical development portfolio as its pan-erbB inhibition and well-tolerated preclinical safety profile makes it a potential targeted therapy for the treatment of solid tumor malignancies that overexpress EGFR and/or HER2," said, Sanjeev Redkar, PhD, Co-Founder and President of Apollomics. "In preclinical models, EO1001 is potent against mutations in both the intracellular and extracellular domain of EGFR and has demonstrated activity in tumors with the ability to penetrate the central nervous system. As we advance our clinical development pipeline, we continue to seek assets like EO1001 with clearly defined mechanisms of action and differentiating attributes that we believe can make a difference for cancer patients worldwide. Looking ahead, a Clinical Trial Notification (CTN) Application in Australia will be submitted to initiate a clinical trial in the second quarter of this year."

Under the terms of the agreement, Apollomics has the exclusive rights to develop and commercialize EO1001 globally, except in China, Hong Kong and Taiwan. Edison Oncology will receive an upfront cash payment and will be eligible to receive potential development and sales milestone payments, as well as tiered royalties on net sales. Apollomics will be responsible for all costs related to development, regulatory approvals, and commercialization activities for EO1001 in the territories.

"Our extensive and successful preclinical work with EO1001 has led us to this collaboration with Apollomics who will now advance the asset into clinical trials with their experienced development team. Over 90% of solid tumors overexpress erbB pathways, and with the data we have produced to date, we are confident that EO1001 has the potential to improve treatment outcomes for patients suffering from life-threatening cancers," concluded Jeffrey A. Bacha B. Chief Executive Officer of Edison Oncology.

About EO1001
EO1001 is a protein tyrosine kinase inhibitor (TKI) that has demonstrated irreversible inhibition of EGFR (ErbB1), HER2 (ErbB2) and HER4 (ErbB4) as a single agent. EO1001 is potent against mutations in the intracellular domain of EGFR that are typically found in diseases such as Non-Small Cell Lung Cancer (NSCLC) including T790M, L858R and d746-750, and against mutations in the extracellular domain of EGFR including the EGFR-variant III (EGFRvIII) mutation that is characteristic of glioblastoma. In preclinical trials, EO1001 has been well tolerated and demonstrated activity against treatment-resistant ErbB-driven tumors, including malignancies in the central nervous system, in vivo.

About Edison Oncology

Edison Oncology was founded in 2018 by experienced life science industry veterans to develop and commercialize new therapies targeting the fight against cancer. Edison Oncology leverages a deep understanding of cancer biology and cancer pharmacology in order to identify and advance underdeveloped drug candidates with the potential to overcome treatment resistance and improve survival outcomes and quality of life for cancer patients.

About Apollomics, Inc.

Apollomics, Inc. is an innovative biopharmaceutical company committed to the discovery and development of mono- and combination- oncology therapies to harness the immune system and target specific molecular pathways to eradicate cancer. The company's existing pipeline consists of several development-stage assets, including novel, humanized monoclonal antibodies that restore the body's immune system to recognize and kill cancer cells, and targeted therapies against uncontrolled growth signaling pathways. For more information, please visit www.apollomicsinc.com.

Edison Oncology Contacts:

Company Contact:
Jeffrey Bacha
Chief Executive Officer
(650) 690-1927
jb@eohc.com

Media and Investor Relations Contact:
Amato and Partners, LLC
Investor Relations Counsel
admin@amatoandpartners.com

Apollomics Contacts:

Investor Contact:
Wilson W. Cheung
Chief Financial Officer
(650) 209-4436
wcheung@apollomicsinc.com

U.S. Media Contact:
Remy Bernarda
Corporate Communications
(415) 203-6386
remy.bernarda@apollomicsinc.com

China Media Contact:
Porda Havas International Finance Communications Group
Kelly Fung
General Manager
(852) 3150 6763
kelly.fung@pordahavas.com

Phoenix Fung
Assistant Vice President
(852) 3150 6773
phoenix.fung@pordahavas.com

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

[A Share Highlight] Intco Medical (300677:CH) Announced Record High Net Profit with Planned H-share Listing To Propel Expansion

HONG KONG, Feb 10, 2021 – (ACN Newswire) – Intco Medical (300677:CH), a leading Shenzhen listed personal protective equipment (PPE) provider, announced on 24 January a positive profit alert for the 12 months ended December 31, 2020. The company expected profit attributable to shareholders to range from RMB6,800 to RMB7,300 million during the review period, representing a year-on-year increase of 3713.45% to 3993.85%. The sharp jump in earnings was driven by surging global demand for disposable protective gloves amid the COVID-19 pandemic. This backdrop spearheaded significant increase in the prices of the company's disposable protective gloves, thereby boosting both sales revenue and gross profit margin.

The company also passed the resolution of H-share listing plan at the extraordinary general meeting of shareholders on January 6. In response to its favorable corporate development, many securities companies released research reports on the company.

Among these brokerage commentaries, Guosheng Securities pointed out that the operations and expansion of leading companies in Malaysia were constrained by the COVID-19 pandemic, but the Mainland-based market leaders have managed to become primary beneficiaries of the global capacity shift. Both volume and price of Intco Medical's glove business have risen in the wake of the pandemic, and the record high profit in turn generated abundant cash flow. As the industry leader, the company is expected to continue consolidating its dominant position in the domestic market. The planned H-share issuance is projected to further enhance capital strength. Leveraging its advantages in technologies and innovation in materials and production facilities, capital and resources, supply chain, sales network and brand, Intco Medical is well positioned to capture market opportunities to enhance its leadership in the disposable glove industry and aims to become the world's most competitive company in the PPE industry.

