Chindex International, Inc. lays out Chinese expansion plans
On a midday Wednesday earnings conference call, executives of healthcare services provider Chindex International, Inc. (Nasdaq: CHDX) emphasized growth prospects in China for the Bethesda, Md.-based company.
“Our improved performance, our well-developed brand recognition and mature management team puts us in an excellent position to reap the benefits of the accelerating growth in the China healthcare market,” CEO Roberta Lipson said on the call. “We’re in a position to capitalize on the opportunities for comprehensive hospital supply chain business solutions.”
Chindex is implementing a two-phase expansion plan into the southern Chinese city of Guangzhou, Lipson said. The first phase, which involves an outpatient clinic, is expected to be completed during the current calendar year. The second phase involving a large hospital is not projected to be completed until 2008. Additionally, the company recently installed surgical robot systems in hospitals in Beijing and Shanghai, Lipson said.
“While it’s impossible to say how the big the market for [surgical robot systems] will be over time, it’s clear that since China has adopted and enthusiastically embraced revolutionary medical technologies in the past, this revolutionary system will continue to gain popularity for some time to come,” Lipson said.
Before the start of trading on Wednesday, Chindex reported annual revenue of $105.9 million for fiscal 2007, compared with $90.84 million in the prior year. The company recorded annual profit of $3 million, up from $0.1 million in fiscal 2006.
“Our overall performance for fiscal 2007 was excellent,” Lipson said.
During the year, the company’s healthcare services division “more than exceeded” expectations, but the medical products unit fell short, Lipson said.
“We’re expecting improved performance in the medical products division in the future,” she said.
Chindex is also benefiting from so-called medical tourism, where healthcare services are sought and delivered outside the customer’s native land. In China, Lipson said Chindex has had customers from northern Asia, Mongolia, eastern Russia and Kazakhstan.
“I can’t say the [medical tourism] numbers are overwhelming but it is a nice source of revenue and we see a continuation of that business,” Lipson said.
Before Wednesday’s opening bell, Chindex reported revenue of $24.7 million for the fourth quarter ended March 31, up 6% from $23.3 million in the year-ago period. The company recorded a profit of $0.6 million, or $0.09 a share, compared with a loss of $0.3 million, or $0.06 per share, a year earlier. Chindex beat Wall Street expectations of a $0.04 profit per share on $27.9 million in revenue.
Lipson said Chindex will submit its annual report with the SEC on Thursday.
In midday trading, Chindex shares are down 1.47% at $22.13.
