China Cord Blood Corporation (NYSE:CO) Q4 2019 Earnings Conference Call - Final Transcript

Jun 19, 2019 • 08:00 am ET


China Cord Blood Corporation (NYSE:CO) Q4 2019 Earnings Conference Call - Final Transcript


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And welcome everyone to Global Cord Blood Corporation's Earnings Conference Call for the Fourth Quarter and Full Year Fiscal 2019. All participant lines will be placed on mute during the presentation. After which there will be a question and answer session.

(Operator Instructions) Now, I would like to introduce Ms. Kathy Bian VP of Corporate Finance to begin the presentation, please.

Kathy Bian

Thank you, Ray. Good morning, everyone. Welcome to our fourth quarter and full year of fiscal 2019 earnings conference call. A press release discussing our financial results has already been published and a copy is available on our Company's website. During the call, our management team will summarize operational developments and financial highlights for the quarter. A question-and-answer session will follow.

Before we begin, please note that today's discussion will contain forward looking statements that are subject to certain risks and uncertainties and actual results could be materially different from these forward-looking statements. Kindly refer to our SEC filings for detailed discussions of potential risks.

In the interest of time, we will begin with our CEO's remarks followed by a detailed report of our fourth quarter fiscal 2019 financials given by our CFO Mr. Albert Chen. Our management will be available to answer questions during the Q/A session. In view of recent developments, we understand investors and shareholders have various questions to ask. To give everyone a chance to ask questions, we'd appreciate if you could ask one question at a time.

Today, on behalf of our CEO, Tina, I will read her prepared remarks. Let's begin the presentation.

Good morning, shareholders, investors, ladies and gentlemen. Welcome to Global Cord Blood Corporation's Fiscal 2019 Fourth Quarter Earnings Conference Call. During the reporting quarter, we recruited 22,194 new subscribers, up by 3.8% year-over-year and down by 6.2% quarter-over-quarter.

During fiscal 2019, despite newborn numbers in China trending downwards, the Group managed to acquire 88,906 new subscribers, in line with our expectations. By March 31st, 2019, we had accumulated 750,273 subscribers in total, consolidating our leading position in the Global Cord Blood Banking industry.

In the beginning of 2016, the universal two-child policy was officially released and the families in China were allowed to bear two children instead of one child. By the end of 2018, the boosting effect from this policy had waned and the total newborn number in China recorded a year-over-year decrease. Under current demographic trends and fertility levels, we do not expect such momentum to change drastically.

However, as a result of urbanization, the population is still growing in certain areas, particularly in Guangdong province. Therefore, we expect that in fiscal 2020, Guangdong will still be the main driver of our growth. Zhejiang will maintain its contribution. Beijing will still be constrained by a decreasing population, and in particular, fewer women of child-bearing age. Therefore, we need to enhance our ability to recruit new clients and to cater to local client's needs to penetrate existing market. In addition, we increased our processing fee by RMB3,000 to RMB9,800 in