China Health Labs & Diagnostics Ltd. provides update on rural hospital total lab solution business
December 13 2011 - 9:00AM
PR Newswire (Canada)
TSX-V: CHO OTCQX: CHLBF www.chinahealthlabs.com TORONTO,
Dec. 13, 2011 /CNW/ - China Health Labs & Diagnostics Ltd.
("China Health" or the "Company") is pleased to provide an update
regarding its rural hospital total diagnostic lab solution
business. Subsequent to the third quarter in 2011, China Health has
installed an additional 20 BK Clinlab total diagnostic lab
solutions (the "BK Clinlab") in rural hospitals located in Guizhou
Province, China, bringing the total to 34 labs in Guizhou
Province. After the completion of the Guizhou installations,
China Health has installed in total 817 BK Clinlabs in rural
hospitals and clinics in four provinces of China (Jilin, Henan,
Guizhou and Liaoning), compared to 210 locations at the end of
2010. China Health is now actively marketing its BK Clinlab
solution in 11 provinces of China, including the four provinces
where it has existing installations. The Company is in
the final stages of negotiating agreements to install 52 BK
Clinlabs in two Chinese provinces where it does not currently have
installed labs. Preparations for the construction and
installation of these labs have commenced, with installations
expected to be completed in 2011 or early 2012. In addition
to the Company's direct sales activities described above, Biosino
Bio-Technology and Science Inc. ("Biosino") has been allocated five
provinces in China where it will lead the marketing of the BK
Clinlab, pursuant to the Company's five year agreement with Biosino
previously announced in a press release dated November 7, 2011.
"After the successful installation of the 587 BK Clinlabs in Jilin,
we have seen increasing interest from our existing customers and in
provinces where we have been working hard to introduce our total
diagnostic lab solution," said Wilson Yao, Chairman and CEO of
China Health. "With our direct sales team and Biosino actively
marketing to 16 provinces in China, we expect to complete
additional installations in 2011, and be ready for another strong
year in 2012. We are very pleased to be providing a total
diagnostic lab solution that is helping the Chinese government
achieve one of its key healthcare policies of improving healthcare
in rural communities, while making strong returns for our
shareholders." As previously announced, China Health completed
installation of 587 BK Clinlabs in Jilin Province, China in August
2011. The Jilin installation was a major driver of revenue
and profit growth for the nine months ended September 30, 2011,
during which revenues from the total diagnostic lab solution for
rural hospital business grew by over 500 percent to $7.71 million
to account for 30% of Company's total revenues, compared to
revenues of $1.26 million, accounting for 7% of total revenues for
the same period in 2010. The growth of the total
diagnostic lab solution business for rural hospitals also
contributed to the increase in gross margin as a percentage of
revenues to 45% for the nine months ended September 30, 2011
compared to 32% for the same period in 2010. The Company
generates strong margins from this business due to the value
provided to customers by its proprietary lab management system and
diagnostic equipment produced in the Company's Beijing
manufacturing facility. The BK Clinlab was developed by China
Health as a total lab solution comprising diagnostic equipment,
hardware and software, installation and training and an ongoing
supply of reagents and service for use in rural hospitals and
clinics. The Company believes that this approach provides
added value to the rural hospitals and builds strong customer
loyalty compared with selling individual products. The BK
Clinlab total lab solution includes basic in-vitro diagnostic
testing equipment (and complementary reagents) such as haematology
analyzers, coagulation analyzers, urine analyzers, biochemistry
analyzers, and electrolyte analyzers are mostly produced at the
Company's Beijing manufacturing plant. China Health has
developed and patented the Lab Management System ("LMS"), a
proprietary computer hardware and software system that connects the
diagnostic equipment facilitating ease of operation, quality
control, management of patient information and monitoring of
reagent inventory. As part of the BK Clinlab, a network of
service centres staffed with trained technicians has and is being
set up to provide support to rural labs within the service area and
to provide a dependable source of reagents. As rural
diagnostic facilities in China are typically underserviced and
often lack even basic diagnostic capabilities, China Health
believes that it is uniquely positioned to capitalize on this
opportunity, as they are the first company in China to identify and
create a medical laboratory solution specifically tailored to
service the more than 50,000 rural hospitals throughout China.
About China Health Labs & Diagnostics Ltd. China Health,
operating in China as the Biochem Group, is a leading diagnostic
lab solution provider for the public healthcare industry in China.
The Company develops and sells Biochem Group branded and
third-party medical diagnostic products and services to diagnostic
facilities in China. Customers include large urban hospitals, rural
hospitals, Chinese military and rescue operations, the Beijing
government and third-party distributors. In 2010, China Health had
revenues of approximately $33.7 million, and intends to expand its
business by focusing its efforts on expanding its sales network in
three areas where it provides proprietary solutions, has limited
competition and which are supported by Chinese government policies
and budgets: BK Clinlab total lab solutions for rural hospitals and
clinics, POCT solutions for military and emergency rescue services,
and food safety solutions for large cities in China. Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION This press release contains
forward-looking statements and information that are based on the
beliefs of management and reflect China Health's current
expectations. When used in this press release, the words
"estimate", "project", "belief", "anticipate", "intend", "expect",
"plan", "predict", "may" or "should" and the negative of these
words or such variations thereon or comparable terminology are
intended to identify forward-looking statements and
information. The forward-looking statements and information
in this press release includes information relating to the
completion of the 52 BK Clinlabs installation in two Chinese
provinces, the marketing lead by Biosino in five Chinese provinces
and the expansion of the Company's business through its sales
network in areas where it has proprietary products, limited
competition and strong government support. The
forward-looking information is based on certain assumptions, which
could change materially in the future, including the assumption
that the Company will have the capacity to produce and install the
52 BK Clinlabs, the 52 BK Clinlabs will be installed in the two
Chinese provinces in 2011 or in early 2012, Biosino will lead the
marketing in the five Chinese provinces and the Company will be
able to expand its sales network and business. Such
statements and information reflect the current view of China Health
with respect to risks and uncertainties that may cause actual
results to differ materially from those contemplated in those
forward-looking statements and information. By their nature,
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the risks
that the Company may not have the capacity to produce the 52 BK
Clinlabs, the Company may not be able to install the 52 BK Clinlabs
on schedule or at all, Biosino may not lead the marketing of the BK
Clinlabs in the five Chinese provinces or perform some or all of
its obligations under its five-year agreement with the Company and
the Company may not expand its business as expected through its
sales network in any of the areas in which it has proprietary
products, limited competition and strong government support.
China Health cautions that the foregoing list of material factors
is not exhaustive. When relying on China Health's
forward-looking statements and information to make decisions,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. China
Health has assumed a certain progression, which may not be
realized. It has also assumed that the material factors
referred to above will not cause such forward-looking statements
and information to differ materially from actual results or
events. However, the list of these factors is not exhaustive
and is subject to change and there can be no assurance that such
assumptions will reflect the actual outcome of such items or
factors. THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS
RELEASE REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE
OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER
SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON
FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS
INFORMATION AS OF ANY OTHER DATE. WHILE CHINA HEALTH MAY
ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY
PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE
LAWS. CHINA HEALTH LABS & DIAGNOSTICS CONTACT: Judyanna
ChenChief Financial OfficerChina Health Labs & Diagnostics
Ltd.T: (416) 865-3351Email: jchen@chinahealthlabs.comBabak
PedramInvestor RelationsTMX Equicom GroupT: (416) 815-0700 ext.
264Email: bpedram@equicomgroup.com
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