Indeed, the COVID-19 pandemic has raised tremendously the health protection awareness of people worldwide, and has also made governments of most countries reckon the lack of investment in public health. China Galaxy Securities noted that the COVID-19 pandemic has caused a huge deficiency gap in the supply of personal protective equipment such as disposable gloves. The hollowing out of manufacturing facilities in many developed countries has led to a shrinkage in the productivity of PPE materials. Most developing countries except China also lack the necessary industrial production infrastructure. China-based companies, as represented by Intco Medical, are expanding actively their production capacities to seize market share by virtue of their integrated industry chain advantages. Even if the pandemic subsides in the future, they are expected to capitalize on the supply relationship established during the pandemic, maintain customer connection and raise their market share of disposable gloves perpetually, thus becoming global leaders in the disposable glove industry.

Prevention and Control Measures Will Continue and Boost Global Gloves demands
Everbright Securities is of the view that measures taken to prevent and control the pandemic will continue for another two years and demand for daily personal protective equipment will remain at high level. The global disposable gloves market is expected to continue facing dramatic supply shortages as manufacturers worldwide are unlikely to cope with the explosion in COVID-19 driven global demand due to lack of labor and the time lag in the construction of production facilities.

Disposable glove processing equipment is not standardized, and each company needs to develop, design and construct by itself. It is extremely difficult for a production line to operate efficiently and stably with low energy consumption while ensuring product quality. All these require manufacturers to accumulate long-term production experience. At the same time, considering the construction costs of production lines, land, workshops, the investment threshold of a nitrile glove factory may exceed RMB300 million. Therefore, only leading manufacturers with capital and technological advantages manage to invest in large-scale nitrile glove factories. Furthermore, the construction cycle of the nitrile glove production line is quite long, and it takes at least 14 to 18 months for a project to start production from planning and site selection. Manufacturers who deploy production capacity earlier will gain the first-mover advantage.

Intco Medical – the largest disposable gloves provider in China and the second largest in the world
Intco Medical was the largest disposable gloves provider in China and the second largest in the world in terms of sales revenue in first half of 2020, according to the Frost & Sullivan Report.

The company has mapped out strategic locations proactively in a bid to expand production capacity. The company has established three production bases in Huaibei (Anhui, China), Qingzhou (Shandong, China) and Zibo (Shandong, China). In 2020, the company's newly added production capacity amounted to 17.0 billion pieces of non-latex disposable gloves, representing a growth rate of 89.5%. This was ranked the fastest ramp-up in the disposable gloves industry, according to the Frost & Sullivan Report.

As of February 2021, the production capacity of non-latex disposable gloves reached approximately 45.0 billion pieces. Based on the production capacity expansion plans, the company expects its annual production capacity for non-latex disposable gloves to reach approximately 120.0 billion pieces in the next 12 to 15 months.

The disposable gloves industry has experienced explosive growth against the backdrop of the COVID-19 outbreak since late 2019. According to the Frost & Sullivan Report, this market is expected to grow from US$8.7 billion in 2019 to US$24.9 billion in 2025 at a CAGR of 19.1%, in terms of sales revenue.

Intco Medical not only possesses innovative automated production facilities with advanced manufacturing process, but also owns a seasoned senior management team with rich experience and professional knowledge in the industry. Mr. Liu Fangyi, Chairman of Intco Medical, has been engaged in the international trade business of gloves and other products since the 1990s. He has achieved significant marketing results for major customers and understands well the development trend of the industry. Moreover, most members of the company's senior management team have a tenure of over 10 years. Led by a lean management system, the company encourages continuously innovation and efficiency.

Everbright Securities commented that the company has definitely been a leading high-end nitrile glove provider in China's domestic market commanding distinguished advantages of equipment integration, research and development in technology and location costs. The company is forecasted to become a global leading high-end medical-grade gloves provider in the long run.

Source: CNFOL.HK – Column

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

Positive profits expected to double in 2020, revealing the growth “secret” behind Joy Spreader’s outstanding performance

HONG KONG, Feb 10, 2021 – (ACN Newswire) – On February 8, Joy Spreader published an announcement to alert that its results in 2020 would achieve substantial growth over 2019.

According to the announcement, the Company's revenue in 2020 is expected to range from approximately HK$880 million to HK$920 million, an increase ranging from around 63.6% to 71.0% as compared to 2019. The gross profit is expected to range from roughly HK$260 million to HK$300 million, an increase ranging from approximately 95.5% to 125.6% as compared to 2019. The profit before exchange gains and losses is expected to range from roughly HK$170 million to HK$200 million, representing an increase ranging from about 123.7% to 163.2% year on year, equivalent to 2.2 times to 2.6 times compared to the same period in 2019.

As disclosed in the prospectus, Joy Spreader's revenue reached a CGAR of 87% and the net profit reached a CGAR of 63% between 2017 and 2019. In the first half of 2020, the revenue and net profit increased by 66.2% and 123.3% year on year, respectively.

Since before listing, Joy Spreader has maintained a strong momentum of continuous rapid growth in performance. The growth "secret" behind the outstanding performance is worthy of attention.

01 The track of mobile-new-media, represented by short videos, has grown rapidly, bringing significant historical opportunities to the performance-based marketing industry

With the rapid development of mobile Internet applications in China, text-based we-media, represented by WeChat official accounts, are flourishing and still in the ascendant. In terms of the number of users, activity level and other dimensions, the fact that short-video mobile-new-media platforms represented by DouYin and KuaiShou have emerged rapidly and gained increasing acceptance by Internet users, is becoming the core driver leading the growth of Internet industry in China. While platforms are competing for user growth, retention, and activity level, the ways to refine the business model and helping PGC and UGC users in the platform ecology to achieve value conversion have become the focuses. Platforms continue to open up traffic monetization channels, allowing content publishers to monetize traffic through advertising, games, online reading, e-commerce, and other products, which undoubtedly enlarges the market opportunity for mobile-new-media marketing.

