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Zhongchao Medical releases financial results for fiscal year 2020

 Last Update: 2021-07-07
 Source: Internet
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Zhongchao Medical (NASDAQ transaction code: ZCMD) (referred to as "Zhongchao Medical" or "Company"), a company dedicated to providing online healthcare information, professional medical training and education services for Chinese medical workers and the general public, in Today announced its financial results for the fiscal year ending December 31, 2020
.

Summary of fiscal year 2020 year-on-year fiscal year 2019

		For the year ended December 31,
(Millions of dollars, except per share data)	2020		2019		% Variety
income		$17. 99		$14. 88		20. 9%
gross profit		$11. 87		$10. 23		16. 1%
Gross margin		66. 0%		68. 7%		-2. 7 pp
Operating profit	$4. 49		$3. 64		23. 3%
Operating profit margin		25. 0%		24. 5%		0. 5 pp
Net profit attributable to Zhongchao Medical	$4. 46		$4. 05		10. 2%
Earnings per share		$0. 183		$0. 187		-2. 6%
* pp: percentage point

In fiscal year 2020, revenue increased to US$17.
99 million, a year-on-year increase of 20.
9%.
The increase was mainly due to the continuous increase in service orders for the patient assistance project management business
.
Gross profit in fiscal year 2020 increased to 11.
87 million US dollars, a year-on-year increase of 16.
1%; while gross profit margin dropped by 2.
7 percentage points to 66.
0%
.
Operating profit in the 2020 fiscal year increased to 4.
49 million U.
S.
dollars, an increase of 23.
3% year-on-year.
This was mainly due to the increase in gross profit, which was partially offset by the increase in operating expenses
.
In fiscal 2020, net profit attributable to shareholders of the company increased to 4.
46 million U.
S.
dollars, a year-on-year increase of 10.
2%.
This was mainly due to the increase in operating income, which was partially offset by the increase in income tax expenses
.
Earnings per share in fiscal 2020 fell to US$0.
183, a 2.
6% decrease from US$0.
187 in fiscal 2019
.

Mr.
Yang Weiguang, Chairman and CEO of Zhongchao Medical, commented, “Revenue increased by 20.
9% and hit a record of US$17.
99 million.
At the same time, operating profit increased by 23.
3% to US$4.
49 million.
Our financial performance for the fiscal year 2020 highlights our Continued strong business
.

Although our gross profit margin has declined slightly, due to our reputation for designing and producing high-quality professional content in pharmaceutical companies and sub-profit organizations, we expect to maintain high profit margins in the future

Financial results for fiscal year 2020

income

In fiscal year 2020, revenue increased by US$3.

11 million to US$17.

cost

Costs in fiscal year 2020 increased by US$1.
46 million to US$6.
12 million, an increase of 31.
4% from US$4.
66 million in fiscal year 2019
.

The increase in cost is due to the increase in professional service fees and outsourcing labor costs for patient assistance projects

Gross profit

Gross profit in fiscal year 2020 increased by USD 1.
65 million to USD 11.
87 million, an increase of 16.
1% from USD 10.
23 million in fiscal year 2019
.

The gross profit margin in fiscal year 2020 decreased by 2.
7 percentage points to 66.
0%, while the gross profit margin in fiscal year 2019 was 68.
7%
.

Operating expenses

Marketing expenses in fiscal year 2020 were US$3.
44 million, an increase of US$130,000 from US$3.
2 million in fiscal year 2019, a year-on-year increase of 7.
7%
.

The increase in marketing expenses was mainly due to the increased advertising expenses to increase reputation in the medical and health industry, as well as the additional salaries and benefits of marketing staff

General and administrative expenses for fiscal year 2020 were US$3.
12 million, an increase of US$600,000 from US$2.
52 million in fiscal year 2019, a year-on-year increase of 23.
8%
.

The increase in general and administrative expenses was mainly due to the salary and benefits of newly added auxiliary functions; the increase in professional expenses since the company’s listing in February 2020; and the increase in the offsetting of bad debts in accounts receivable in accordance with the bad debt policy

The R&D expenses in fiscal year 2020 were US$820,000, a decrease of US$50,000 from the US$860,000 in fiscal year 2019, and a year-on-year decrease of 5.
5%
.

R&D expenses accounted for 4.

