China increases budget for rural healthcare spending
August 01 2012 - 8:00AM
PR Newswire (Canada)
TSX-V: CHO OTCQX: CHLBF www.chinahealthlabs.com TORONTO,
Aug. 1, 2012 /CNW/ - China Health Labs & Diagnostics Ltd.
("China Health" or the "Company") is well positioned for growth as
China's central government continues to increase its investment and
annual budget for healthcare with an emphasis on moving towards
universal healthcare and improving rural healthcare. In 2010, a
total of 1,998 billion yuan ($320 billion dollars) was spent on
healthcare in China. In 2011, it is estimated that China spent
2,250 billion yuan ($360 billion dollars) on healthcare, being
healthcare expenditure per capita of 1,643 yuan ($263
dollars). While China has increased its healthcare spending,
it still spends far less per capita than developed countries such
as Canada and the USA which were estimated by The World Bank to
have per capita total healthcare spending of $5,222 and $8,362,
respectively, in 2010. Although significant improvements is
required for China's healthcare system to be comparable to
developed countries such as Canada and USA, China is committed to
improving its healthcare system significantly in the next few
years. For an example, in April 2009, the Chinese government
announced that it would earmark 850 billion yuan ($125 billion
dollars) in additional healthcare spending between 2009 and 2012 to
meet China's three-year health care reform program, which included:
providing 90% of the population with some basic coverage by end of
2011; building 30,000 hospitals, renovating 5,000 town hospitals,
3,700 community health centers and 11,000 community clinics over
the next ten years; and increasing access to prescription drugs by
building a list of essential medications for which the government
will increase subsidies for end users. A recent statistical report
from the Ministry of Health in China provided an update on the
status of healthcare improvements made from 2009 to 2011, showing
impressive progress including basic medical care insurance programs
that cover over 95 percent of China's population and completion of
an additional 1,688 hospitals and 5,552 community health centres.
Between 2009 and 2011, 63 billion yuan ($10 billion dollars) was
invested in the construction and improvement of 33,000 hospitals at
grass-roots levels and 451 billion yuan ($72 billion dollars) was
invested in medical care services. "China's move towards a
universal healthcare system and investments in improving rural
healthcare has supported the growth of our rural hospitals and
clinics business. Our network of rural diagnostic lab total
solutions ("BK Clinlabs") has increased from 86 BK Clinlabs in two
provinces in 2009 to 977 BK Clinlabs in nine provinces, installed
or under contract in 2012," said Wilson Yao, CEO of China Health.
"Our growth is also driven by the track record we have established
of providing a total diagnostic solution that delivers reliable and
efficient test results that enable rural hospitals to diagnose and
treat patients - based on our success to date we expect to increase
our coverage in the nine provinces where we have installed BK
Clinlabs and add new provinces." China Health's BK Clinlab total
diagnostic labs solution combines diagnostic laboratory equipment,
a proprietary lab management system, training and ongoing
maintenance and supply of reagents and consumables and has proven
its effectiveness in improving overall healthcare to citizens in
rural areas. With a potential of 90,000 rural hospitals and clinics
in China, the Company is working diligently in expanding its
network to new and current provinces in 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 defense and
rescue operations, the Beijing government and third-party
distributors. The Company intends to continue its growth 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 the Chinese defense and rescue operations, and
food safety solutions for large cities in China. In 2011,
China Health increased its revenues by 35% to $45.6 million, and
increased its installed base of BK Clinlabs from 210 at the start
of 2011 to 977 rural hospitals installed and contracted to
date. In addition, the Company grew revenues from its overall
total lab solutions business by 99% from 2010, which increased
gross margins to 44% in 2011 as compared to 39% in 2010. 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
expansion of the Company's installed base of BK Clinlabs in new and
current provinces and the growth 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 resources and ability to expand its
installed base, and that the Company will be able to grow 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 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
risk that the Company may not have the ability or resources to
expand its installed base, and the Company may not be able to grow
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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