As the pioneer and leading company of performance-based mobile-new-media marketing market in China, Joy Spreader sufficiently benefits from opportunities brought by the development of the industry. In June 2013, soon after the launch of the WeChat official accounts, the Company took the lead in using marketing-SaaS services to provide commercial monetization services for publishers of text-based content on the official accounts. In January 2019, the Company was among the first to provide commercial monetization services for short-video content publishers from the beginning of DouYin's commercialization. While consolidating the original business position, the Company seized historical opportunities to enter into new areas on time, reflecting Joy Spreader's farsightedness and sensitivity in strategy and also providing the Company with first-mover advantages in the industry.

The opportunities of the short-video track are also reflected in the popularity of KuaiShou's listing recently. The result of its IPO subscription showed that KuaiShou's IPO had received approximately 1.423 million applications for subscription from retail investors, with oversubscription by more than 1,200 times, and had frozen retail investors' funds of approximately HK$1.28 trillion, making KuaiShou achieve the greatest amount of frozen capital in the Hong Kong Stock Market. On the first day of listing, KuaiShou's share price soared 161%, with a market value of HK$1.23 trillion.

Revaluation of the short-video industry chain has been made by the capital markets in the listing of KuaiShou and will further promote the commercialization of short-video platforms. The short-video marketing market will continue to maintain rapid growth in the next few years, which is undoubtedly an excellent period of historical opportunity for Joy Spreader.

02 As a stabilizer of business growth, SaaS services provide high-quality media resources, data accumulation and analytical capabilities for performance-based marketing

It is worth noting that Joy Spreader pointed out in the positive profit alert that one of the important reasons for the performance growth came from the steady increase of the number of users of we-media monetization services (realized by SaaS services). SaaS is the abbreviation of Software-as-a-Service. SaaS companies uniformly deploy application software on cloud servers, so that clients can choose software services provided by SaaS companies online based on their needs of work.

Joy Spreader's main business model is to provide performance-based marketing for clients' products including online cultural products and consumer goods on we-media (or mobile-new-media) platforms such as DouYin and WeChat official accounts. The distribution of online cultural products, including Html5 games and online reading, is mainly achieved through marketing-SaaS services. With the help of the marketing-SaaS service tools provided by Joy Spreader, we-media publishers can directly access its product catalog. The intelligent algorithm engine enables publishers to choose products that best meet the interests and needs of their fans with the highest monetization efficiency, while being legitimate and in compliance with the law.

The application of the SaaS platform in the field of online marketing has completely subverted the traditional online marketing model of traffic trade. The great significance of providing marketing-SaaS services to we-media publishers is that the company can automatically obtain stable high-quality content resources from the traffic platform. While allowing content publishers to monetize efficiently, it can also analyze marketing effects in real-time, providing strong support for Joy Spreader's data accumulation and algorithm iteration.

The accumulation of content-publisher resources is also inseparable from marketing-SaaS services. According to Joy Spreader's Voluntary Announcement of Business Update on December 6, 2020, as of the end of October 2020, the Company provided content monetization services to an aggregate of 36,612 WeChat official accounts, representing an increase of 63.5% as compared to the number as of 31 December 2019. The number of cooperating DouYin accounts, with e-commerce sales and product placement, exceeded 3,000. The number of we-media user traffic access points increased to 366,120, a significant increase compared to the previous year.

Marketing-SaaS services have significantly promoted the increase in the number of mobile-new-media resources and the level of activity, to simulate the effect of performance-based marketing, as well as the increase in the number of marketing clients and product categories.

The marketing-SaaS service platform is expected to help Joy Spreader enhance its ability to quickly accumulate mobile-new-media resources, further stabilize and expand the traffic pool, and ultimately achieve better marketing efficiency and effectiveness.

03 Gross margin improvement verifies Joy Spreader's business model, and data- and-algorithm advantages

According to the forecast of the positive profit alert, the gross profit margin of Joy Spreader in 2020 is expected to be between 29.5% to 32.6%, which is significantly higher than that of 27.1% in the first half of 2020 and 24.7% in 2019.

To a certain extent, the improvement of profitability verifies Joy Spreader's business model of performance-based revenue and the leading edge of the data algorithm. Under the data-driven performance-based marketing, service providers can achieve efficient and accurate data matching by establishing massive databases and tagging. With the increasing number of marketing services, massive data feedback will further optimize the matching efficiency of the algorithm and continuously improve the ROI of marketing services for the Company.

Data and algorithms are key elements and core competitiveness of Joy Spreader's performance-based marketing business. As disclosed in the listing prospectus of Joy Spreader, during the track record period, Joy Spreader has accumulated a large amount of anonymous user behavior data through its services of approximately 1.5 billion online clicks. The Company has established a tag library with thousands of fields for content publishers, including 1) demographic information of fans (such as age range, gender, geographical area, and predicted education level); 2) browsing interest and preference; and 3) nature of we-media content (such as format and category), to improve the accuracy of matching and achieve the expected marketing results.

The improvement of the expected gross profit level in 2020 reflects the success of Joy Spreader's business model, the high efficiency of marketing-SaaS service, and the value and bargaining power of its data algorithm in the business chain. With the gradual emergence of the Matthew effect in the field of online marketing, more client resources and content-publisher resources are expected to be further integrated into the leading players, which will be further conducive to the performance-based marketing effectiveness and SaaS service capability of Joy Spreader in the future.

04 NCO (Network Culture Operation) license supports the ability of distribution and joint-operation of online cultural products such as games and online reading

It is known that as one of the few enterprises in the industry with the qualification of network culture operation license, Joy Spreader possesses the capabilities of distribution and joint-operation of cultural products such as Html5 games and online literature in China.

As a data-and-algorithm driven technology company, Joy Spreader has used its efficient and easy-to-use marketing-SaaS services to provide convenient tools for we-media content publishers for many years, helping them to monetize their traffic from distribution and joint-operation of games, online reading, and other online cultural products.

