Gelonghui, May 10, 丨 China Resources Medical (01515.HK) announced that Huaiyin Hospital's business situation continued to decline and fall into losses due to the Group's announcement of impairment relating to Huai'an Huaiyin Hospital Co., Ltd. (“Huaiyin Hospital”), such as the company's 2022 and 2023 annual reports and the gradual loss of medical staff mentioned in the announcement, as well as changes in the external environment such as regional medical insurance resources and competition in the same industry. Although the Group has actively implemented many initiatives such as talent recruitment, business transformation, organizational restructuring, and cost reduction and efficiency, it has not been able to reverse the operating conditions of Huaiyin Hospital. After thorough research on the local medical market and further judging the current situation at Huaiyin Hospital, the company management believes that Huaiyin Hospital currently lacks business development opportunities and operating losses will continue for a long time. Compared with continuous operation, the discontinuation of Huaiyin Hospital is a choice that can minimize the company's losses and prevention and control project risks at this stage. Therefore, the company plans to apply to the industry supervisory department to stop operations of Huaiyin Hospital after approval, and implement the shutdown arrangement for Huaiyin Hospital's business after approval.
According to the company's assessment based on existing data, the shutdown of Huaiyin Hospital's business is expected to incur related one-time costs; in addition, it is expected that 2024 will result in non-cash costs due to depreciation or amortization of assets. The above matters will have a certain impact on the Group's business performance in 2024, but considering that Huaiyin Hospital is not expected to be able to reverse losses through operation for a long period of time, the company believes that the shutdown of Huaiyin Hospital's business will benefit the company's future business performance in the long run. At the same time, based on a comprehensive assessment of Huaiyin Hospital's revenue scale, number of patients treated, expert resources, etc., it is estimated that the shutdown of Huaiyin Hospital's business will have little impact on the Group's business development.
Currently, the company is studying plans to handle personnel and assets after the Huaiyin Hospital business is shut down, including considering selling the corresponding shares in Huaiyin Hospital or the assets of Huaiyin Hospital.