Union Medical Expects To Boost Share Of Mainland Customers To 50% In A Year
Union Medical Healthcare, which operates clinics in Hong Kong and China, expects to boost its share of Chinese customers to 50% from the present 35% within a year, as it leverages its collaboration with Tencent Holdings’ digital health unit Tencent Doctorwork, according to its chief operating officer.
The company entered a strategic collaboration with Tencent Doctorwork earlier this year to set up 20 clinics. By digitizing patient records and service enhancements, it also aims to attract more customers in Hong Kong, Gabriel Lee said in an interview.
An increase in service offerings and growing presence in mainland China will help
Union Medical maintain this financial year’s growth rates at around the levels last year when profit grew 39% and revenue increased 36%, COO Lee said.
Union Medical posted a net profit of HK$279.2 million in the last financial year on revenue of HK$1.31 billion, more than half of which came from "aesthetic" medical services, traditional beauty services, health management services, and skincare and beauty products.
“We don’t see any reason for our growth to slow down, and we expect our revenue and profit growth to maintain pace at the same level,” Lee said.
Established in 2005 as an aesthetic healthcare provider, Union Medical has expanded its range of services over time through acquisitions. As of Mar. 31, it partnered with 64 registered practitioners including general practitioners, Chinese medicine practitioners, dentists, chiropractors, psychiatrists and anesthesiologists, and is planning to increase that number to 100 shortly, Lee said. The company operated a total of 54 clinics and service centers across Hong Kong and mainland China as of May 31.
Union Medical’s shares have outperformed the broader market this year, rising about 34.5% compared with the Hang Seng Index’s 9.2% retreat during the same period. They were up 1.2% as of 1:11 p.m. on Thursday, while the Hang Seng Index was 0.5% lower at 27,193.
Lee said the company’s capital expenditure is expected to peak at about HK$300 million in the current financial year as Union Medical is currently focused on opening two “specialist clinics” in Hong Kong by the end of this
fiscal year. Each of them will be about 10,000 square feet in size and be equipped with expensive machines, including those used for imaging purposes, that allow the company to offer a wider range of services.
Lee said while Union Medical’s margin on earnings before interest, tax, depreciation and amortization has reduced in recent years as the company made investments to
expand its business, the margin this year is expected to remain around last year’s level of 28%.
“We are now transforming into a one-stop medical service provider,” offering
specialized medical, general practice and aesthetic medical services, he said. “We do believe that considering our expansion plan, our current margin is at a healthy level at around 28%.”