In 2020, the number of games and literary distributed and joint-operated by Joy Spreader increase significantly. According to the Voluntary Announcement on Business Update published by Joy Spreader on 6 December 2020, by the end of October 2020, the number of online game products promoted by Joy Spreader has reached 205, representing an addition of 61 game products compared with the whole year of 2019; the number of online literary works reached 858, covering 77 categories, representing an addition of 276 new literary works, and 10 new categories compared to the end of 2019. Compared with other online cultural products, the gross profit margin of Html5 game products is relatively high, by allowing the Company to share commissions from the in-game sales from game developers. It has also become a contributing factor to the expected performance growth in 2020.

05 The rapid development of e-commerce sales marketing business indicates higher growth in the future

In the field of short-video e-commerce sales marketing, Joy Spreader is also expected to achieve remarkable results in 2020. Although the details of sales are yet to be disclosed in the positive profit alert announcement, the strong growth of this business sector has been revealed in its past performance announcement. According to the data disclosed in the 2020 interim report, from January to June 2020, the revenue from consumer goods marketing of Joy Spreader increased by 147.76% compared with that in the same period in 2019. The so-called consumer goods marketing business refers to the short-video e-commerce sales marketing business. Compared with online cultural products marketing, consumer goods marketing has a much higher gross profit margin.

In the Voluntary Announcement on the latest performance progress on 6 December 2020, the Company further disclosed the progress of its e-commerce sales marketing business: the number of the category has reached 156, developing from electronic products to full consumer product lines such as daily necessities and cosmetics.

According to the public information, the Company's gross profits from performance-based marketing in the field of e-commerce sales marketing accounted for approximately 16% in 2019, and this proportion increased to 26% in the first half of 2020. Base on the forecast of this trend, it is estimated that the gross profit contribution will exceed 30% in the full year 2020 and beyond. The development of short-video e-commerce sales marketing business has become one of the biggest drivers for the business growth of Joy Spreader.

"Yesterday belongs to social e-commerce, today belongs to live streaming e-commerce, and tomorrow belongs to short-video e-commerce" is a widely spread assertion regarding the development trend of mobile-new-media e-commerce in the industry. As one of the first companies to promote short-video e-commerce sales marketing on DouYin platform, Joy Spreader, a performance-based marketing service company, has commenced its short-video e-commerce sales marketing business from the very beginning and has accumulated a large amount of data and technical experiences. With the continuous in-depth development of the industry, the future development of the Company in the field of short-video e-commerce will be worth looking forward to.

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

Sri Trang Gloves PCL (SET: STGT) takes serious action to protect employees against new Covid-19 outbreak

BANGKOK, Feb 9, 2021 – (ACN Newswire) – Sri Trang Gloves (Thailand) PCL (SET: STGT) enacts protective measures against the new Covid-19 outbreak – infection screening, weekly disinfectant spraying, mask wearing, and social distancing. Foreign workers are required to have work permits and passports. Additionally, Reduced congestion and increased hygienic housing are to be provided for employees to reduce risks. No labor shortages are expected while four new manufacturing plants are scheduled to open this year.

Ms. Jarinya Jirojkul, Chief Executive Officer of STGT, a global producer of latex and nitrile gloves, reports that since the outbreak of Covid-19 infections early last year, STGT has put considerable effort into providing safety measures to screen and protect all plant and office employees to assure customers that its premises have strict hygienic measures and are able to continue production uninterrupted.

Currently, STGT employs more than 9,000 persons, about 3,000 or 40% of whom are foreign. As a matter of policy and pride, the company provides both foreign and Thai workers a safe working environment and welfare without discrimination.

Since the Covid-19 outbreak, strict screening and preventive measures have been implemented, including the following: temperature screening of all employees before entering work areas as well as dormitories; random temperature checks of personnel during the day; requiring hygienic face masks while on duty; implementing social distancing; providing cleansing alcohol for all personnel; requesting employees cease interprovincial trips to at-risk zones and to inform superiors if a trip becomes necessary.

In addition, regular disinfection of various spaces, such as dining halls and employee dormitories, has been increased from monthly to weekly. Recently, the company has also included surrounding communities in its disinfection schedule.

For foreign workers, the company ensures that they have proper work permits and travel documents. They are provided with proper housing with each unit accommodating no more than 3 persons. Access to living quarters are strictly regulated and movement monitored to prevent unauthorized access.

STGT is currently in the process of opening another four plants in Surat Thani Province and Sadao District of Songkhla Province with an opening scheduled for each consecutive quarter this year. As a consequence, the company will need 1,500 new employees to cope with the increasing production capacity to 36,000 million gloves per year, an increase from last year's 33,000 million pieces.

To ensure no labor shortages, the company has planned to recruit new employees among Thai residents in areas around the company's plants as a matter of policy to help Thai workers who are facing unemployment problems during this particularly difficult time.

Released by Public Relations Dept., MT Multimedia Co., Ltd. for Sri Trang Gloves Plc.
Wasana "Jeab" Wongsiri, Tel: +66 84 359 0659, +66 2 612 2081 ext. 131, wasana.w@mtmultimedia.com

Copyright 2021 ACN Newswire. All rights reserved. http://www.acnnewswire.com

Shougang Century Announces Positive Profit Alert

HONG KONG, Feb 9, 2021 – (ACN Newswire) – Shougang Concord Century Holdings Limited ("Shougang Century", together with its subsidiaries, "the Group"; stock code: 0103.HK) is pleased to announce that, based on its preliminary assessment of the unaudited consolidated financial statements of the Group for the year ended 31 December 2020, the Group expects a profit after tax of not less than HK$130 million, at least 20% more than that of HK$108 million for the previous year. Such increase was primarily attributable to the improvement of gross profit margin arisen from the decrease in production costs and the reduction in finance costs.

Shougang Century is primarily engaged in manufacturing of steel cords for radial tyres, sawing wires and other wire products. The Group's two large production bases, which are located in Zhejiang Province and Shandong Province, produce approximately 200,000 tonnes of steel cords in total every year. In 2019, the Group kicked off an expansion plan in its Tengzhou factory and invested in new brass wire production facilities to add a further 100,000 tonnes of steel cord production capacity. As the construction progress is satisfactory, the Group is building towards its goal to become an enterprise commanding an annual manufacturing capacity in excess of 300,000 tonnes of high-quality steel cords.

