Highlights of 2022 Interim Period

l Turnover increased 83.6% to approximately HK$686,909,000, and net profit attributable to owners of the company increased 181.45% to approximately HK$68,220,000

l Gross profit increased by 63.9% to approximately HK$354,904,000 and gross profit margin remained at a high level of 51.7%  

Nucleic acid testing and other testing services

l Turnover from medical laboratory testing services and health check services increased by 27.1% to approximately HK$460,906,000

l The number of nucleic acid test (“NAT”) samples completed by Sunrise Diagnostic Centre Limited (“SDCL”) rose significantly to over 10 million as of 30 June 2022

l SDCL is one of the appointed service providers to offer rapid NAT for novel coronavirus disease 2019 (“COVID-19”) to passengers prior to departure from Hong Kong to Mainland China or Macau at the Shenzhen Bay Port and at the Hong Kong-Zhuhai-Macao Bridge Hong Kong Port under a new arrangement enacted by the Hong Kong Government

Research and commercialization of precision treatment technologies for hematological and solid tumors

l Shanghai Longyao received approval for initiating a stage I clinical trial (the “Trial”) on its investigational new drug (“IND”), namely LY007 Cellular Injection (“LY007 Injection”), from the National Medical Products Administration of China. Phase 1 clinical trial has commenced in the first quarter of 2022, and the first patient reinfusion was completed in April 2022

The Group's cancer treatment center project, utilizing the world's first government-approved boron neutron capture therapy (“BNCT”) technology, has secured the land rights of a designated site in Hainan Boao Lecheng International Medical Tourism Pilot Zone (“Pilot Zone”) for the setup and operation of the BNCT cancer treatment center, and the Group has entered into agreements for the purchase and installation of equipment as well as the supply of related drugs for rendering BNCT in the second quarter of 2022   

(Hong Kong, 15 August 2022) - China Biotech Services Holdings Limited (the "Group"; stock code: 8037.HK) has announced its interim results for the six months ended 30 June 2022 (“2022 1H” or the “2022 Interim Period”). During the 2022 Interim Period, as COVID-19 continues, the market demand for medical laboratory testing services and health check services remained high. The Group recorded a turnover of approximately HK$686,909,000, representing a year-on-year increase of approximately 83.6%. Gross profit margin stood at approximately 51.7% and net profit attributable to owners of the company rose by approximately 181.45% to HK$68,220,000 for the 2022 Interim Period.

Demand for NAT soared and demand for health check services and health related products increased significantly

SDCL, an indirect non-wholly-owned subsidiary of the Group, maintained its leading position in the provision of NAT services, with the number of testing samples completed surpassing 10 million. In December 2021, during the fifth wave of the COVID-19 pandemic, the Group provided NAT for COVID-19 for clients, ranging from private clinics, corporates, government offices and individuals, meeting the surge in demand for such services. In addition, the introduction of compulsory testing for high risk or high exposure groups of persons under regulation (in particular, the Prevention and Control of Disease (Compulsory Testing for Certain Persons) Regulation (Chapter 599J of the Laws of Hong Kong)) brought a support to the demand for NAT services. Moreover, under the new arrangement enacted by the Hong Kong government in March 2022, the Group was one of the appointed service providers to provide passengers with rapid NAT for COVID-19 prior to departure from Hong Kong to Mainland China or Macau at the Shenzhen Bay Port and at the Hong Kong-Zhuhai-Macao Bridge Hong Kong Port, which led to a significant increase in revenue during the 2022 Interim Period.

The Group continued to offer a wide spectrum of medical laboratory testing services and quality health check services. The turnover of this segment increased from approximately HK$362,783,000 for the six months ended 30 June 2021 (the “2021 Interim Period”) to approximately HK$460,906,000 for the 2022 Interim Period, representing a marked increase of 27.1%.

With respect to the manufacture and sale of health related and pharmaceutical products segment of the Group, turnover increased significantly from approximately HK$107,000 for the 2021 Interim Period to HK$215,402,000 for the 2022 Interim Period, representing an increase of over 2,000 times. This significant uplift was driven by the robust demand for rapid antigen test kits due to the outbreak of the fifth wave of COVID-19 during 2022 1H.

As for new business development, the formation of a joint venture between a subsidiary of the Group and a leading healthcare group in Hong Kong, namely, Sure Metro Limited (“SML”), a wholly-owned subsidiary of Town Health International Medical Group Limited (stock code: 3886), a company listed on the Hong Kong Stock Exchange, will result in complementary advantages for both parties by enriching the Group’s product portfolio and serving the entire medical market, allowing the Group to grow its business and expand its market share in the post-pandemic era in order to provide impetus for the long-term sustainable development of its testing business.

New breakthrough in tumor immune cell therapy service 

Shanghai Longyao Biotech Company Limited (“Shanghai Longyao”), an indirect non-wholly owned subsidiary of the Group, is engaged in tumor immune cell therapy, immune cell storage and health management services in China. The Trial of the first CD20-targeted IND, namely the LY007 Injection, began in the first quarter of 2022, and the first patient reinfusion was completed on 7 April 2022 by the Ruijin Hospital of Shanghai Jiao Tong University School of Medicine.

Commercialization of precision treatment technology for solid tumors

The Group’s BNCT cancer treatment center has been approved for entering into the Pilot Zone. This project will introduce the world’s first approved BNCT technology to provide patients with precision radiotherapy services. In the second quarter of 2022, the land rights of a designated site in the Pilot Zone have been secured for the setup and operation of the BNCT cancer treatment center, and the Group has entered into a sales contract, a memorandum of understanding and a service contract with Sumitomo Heavy Industries, Ltd. (“Sumitomo”) to purchase BNCT equipment and parts from Sumitomo, and to accept the technical advisory services to be provided by Sumitomo.  

Strategic Cooperation

The Group has entered into a strategic cooperation framework agreement with an operating entity controlled by Ping An Healthcare and Technology Company Limited (stock code: 1833) pursuant to contractual agreements. The scope of cooperation includes, but not limited to, areas relating to BNCT, innovative drugs, diagnostics services, overseas medical treatment and physical examinations.

Outlook

In the field of testing, the epidemic situation in Hong Kong will continue to bring in revenue for the Group’s COVID-19 testing business. The Group expects the demand for diagnostic and health checkup services to remain stable in the second half of 2022, while demand for self-paid NAT and other medical diagnostic services is expected to pick up upon the easing of immigration controls and quarantine requirements. The gradual resumption of normal lives will also help release pent demand for healthcare services.

The Group and Pillar Biosciences, a leading international precision testing technology development company, jointly established Asia Molecular Diagnostics Laboratory (“AMDL”), a high throughput sequencing innovation laboratory that is designed to conduct research and development and provide testing services. It is expected that the targeted opening of AMDL in the second half of 2022 will bring

another growth driver to the Group. The new molecular laboratory of AMDL is set to provide clients with the only FDA approved NGS-based cancer companion diagnostic test locally conducted in Hong Kong, which will help saving lives.

The Group has also been implementing the BNCT cancer treatment center project. The building and construction work of the project are expected to commence by the end of 2022, and the project is targeted for launch in 2025. Upon completion of the center, it will provide an advanced and effective treatment option for patients with solid tumors, hence bringing good news to cancer patients.

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About China Biotech Services Holdings (Stock Code: 8037.HK)

China Biotech Services Holdings Limited is listed on GEM of Hong Kong Stock Exchange and was included in MSCI Hong Kong Micro Cap Index in May 2018. The Group focuses on two main areas namely, precision diagnostics and cancer treatments.