Sinotrading Medical Acquires 60% Stake in Ewell HK for HK$20 Million to Expand Smart Healthcare Presence in Hong Kong, Macau, and Southeast Asia

On May 10, Sitrue Medical announced that itsThe wholly-owned subsidiary, Sichuang Hong Kong, contributed HK$6 million to acquire a 30% equity interest in Ewell HK and simultaneously subscribed for 3 million newly issued shares of Ewell HK in cash for HK$14 million. Upon completion of this transaction, Ewell HK’s total issued shares amounted to 7 million, with Sichuang Hong Kong holding a 60% equity stake in Ewell HK.

According to VCBeat, Ewell HK, established in 2009, is an integrator specializing in providing comprehensive healthcare solutions.Mainly in Hong Kong and Macaoand Southeast Asian markets, providing one-stop medical solutions, including medical software, IoT, and wireless networksArchitecture Development, is the company's partner for its smart healthcare business in Hong Kong, Macao, and Southeast Asia. Its professionalThe team has years of experience in implementing comprehensive solutions for the informatization construction of medical institutions.

The changes in the shareholding structure of Ewell HK before and after this investment are as follows: (Source: Announcement by Sicare Meditech)

As of March 31, 2017, the main unaudited financial data of Ewell HK are as follows:Total AssetsHK$3,345,578, net assets of HK$220,789, and operating revenue of HK$RMB 5,588,494, with a net profit of HKD 2,563,022.

In its first-quarter 2017 performance report, Sunwin Medical Information Technology Co., Ltd. reported a net profit attributable to shareholders of the parent company of RMB 34.0524 million, representing a year-on-year increase of 25.55%; operating revenue amounted to RMB 213 million, a year-on-year decrease of 2.42%; and basic earnings per share were RMB 0.08.

The company's revenue growth slowed slightly, falling short of expectations, while net profit growth met forecasts. The smart healthcare business continued to gain momentum, and the company's overall gross margin improved year-on-year. The primary reason for total revenue missing expectations was a slowdown in RFID orders. Meanwhile, the strong performance of the smart healthcare segment was also partly attributable to over RMB 10 million in VAT refunds on software products from Yihui Technology.

The company received new orders totaling RMB 207.5995 million in the first quarter, representing a year-on-year increase of 11.53%.Among them, the business intelligence segment recorded orders of RMB 168.3517 million, while smart healthcare products accounted for RMB 39.2478 million in orders.。

Furthermore, following the establishment of the Watson Joint Consultation Center at Zhejiang Provincial Hospital of Traditional Chinese Medicine in late 2016, which began offering external Watson for Oncology consultation services, Suncare Yihui, in collaboration with its equity-participated affiliates, established Watson for Oncology Joint Consultation Centers at Tianjin Third Central Hospital, Panyu District Cancer Research Institute, and Northern Jiangsu People’s Hospital in the first quarter of 2017. This expansion brought the total number of partner hospitals to four. The Watson for Oncology-assisted treatment model and the multidisciplinary team (MDT) consultation platform have gained market recognition and are progressing smoothly.

In light of the recent acquisition of shares in Ewell HK, on one hand, there is still significant room for growth in the proportion of revenue contributed by Suntrans Healthcare’s smart healthcare business.Hong Kong, Macao, and Southeast Asia boast a solid economic foundation, a healthcare IT market with significant growth potential, and distinct geographical advantages, making the region a highly feasible market for the implementation of smart healthcare services.

On the other hand, this acquisition,Conducive to enabling Ewell Medical Information Technology to further conduct in-depth research into the actual demands of clients in the Hong Kong and Macao Special Administrative Regions for smart healthcare,It is expected that smart healthcare products, including Watson for Oncology advisory services and Watson for Oncology assisted treatment, will be introduced to Hong Kong and Macao, thereby leveraging these regions as a platform to further expand business into Southeast Asia and other markets.