Mr. SU Fanrong, Chairman and Managing Director of Shougang Century said "With the outbreak of coronavirus disease under control in China, demand for logistics in the nation witnessed a substantial increase, driving demand for large vehicles' tyres. Leveraging the Chinese government's 'domestic circulation' policy, coupled with the intense rigid demand on tyres, the Group's operation is promising as the sales of steel cords is expected to bloom. In addition, the demand for 'green tyres' will grow remarkably, thanks to the Chinese government's efforts in energy conservation and emission reduction. That is anticipated to expedite the market expansion of steel cords for radial tyres and bring an ample room for development to steel cord industry. In 2020, through actively adopting stringent cost reduction measures, we managed to increase the gross profit margin. Furthermore, with the reduction in finance costs, the Group's profit after tax witnessed an outstanding growth. Looking forward, we strive to continuously increase our market share, thus creating long-term returns for our shareholders and investors."

About Shougang Concord Century Holdings Limited
Shougang Concord Century Holdings Limited (0103.HK) is primarily engaged in manufacturing of steel cords for radial tyres, sawing wires and other wire products. The Group possesses two large production bases in Zhejiang Province and Shandong Province, together producing approximately 200,000 tonnes of steel cords annually. Having been delivering products of a consistently premium quality over the years, the Group supplies products to over 20 countries worldwide and has won wide recognition from international tyres manufacturers. Listed on The Stock Exchange of Hong Kong since April 1992, the Group has a strong shareholder base with substantial shareholders including Shougang Group Co., Ltd. (a state-owned enterprise under the direct supervision of the Beijing State-owned Assets Supervision and Administration Commission), a Fortune 500 company, and its controlled corporations, Bekaert Group and Li Ka Shing Foundation Limited. Through its longstanding dedication to purveying premium quality steel cords and wire products, the Group aims to become one of the top three independent manufacturers of steel cord industry in China.

For more information, please visit: http://www.shougangcentury.com.hk

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Positive profit alert exceeds expectations Research houses issue upbeat recommendations On Central China New Life

HONG KONG, Feb 8, 2021 – (ACN Newswire) – Central China New Life Limited (Stock Code: 9983.HK) issued earlier a positive profit alert on its 2020 annual results in which it forecast the company's net profit to increase by no less than 80%. The Company's strong performance, which exceeded market expectations, subsequently earned "Buy" or "Overweight" ratings from different securities houses. The price targets issued by securities houses ranged from HKD11.2 to HKD16.47, indicating potential upside of between 47% and 88% compared to the stock's closing price of HKD7.6 last Friday. Everbright Securities was the most upbeat among different securities houses as it significantly raised its target price originally set at HK$14.62 to HK$16.47. CCBI reiterated the company as the top pick among property management sector.

Recommendation / Target Price
Everbright Securities Buy HK$16.47
CCBI Outperform HK$13.8
DBS Buy HK$12.51
BNP Paribas Buy HK$13.2
CMB International Buy (Initiation) HK$11.2
Guosheng Maintain Buy HK$14

Central China New Life has announced that its unaudited consolidated net profit attributable to shareholders for the year ended 31 December 2020 was expected to expand substantially by no less than 80% compared to the previous year's level. It attributed the huge increase mainly to (1) the significant increase in gross floor area under management and revenue growth from value-added services of the property management and value-added services; (2) increased revenue from lifestyle services resulting from the significant increase in the number of registered users of the Group's Jianye+ platform; and (3) the Group's implementation of quality improvement and efficiency enhancement measures, resulting in the continuous decline of the management expense ratio. The strong performance has subsequently earned upbeat recommendations from different securities houses.

Everbright Securities: Benefits of deep penetration gradually unleashed; Issues "Buy" recommendation and raises target price to HKD16.47

Everbright Securities said in a research report that after Central China Real Estate's expected successive delivery of projects, acquisition of new projects and expansion of existing projects, the density of its projects in Henan Province will further increase, and the benefits of its long-term deep penetration into the region will gradually materialize. As a result, it will enhance its cost control and rapid expansion capabilities, as well as the standard of its property management services. Moreover, the company's Jianye+ platform will take full advantages of the concentration of its users in the region, and it will benefit from the multiplier effect and user coverage expansion. Everbright Securities has maintained its "Buy" rating and raised its target price for the Company from HK$14.62 to HK$16.47.

CCBI: Reiterates view that Central China New Life is top pick among property management companies; Maintains "Outperform" rating with target price of HKD13.8

CCBI said in a research report that as of Dec 2020, non-residential properties accounted for 41% of Central China New Life's managed GFA, up from 30% in 2019, showcasing the management's efforts to diversify the company's management portfolio. CCBI expects Central China New Life's contracted GFA and managed GFA to grow by 40-50% in 2021, and it forecast the CAGR of the company's net profit to reach 53% in 2020-2022. CCBI has reiterated its view that Central China New Life is its top pick among property management companies, and it has maintained its "Outperform" rating on the Company with a target price of HKD13.8.

DBS: Maintains "Buy" rating with target price of HK$12.51; Undervalued high-growth stock

According to a DBS research report, Central China New Life has a well-established Jianye+ platform that is already operating under a well-proven membership model. It is well-positioned for future community monetization. As of the end of December 2020, the Company's contracted and managed GFA reached guidance of 186 million sq.m. and 100 million sq.m., respectively. Thanks to its regional focus in Henan, Central China New Life has the highest project density among its peers and it has ample room to enjoy gains in operational efficiency. DBS has raised its forecast FY2020-2022 earnings for Central China New Life by 5%-8% and maintained its "Buy" rating with a target price of HK$12.51.