The total operating expenses in fiscal year 2020 reached 7.
38 million U.
S.
dollars, an increase of 800,000 U.
S.
dollars from the 6.
58 million U.
S.
dollars in fiscal year 2019, a year-on-year increase of 12.
1%
.

The increase in total operating expenses was mainly attributable to the increase in marketing expenses and general and administrative expenses, while part of the increase was offset by the decrease in research and development expenses

Operating profit

Operating profit for the 2020 fiscal year was 4.
49 million U.
S.
dollars, an increase of 850,000 U.
S.
dollars from the 2019 fiscal year of 3.
64 million U.
S.
dollars, a year-on-year increase of 23.
3%
.

The increase in operating profit was mainly attributable to the increase in gross profit, which was partially offset by the increase in operating expenses

The operating margin in fiscal 2020 increased by 0.
5 percentage points to 25.
0%, while the operating margin in fiscal 2019 was 24.
5%
.

Interest and other income, net

Interest income for fiscal year 2020 was US$150,000, a decrease of US$70,000 from US$210,000 in fiscal year 2019, and a year-on-year decrease of 30.
5%
.

Other income for fiscal year 2020 is US$310,000, mainly including government subsidies
.
Other income for fiscal year 2019 was $530,000
.

profit before tax

Pre-tax profit for fiscal year 2020 was US$4.
94 million, an increase of US$550,000 from US$4.
39 million in fiscal year 2019, a year-on-year increase of 12.
6%
.
The increase in profit before tax was mainly attributable to the increase in operating profit, which was partially offset by the decrease in interest and other income
.

The income tax in fiscal year 2020 was US$490,000, an increase of US$100,000 from the US$390,000 in fiscal year 2019, a year-on-year increase of 25.
2%
.

Net profit and earnings per share

Net profit in fiscal year 2020 was US$4.
46 million, an increase of US$460,000 compared with US$4 million in fiscal year 2019, an increase of 11.
4% year-on-year
.
The increase in net income was mainly due to the increase in operating profit, which was partially offset by the increase in income tax
.

The net profit margin in fiscal year 2020 fell by 2.
1 percentage points to 24.
8%, compared with 26.
9% in fiscal year 2019
.

After deducting non-controlling interests, the net profit attributable to the company’s shareholders in fiscal 2020 was US$4.
46 million, an increase of US$410,000 compared to US$4.
05 million in fiscal 2019, a year-on-year increase of 10.
2%
.

Basic and amortized earnings per share for the 2020 fiscal year were $0.
183, compared to $0.
187 for the 2019 fiscal year
.
The weighted average number of shares outstanding in fiscal year 2020 is 24,425,637 shares, compared with 21,600,135 shares in fiscal year 2019
.

Financial status

As of December 31, 2020, the company's cash and cash equivalents were USD 15.
07 million, compared to USD 7.
83 million as of December 31, 2019
.
As of December 31, 2020, accounts receivable were USD 10.
32 million, compared to USD 5.
08 million as of December 31, 2019
.
As of December 31, 2020, working capital was USD 26.
61 million, compared to USD 12.
15 million as of December 2019
.

The net cash used in operating activities in fiscal 2020 was US$1.
04 million, while the net cash provided by operating activities in fiscal 2019 was US$1.
41 million
.
Net cash used in investment activities in fiscal 2020 was US$4.
00 million, compared with US$200,000 in fiscal 2019
.
The net cash provided by financing activities in fiscal year 2020 was US$11.
5 million, while the net cash used in financing activities in fiscal year 2019 was US$1.
19 million
.

Highlights of the company's recent business

In March 2021, the company announced that it would renew the contract with the China Association for Health Promotion and Education and GlaxoSmithKline (China) Investment Co.
, Ltd.
in 2021, and continue to cooperate in the medical education project of "Pulmonary Hypertension Online Course-Famous Academy Link"
.

In January 2021, the company announced that it would cooperate with the China Association for Health Promotion and Education and the Liver Cancer Professional Committee of the China Anti-Cancer Association to successfully hold the China Liver Cancer Standardization Action-National Academic Annual Conference
.

In November 2020, the company announced the expansion of the current cooperative service scope with five subsidiaries of Takeda Pharmaceutical Co.
, Ltd.
in China
.
Zhongchao Medical will continue to serve as Takeda's supplier and partner in China in the future, providing Takeda with a wide range of services such as course production, patient education and doctor education
.

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