One Patient, One Room, One Physician - One Baby, One Nurse - but not all black and white

Harmonicare: Still Waiting on That Baby Boom

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

Harmonicare's H1 results were consistent with the profit warning issued earlier this month:<ul>
<li>Revenue decreased by 1.7% Y/Y (including Heilongjiang HarMoniCare Hospital acquired on 31 Dec 2016)</li>
<li>Organic revenue -9.8% Y/Y
</li>
<li>Operating profit -59.4% Y/Y and net profit -71% Y/Y on 1) revenue shortfall 2) higher administrative expenses related to expansion projects and M&amp;A and 3) F/X loss of RMB8.1 million (versus RMB6.4 million gain LY). The F/X hit is smaller than we had estimated.</li>
</ul>The operating statistics…

Harmonicare's H1 results were consistent with the profit warning issued earlier this month:
Revenue decreased by 1.7% Y/Y (including Heilongjiang HarMoniCare Hospital acquired on 31 Dec 2016)
Organic revenue -9.8% Y/Y

Operating profit -59.4% Y/Y and net profit -71% Y/Y on 1) revenue shortfall 2) higher administrative expenses related to expansion projects and M&amp;A and 3) F/X loss of RMB8.1 million (versus RMB6.4 million gain LY). The F/X hit is smaller than we had estimated.
The operating statistics…

Harmonicare Medical

Continuing to Suffer from Weak Demand