BNP: Strong growth likely over next three years; Maintains "Buy" rating with target price of HK$13.2

BNP said in a research report that Central China New Life has issued a positive profit alert and has maintained strong growth across all segments. Central China Real Estate's delivery of projects and the new property management contracts awarded by third-party developers will drive the company's strong revenue growth over the next three years. In addition, the company's Jianye+ one-stop online-to-offline platform for products and services offers huge potential to scale up the number of its users. The platform will serve as the principal driver of its lifestyle services segment. BNP considers Central China New Life's current share price as undervalued and it has maintained its "Buy" rating for the company with a target price of HK$13.2.

CMBI: Initiated a "Buy" rating on Central China New Life with target price at HK$11.2 on its prominent regional leadership

CMBI said that Central China New Life has established strong leadership in Henan. Its rapid growth can compensate for its lower property management fees as a regional property management company. As of December 2020, Central China New Life's reserved GFA stood at 87% of its total GFA under management, clearly demonstrating its highly visible expansion track. CMBI expects the company's total GFA under management to achieve a CAGR of 52% between 2019 and 2022. Its merger and acquisition activities in Henan will drive its growth further. CMBI considers that the company's regional leadership is currently underestimated and has initiated a "Buy" rating on the company with a target price of HK$11.2.

Guosheng Securities: Maintains "Buy" rating on Central China New Life and raises target price to HK$14 as it accelerates business layout establishment beyond the province

Guosheng Securities said in a research report that Central China New Life acquired 51.0% of Taihua Jinye for a consideration of RMB100 million at the end of last year. The acquisition not only solidifies further the company's business layout beyond the province, but it will also continue enhancing its project density in Hebei. In 2020, new registered users of the Jianye + platform rose 30.3% year-on-year to 1.49 million. The annual GMV was RMB780 million, an 83.9% spike year-on-year. With the continuous expansion of the company's user coverage, GMV of the Jianye + platform is expected to maintain its rapid growth going forward. Guosheng Securities has maintained its "Buy" rating for the company and raised its target price from HK10 to HK$14 (based on 25x PE in 2021(E)).

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JBM (Healthcare) Limited Debuts on The Main Board of SEHK

HONG KONG, Feb 5, 2021 – (ACN Newswire) – JBM (Healthcare) Limited ("JBM Healthcare" or "Company", together with its subsidiaries, the "Group"), a Hong Kong-based company that markets and distributes branded healthcare products across Greater China, Southeast Asia and certain other countries, started trading today on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK") under stock code 2161.

JBM Healthcare's diversified brand portfolio comprises a total of 20 principal brands,
including 11 third-party brands and 9 own brands.

As a subsidiary of Jacobson Pharma Corporation Limited ("Jacobson Pharma"; Stock Code: 2633), JBM Healthcare is a unique field player with drug expertise and ethical heritage that prioritises product efficacy and quality to meet consumers' healthcare needs. As a leading healthcare brand operator in Hong Kong, the Group carried a total of 20 principal brands, including 11 third-party brands and 9 own brands covering both OTC proprietary medicines and OTC proprietary Chinese medicines. Upon completion of the public listing, Jacobson Pharma continues to indirectly hold over 50% equity interest in JBM Healthcare and JBM Healthcare remains as a subsidiary of Jacobson Pharma.

Further to the successful listing, the Group will aim at expanding its product offerings and deepening product penetration in China through cross-border e-commerce initiatives as a result of the rapid growth of the PRC cross-border e-commerce market, as well as the rising demand for overseas healthcare products along with an increasingly structured and formalized cross-border e-commerce channel in the PRC market. Simultaneously, the Group will also further expand its portfolio through organic growth and mergers and acquisitions to maintain its competitive position and ensure its future growth and success.

Leveraging the Group's established local business relationships and networks, JBM Healthcare targets to develop a branded healthcare product sourcing and distribution platform in Asia through the integration of its regional resources and foothold, strengthening and expanding its geographical reach in Southeast Asia. In addition, backed by its extensive market base in Hong Kong, the Group is well poised to unleash the sales and distribution potential of its Chinese medicine practitioner network.

The net proceeds from the Public Offer amounted to approximately HK$10.6 million. The Group will allocate 47.2% of the proceeds to fund portfolio development and brand management of proprietary Chinese medicines; while 43.4% will be used to pay for the obtaining of additional distribution rights from third-party brand owners, as part of the strategy to grow its third-party brand product portfolio. The remaining 9.4 % will be used to supplement working capital and for general corporate purposes.

About JBM (Healthcare) Limited (Stock Code: 2161)
JBM Healthcare is a Hong Kong-based company that markets and distributes branded healthcare products with a product footprint across Greater China, Southeast Asia and certain other countries. As a leading healthcare brand operator in Hong Kong, JBM Healthcare carries a portfolio of a wide range of branded healthcare products, comprising branded medicines, health and wellness products and proprietary Chinese medicines. For more details about JBM Healthcare, please visit: www.jbmhealthcare.com.hk

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China Medical System (0867.HK) Acquires a Dermatology Specialty Company: A Tough Player the Race

HONG KONG, Feb 5, 2021 – (ACN Newswire) – On February 1, China Medical System (0867.HK) announced that its subsidiary had acquired Luqa Ventures Co., Limited ("Luqa"), a dermatology specialty company. This acquisition expanded its product portfolio to include Luqa's dermatology products and marked the first foray into the medical aesthetic industry for China Medical System.

Why medical aesthetics? What is the significance of this acquisition?

1. Consolidating the Skin Management Business and Entering the Medical Aesthetic Market: Acquiring Luqa to Explore a New Growth Engine

According to its official website, established in 2010, Luqa is an innovative enterprise with skin treatment and medical aesthetic solutions as its core business.

Its founder, Mr. Luo Benwei, is experienced in medicine and was involved in Asia's skin management and medical aesthetic industry before establishing Luqa. In 2005, as Almirall's youngest international business development manager, Mr. Luo successfully drove the company's products into markets in Africa, the Middle East, West Asia and East Asia.

