Global Cord Blood Corporation (NYSE:CO) Q2 2021 Earnings Conference Call - Final Transcript

Nov 25, 2020 • 08:00 am ET

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Global Cord Blood Corporation (NYSE:CO) Q2 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to Global Cord Blood Corporation's Earnings Conference Call for the Fiscal 2021 Second Quarter. [Operator Instructions] After which there will be a question-and-answer session. [Operator Instructions]

Now I would like to introduce Ms. Cathy Bai, Vice President of Corporate Finance to begin the presentation. Please Cathy Bai over to you.

Executive
Cathy Bai

Thank you, Sheen. Good morning, everyone. Welcome to our fiscal 2021 second quarter 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 corporate 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 report of our fiscal 2021 second quarter financials given by our CFO, Mr. Albert Chen. Our management will be available to answer questions during the Q&A session. 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 our presentation.

Executive
Zheng Ting, Tina

Good morning, ladies and gentlemen. Welcome to our second quarter fiscal 2021 earnings conference call. During this important quarter, the COVID-19 pandemic and the ongoing impact on consumer sentiments continue to affect our operations.

As the management team continues to adjust its sales and marketing tactics based on the changes in the field, the group managed to recruit 17,643 new subscribers this quarter, down by 18.1% year-over-year and up by 2.4% quarter-over-quarter, in line with management's expectations. By September 30, 2020, our accumulated subscriber base expanded to over 867,000.

During the second quarter, there was a noticeable decline in newborn numbers across Beijing, Guangdong and Zhejiang. Although, the magnitude of such declines varies across this different regions. In addition, anti-pandemic measures tend to vary from region to region. At some hospitals still adopted stricter entry and access [Phonetic] policy, which hindered our ability to reach potential clients.

Meanwhile, due to the COVID-19 impact household tends to prioritize spending related to pandemic prevention over other value-added healthcare services, which further hindered our client conversion assets. We also believe that consumer remain cautious as the rate of economic recovery has varied across industries and regions in China. Together these factors continue to weigh on our business operations.

That being said, now that we are nine months into the pandemic, consumers are slowly adapting to the new normal, and the extent and magnitude of the pandemic shock on consumer behavior has begun to fail. As restructuring improved our sales activities and consumer experience is offline, we have also expanded our online marketing efforts to reach a broader pool of potential consumers and intend to continue