Cost-Control Measures Prove Effective, while Diversified Services and Digital Transformation Drive Steady Growth

2024/25 Interim Results Highlights:

• Amid business environment challenges, the Group’s total revenue slightly decreased by 1.2% to HK$371.3 million.
• Profit attributable to shareholders increased by 14.6% year-on-year to over HK$17.9 million, showcasing strong profitability.
• Cost-saving measures and business diversification strategies proved effective, successfully boosting profits and balancing risks.
• The Group maintained a solid financial position and strong liquidity, with a current ratio of 1.77 and no bank borrowings or outstanding bank loans.
• The Board of Directors has proposed an interim dividend of HK1.40 cent per share, with a payout ratio of 62.2%.

UMP Healthcare Holdings Limited (“UMP” or the “Group”, Stock Code: 722.HK) announced its unaudited interim results for the six months ended 31 December 2024  (‘‘1H FY24/25’’ or the “Period”). Amid a challenging economic environment, the Group demonstrated solid financial performance by effectively controlling operating costs through the integration of internal resources and improved workforce allocation. At the same time, it steadily advanced business diversification and efficiency improvements, resulting in stable interim revenue. Profit attributable to shareholders increased by 14.6% year-on-year to over HK$17.9 million. By the end of the period, the Group’s overall cash balance continued to grow, reflecting ample profit margins and sufficient funds to navigate the uncertain economic landscape ahead.

Strong Profit Growth Through Strategic Cost Adjustments

During 1H FY24/25, UMP recorded revenue of over HK$371.3 million, a slight year-on-year decrease of 1.2%, while EBITDA increased by 17.0% year-on-year to approximately HK$46.6 million. This growth reflects the effectiveness of the Group's cost-saving measures, including improving operational processes, consolidating service locations to reduce rental expenses and operating costs, as well as streamlining and reallocating human resources. It also demonstrates the management's ability to flexibly allocate resources and execute operational efficiencies in an uncertain economic environment.

As of 31 December 2024, the Group's cash holdings increased by 18.4% to over HK$303.3 million, with a current ratio of 1.77 and no bank borrowings or outstanding bank loans, reflecting strong financial liquidity. The Group also expects to continue improving recurring costs during the current financial year, further strengthening its financial and profit position and providing sufficient funding support for future investments and acquisitions.

The interim return on equity (ROE) was 2.5%, with basic earnings per share of 2.25 Hong Kong cents. The Board of Directors has proposed an interim dividend of HK1.40 cent per share (1H FY23/24: HK1.30 cent), representing a payout ratio of approximately 62.2%.

Flexible Resource Allocation and Diversified Revenue Streams to Mitigate Risks

Facing challenges such as cautious consumer sentiment, intensified competition in  healthcare services within the area, and declining demand for overseas visa medical examinations, the Group’s outpatient revenue in Hong Kong and Macau saw a slight year-on-year decline of approximately 3.4% to HK$289.2 million. However, the stable or even growing performance of specialist, dental, and imaging services demonstrated the market's continued trust in the Group’s healthcare services.

To balance risks and expand revenue streams, the Group swiftly reallocated resources and repurposed facilities. More service elements, were introduced at service points in Central, Tsim Sha Tsui, and Jordan. The Group also actively pursued government projects to attract a broader customer base. These flexible adjustments, combined with enhanced patient workflow management and staff training, are expected to drive a return to business growth in the second half of the FY24/25.

During the period, the Group successfully secured several government tender contracts, including nurse clinics and physiotherapy services under the Chronic Disease Co-Care (“CDCC”) Pilot Scheme, as well as imaging and dental services for referrals from the Hospital Authority and civil servants. These government contracts provide a stable source of income.

Dr. Michael Sun, Vice Chairman and Co-CEO of UMP, stated, “Despite the uncertain broader economic environment, UMP remains vigilant on global and regional developments, including economic prospects, regulatory and policy changes, and shifts in consumer behavior. By staying agile and proactive, we can effectively address potential challenges and achieve sustainable growth. With increasing awareness of health during the post-pandemic era, the Group remains cautiously optimistic about the outlook for the healthcare industry. We are confident in our ability to continue creating value for patients, partners, and shareholders.”

In response to the growing demand for digital healthcare services, the Group is investing in a new patient management system, which will be rolled out in phases across all clinics over the next six months. This initiative aims to enhance the Group’s ability to securely and efficiently manage patient data, improve the overall patient experience, and optimize internal processes, hence contribute to cost savings and operational scalability. In imaging services, UMP has also introduced artificial intelligence to improve diagnostic efficiency and accuracy. The Group plans to explore more AI applications in other service areas in the future, further enhancing service quality and operational efficiency to create favorable conditions for future revenue growth.

Digital Transformation and AI Applications Enhancing Efficiency and Competitiveness

The corporate healthcare solutions segment remained unaffected by consumer sentiment and economic conditions, with contract service revenue growing by 4.1% year-on-year to HK$134.1 million. With the maturing healthcare market and increasing competition, demand for group and individual medical insurance continues to rise. During the reporting period, the  usage of contract medical vouchers on the Group’s services remained stable, underscoring the preference of network doctors for the UMP platform and solidifying the Group’s position as the preferred partner in the healthcare ecosystem.

Looking ahead, digital transformation will continue to be a key focus for the Group’s future contract services development. For example, the Hong Kong government’s promotion of the eHealth initiative reflects a broader trend toward digital medical records and integrated healthcare solutions. Jacquen Kwok, Executive Director and Co-CEO of UMP, commented, “Digital transformation is an inevitable shift in the healthcare industry. Electronic medical records enable doctors to make more accurate diagnoses and reduce the waste of medical resources. On a macro level, data management and analysis allow governments to formulate more effective public health policies and allocate medical resources more efficiently, while insurance companies can better assess risks and improve claims processes. UMP will actively participate in this transition, leveraging innovative technologies to enhance the Group’s overall service efficiency and strengthen collaboration with doctors, governments, and insurance companies to address future challenges together.”

The Group plans to continue investing in staff training, MedTech, system development and integration to ensure its team can master the latest digital tools and knowledge. Combined with AI applications, these efforts will improve service quality, enhance competitiveness, and achieve steady and sustainable growth in the long term.