China Medical System recognized Luqa's many advantages, including: its abundant overseas resources of medical aesthetic solutions, insights and experiences in introducing quality medical aesthetic solutions to new markets; its network of domestic medial aesthetic service providers; and its unique portfolio, especially the innovative products and solutions in the dermatology and medical aesthetic field.

Luqa's current product lineup covers prescription drugs, medical devices, and medical aesthetic solutions and skin care products. Regarding its prescription drugs and medical devices, Luqa currently provides the cleansing sclerosant Aethoxysklerol, which is used for the treatment of the sclerotherapy of small to large varicose veins, varicose of central veins of spider veins and reticular veins, the self-drying silicone scar therapy gels Stratamark/Strataderm, which is indicated for prevention and improvement of hypertrophic scar, the imidazole topical antifungal drug Zalain, and other blockbuster products.

In terms of medical aesthetic solutions and skin care, Luqa features high-end products from authoritative European brands. Mesoestetic, the leading medical aesthetic brand from Spain, is a major supplier of its medical aesthetic solutions, including the various skin booster series mesohyal and anti-ageing solution mesoeclat. Luqa also features products from Neauvia, a famous hyaluronic acid filler manufacturer from Switzerland. Luqa's medical skin care line offers products from Mesoestetic and two personal care brands of Ferrer, a well-known Spanish pharmaceutical company.

As most of these products have already launched in their domestic markets, they constantly create value while still having considerable market potential. With this acquisition, Luqa's financial results will be consolidated into China Medical System, which are expected to be a new growth engine for China Medical System.

Data speculations can be made based on potential market opportunities available for these products.

Aethoxysklerol, for example, is a cleansing sclerosant that can act locally on the vascular endothelium for the treatment of the sclerotherapy of small to large varicose veins, varicose of central veins of spider veins and reticular veins. As a high-incidence disease of common concern, there are approximately 100 million patients with varicose veins in the lower extremities in China according to a 2018 survey. Assuming a consultation rate of 30% and an active treatment rate of 40%, it can be concluded that there are approximately 12 million patients under treatment. Further assuming 25% of those patients can be treated with Aethoxysklerol leaves about 3 million target patients. Based on the average price of about RMB 480 for a single unit and 2 units consumed per capita, the cost per capita reaches about RMB 1000. The product's market potential is thus expected to reach RMB 3 billion.

Stratamark/Strataderm, for example, Stratamark is widely used in Europe and the United States to prevent and treat stretch marks caused by pregnancy, weight gain or loss and adolescent growth spurts, etc. with a clinically proven safety and efficacy. In two randomized clinical trials conducted in Europe and Australia which enrolled a total of 577 subjects, Stratamark is proven to be safe and effective in the prevention and treatment of stretch marks and related skin itching and discomfort. It has been shown that once daily application leads to 70.2% stretch mark prevention and 80% improved in existing stretch marks. Currently, there is no clinically proven effective alternative in China.

Looking more closely at pregnancy related stretch marks clearly demonstrates the expected market potential of Stratamark. According to Statistical Bulletin on the Development of Health Care in China in 2019, the number of births in 2019 was 14.65 million, and the corresponding pregnant women are about 14.65 million. Although epidemiological studies have shown the incidence of stretch marks is 50-90%, for the following explanation we will use the median estimate of 70%. Following, we can further assume that about 25% of pregnant women are willing to try Stratamark. The treatment starts four months after pregnancy and lasts at least 3 months, that is, each person consumes 3 units and each unit is worth RMB 1000. The market potential of Statamark is therefore expected to reach RMB 7.7 billion in China.

There are also considerable demands for Statamark for people who evidence stretch marks due to adolescent growth spurts. Relevant research shows that the prevalence of pubertal (10-19 years old) stretch marks is 72%-77% for females and 6%-86% for males. In 2019, China's population amounted to 1.4 billion, of which pubertal females accounted for 5.1% (71.32 million) and pubertal males accounted for 5.9% (82.51 million). According to the average incidence of stretch marks due to adolescent growth spurts (74.5% for females and 46% for males), the total number of teens with stretch marks is about 90 million. Since detailed statistics about the current treatment of adolescent growth spurt stretch marks in the Chinese market does not exist, we will assume that 1% of the affected population will choose the product, i.e. 900,000 people. The recommended dose is 3 units per course, and each unit is worth RMB 1000. Thus, the market potential of the product for treatment of adolescent growth spurt stretch marks is expected to reach RMB 2.7 billion.

With the conservative estimate of overall market potential exceeding RMB 10 billion, Stratamark has a very promising market outlook.

In sum, this acquisition is of great significance to China Medical System. Firstly, Luqa's dermatology portfolio will synergize with China Medical System's current dermatology line, thereby facilitating the latter's further expansion in the dermatology field. Secondly, Luqa's presence is expected to bring strong growth momentum to the financial performance of China Medical System.. Thirdly, Luqa has an excellent team, strong product portfolios and extensive partnerships, which will integrate with China Medical System.'s resources and help further broaden the market and boost the comprehensive competitiveness of both sides.

2. Entering the Hundred-billion-dollar Sized Market, What China Medical System. Has to Offer

Because today people value beauty, the medical aesthetic industry is not only rapidly growing but also has great potential. According to Frost & Sullivan, China's medical aesthetic market size was RMB 176.9 billion in 2019, with a CAGR of 22.5% from 2014 to 2019. This makes the Chinese market for medical aesthetic solutions the fastest growing in the world, and it is expected to maintain a high growth rate of more than 20% in the coming years. In fact, China is also expected to overtake the United States to become the world's largest medical aesthetic market in 2021.

We can also be optimistic about the overall market penetration rate. According to Zhao Yue, an industry analyst from Sealand Securities, compared with the United States and South Korea, China's per capita consumption and treatment penetration rate of every 1000 people in the medical aesthetic market still has space to more than quadruple. As such, the market size in China is expected to reach RMB 360 billion in the next 3 years and RMB 2 trillion in the long run.

Therefore, this acquisition is undoubtedly an attempt to capitalize on the resources of China Medical System and Luqa to seize the huge and historic market opportunity.

China Medical System' product lines include the cardio-cerebrovascular line, digestive line, ophthalmic line, dermatology line, etc. Among these, the product layout of the dermatology line has the natural advantage when considering an entrance into the medical aesthetic field. Currently, China Medical System has both marketed products and innovative candidates that are expected to market in short-, medium- and long-term, including Hirudoid (mucopolysaccharide polysulfate cream), which has already been marketed in China, and the innovative biologic Tildrakizumab, which is in domestic registrational clinical trials. The market potential of each of these products is also considerable.

Hirudoid is mainly used for the treatment of blunt traumata with or without hematomas, and superficial phlebitis that cannot be treated by compression. The product was classified in the national reimbursement drug list in January 2020. Its sales in Japan amount to RMB 3 billion. Considering that the population of China is several times larger than that of Japan, the domestic market potential is expected to exceed RMB 4 billion.

Tildrakizumab has been approved for marketing in the United States, Europe, Australia and Japan for the treatment of adult patients with moderate to severe plaque psoriasis. In China, the substance and formulation patents for Tildrakizumab have been approved. In December 2020, China Medical System announced the completion of the first patient dosing in the registrational clinical trial in China. It is expected that the product will be officially launched in China in 2022. China Medical System defines it as a novel monoclonal antibody targeting IL-23 with the best cost-effectiveness. Its peak market potential may reach RMB 6 billion.

Therefore the Luqa acquisition further deepened China Medical System's deployment of the dermatology product line, creating unique product portfolios and strengths, which will also empower the company to form differentiated competitiveness and allow the company to develop at a blistering pace in the race.

Compared with mature markets, such as those in Europe and the United States, China's medical aesthetic industry started late, so related products and medical devices are mainly imported from abroad. Currently, among the upstream medical aesthetic drugs and medical devices, Botox, hyaluronic acid and laser equipment are the most used. Brands from the United States, Germany, the United Kingdom and South Korea lead the Botox market. In the domestic hyaluronic acid market, imported products still occupy the main market share. According to data from CHYXX, in 2018, brands from South Korea, the United States, and Sweden occupied more than 70% of the market share. In addition, the market of medical aesthetic devices is also dominated by foreign brands, including products from Germany, the United States, Israel and other countries. Therefore, it is clear that China Medical System's acquisition of Luqa marks its entrance into the medical aesthetic market and foreshadows how the company will introduce relevant leading overseas technologies and products into the Chinese market.

China Medical System, through past development, has accumulated rich resources and market development experience in the introduction of overseas pharmaceutical products. The company has a sustainable and stable business backed by strong financial support, and its product layout in dermatology could synergize with the medical aesthetic solutions. This acquisition integrates these strengths with Luqa's resources in the European medical aesthetic market, which will help China Medical System to introduce leading overseas resources and technologies into the domestic market, offer comprehensive medical aesthetic solutions for Chinese patients, and expand its competitiveness in the Chinese market through its globalized supply network.

In addition, the acquisition will also help to further broaden the downstream market and maximize both companies' advantages. On the one hand, China Medical System has been cultivating the domestic pharmaceutical market for more than 20 years and has accumulated rich experience and resources in both traditional channels (such as hospitals, medical institutions, pharmacies) and e-commerce channels. According to the company's 2020 interim report, China Medical System' promotional network covered 57,000 hospitals and medical institutions nationwide, including all provincial cities and most prefecture-level cities in China. On the other hand, as a leading brand in the domestic dermatology and medical aesthetic market, Luqa has established in-depth ties with hospitals, medical aesthetic institutions and retailers in various regions, and has a nationwide distribution network. The integration will not only help to further place products into new markets, but also expand the cooperation with existing channels in multiple product categories, which will enhance the company's added value and unleash stronger growth momentum. At the same time, the cooperation will also help to unleash the strengths of both company's resources and the effectiveness of their teams, further enhancing their market influence through brand synergy. Ultimately this cooperation will form a positive cycle that will continue to consolidate their core competitive advantages.

This complementary combination will be a force to be reckoned with in China's rapidly-growing medical aesthetic market.

3. How does China Medical System's Internal Competitiveness Benefit from the Acquisition?

With this acquisition, the huge synergy between the two parties, with regards to skin management and medical aesthetic solutions, will help China Medical System's business development and business models to stand out among the many market players. We believe China Medical System will build a high-end, differentiated medical aesthetic brand and product cluster with a promising future.

Due to the industry's high profitability and growth, medical aesthetic companies tend to be valued higher. Bloomage Biotech has a dynamic PE of 146 times and a total market value of RMB 89.3 billion, while Imeik has a dynamic PE of over 300 times and a total market value of RMB 95.3 billion.

In comparison, the current dynamic PE of China Medical System is only about 12 times, with a total market value of HK$27.5 billion (RMB 22.9 billion). With the incorporation of quality assets and the boost brought by future performance and the transformation of business structure, the revaluation and valuation improvement of China Medical System is expected to begin. Earlier, a Botox made in Korea and approved for the Chinese market caused the share price of its exclusive agent, Sihuan Pharm, to skyrocket by 160% in four trading days. China Medical System thus has every reason to have even greater expectations.

The medical aesthetic industry is a segment worthy of long-term attention, which is prone to produce big winners. After the acquisition of Luqa, China Medical System has formed a stronger sustainable development capacity and core competitive strengths, and is expected to take the lead in China's medical aesthetic industry. With huge long-term growth potential, its development and value creation is accelerating.

Gelonghui Statement: The views in this article reflect those of the original author and do not represent the views and position of Gelonghui. As a special reminder, investment decisions need to be based on independent thinking. The content of this article should be used for reference only and not as actual operational advice. Trade at your own risk.

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