Global Cord Blood Corporation Reports Financial Results for the Second Quarter and First Half of Fiscal 2020

HONG KONG, Nov. 26, 2019 /PRNewswire/ -- Global Cord Blood Corporation (NYSE: CO) ("GCBC" or the "Company"), China's leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services, today announced its unaudited financial results for the second quarter and first half of fiscal year 2020 ended September 30, 2019.

Second Quarter of Fiscal 2020 Highlights

    --  Revenues increased by 26.9% year over year ("YoY") to RMB313.5 million
        ($43.9 million).
    --  New subscribers and accumulated subscriber base were 21,551 and
        791,812([1]), respectively.
    --  Gross profit increased by 32.7% YoY to RMB265.1 million ($37.1 million).
    --  Gross margin increased from 80.9% in the prior year period to 84.6%.
    --  Operating income increased by 37.9% YoY to RMB144.4 million ($20.2
        million).
    --  Operating income before depreciation and amortization ("non-GAAP
        operating income([2])") increased by 32.8% YoY to RMB156.9 million
        ($22.0 million).
    --  Net income attributable to the Company's shareholders increased by 84.8%
        to RMB120.4 million ($16.8 million), as last year period recorded a
        significant decrease in fair value for equity securities
        ("mark-to-market loss") of RMB30.9 million compared to that of RMB7.0
        million ($1.0 million) in the reporting quarter.
    --  Net cash provided by operating activities was RMB208.3 million ($29.1
        million).

First Half of Fiscal 2020 Highlights

    --  Revenues increased by 22.0% YoY to RMB586.8 million ($82.1 million).
    --  New subscriber sign-up was 42,366, and accumulated subscriber base
        expanded to 791,812([1]).
    --  Gross profit increased by 26.2% YoY to RMB492.8 million ($68.9 million).
    --  Operating income increased by 28.3% YoY to RMB256.8 million ($35.9
        million).
    --  Non-GAAP operating income([2]) increased by 24.2% YoY to RMB281.7
        million ($39.4 million).
    --  Net income attributable to the Company's shareholders increased by 64.9%
        to RMB228.7 million ($32.0 million), mainly attributable to the increase
        in operating income and the significant decrease in mark-to-market loss
        in the reporting six months.
    --  Net cash provided by operating activities for the first half of fiscal
        2020 was RMB378.0 million ($52.9 million).

"Despite the prolonged cautious consumer sentiment in our markets fueled in part with slower economic growth in China, the US-China trade tensions, and our recent price adjustment, we managed to recruit 21,551 new subscribers in the second quarter, on track with our annual target." said Ms. Ting Zheng, Chairperson and Chief Executive Officer of GCBC. "With the Regulation of the People's Republic of China on the Administration of Human Genetic Resources coming into effect, we are evaluating its implications and other potential regulatory developments affecting our business. At the same time, we will continue to look for opportunities to broaden our revenue sources, and are prepared to adjust our strategy and market positioning to cope with any potential changes within the industry."



           
              Sum
              mary - Second Quarter and First Half Ended September 30, 2018 and 2019




                                                                                                   Three Months Ended September 30,                   Six Months Ended September 30,



                                                                                                     2018                                    2019        2018                                 2019




           
              (in thousands)                                            
            
              RMB                    
            
         RMB    
     
       US$                   
          
         RMB     
      
        RMB       
     
      US$





           Revenues                                                                              247,104                                 313,464      43,855                              480,925           586,839         82,102



           Gross Profit                                                                          199,841                                 265,149      37,095                              390,504           492,775         68,942



           Operating Income[3]                                                                   104,766                                 144,435      20,207                              200,208           256,821         35,930



           Change in Fair Value of



             Equity Securities                                                                  (30,945)                                (7,043)      (985)                            (40,266)            2,936            411



           Net Income Attributable to                                                             65,114                                 120,353      16,838                              138,656           228,697         31,996
      the Company's
      Shareholders



           Earnings per Ordinary



             Share (RMB/US$)



             - Basic                                                                                0.54                                    0.99        0.14                                 1.15              1.88           0.26



             - Diluted                                                                              0.53                                    0.99        0.14                                 1.14              1.88           0.26





           Revenues Breakdown (%)



           Processing Fees and Other



             Services                                                                              61.4%                                  63.9%                                          61.4%            62.7%



           Storage Fees                                                                            38.6%                                  36.1%                                          38.6%            37.3%





           New Subscribers (persons)                                                              22,908                                  21,551                                          43,509            42,366



           Total Accumulated                                                                     704,690                          
       791,812[1]                                        704,690     
      791,812[1]
      Subscribers (persons)







           
              Summary - Selected Cash Flow Statement Items




                                                                                                   Three Months Ended September 30,                   Six Months Ended September 30,



                                                                                                     2018                                    2019        2018                                 2019




           
              (in thousands)                                            
            
              RMB                    
            
         RMB    
     
       US$                   
          
         RMB     
      
        RMB       
     
      US$



           Net cash provided by



            operating activities                                                                 211,617                                 208,255      29,136                              386,934           378,011         52,886



           Net cash (used in)/



            provided by



            investing activities                                                                 (8,822)                                  1,396         195                             (15,948)          (5,229)         (732)



           Net cash used in



            financing activities                                                                (18,173)                                (4,039)      (565)                            (18,173)          (4,039)         (565)

Second Quarter of Fiscal 2020 Financial Results

REVENUES. Revenues increased by 26.9% YoY to RMB313.5 million ($43.9 million) in the second quarter of fiscal 2020. The increase was mainly driven by the implementation of a new processing fee since April 2019 as well as the Company's continued enlargement of its total subscriber base.

The Company recruited 21,551 new subscriber sign-ups during the reporting quarter. Revenues generated from processing fees and other services in the second quarter increased by 32.2% YoY to RMB200.5 million ($28.1 million), representing 63.9% of total revenues compared to 61.4% in the prior year period.

Revenues generated from storage fees increased by 18.4% YoY to RMB113.0 million ($15.8 million) in the reporting quarter. The accumulated subscriber base as of September 30, 2019 reached 791,812([1]).

GROSS PROFIT. Gross profit for the second quarter increased by 32.7% YoY to RMB265.1 million ($37.1 million). Gross margin improved to 84.6% from 80.9% in the prior year period, mainly driven by the increase in processing fees which exceeded the increase in labor related costs.

OPERATING INCOME. With the processing fee adjustment, operating income for the reporting quarter increased by 37.9% YoY to RMB144.4 million ($20.2 million). Operating margin increased to 46.1% from 42.4% of the prior year period. Depreciation and amortization expenses for the second quarter were RMB12.5 million ($1.7 million), compared to RMB13.4 million in the same period last year. Fueled by the topline growth, non-GAAP operating income([2]) increased by 32.8% YoY to RMB156.9 million ($22.0 million) in the reporting quarter.

Research and Development Expenses. Research and development expenses amounted to RMB6.4 million ($0.9 million) compared to RMB3.6 million in the prior year period, a reflection of the Company's continuous efforts to enhance operations through technology advancement.

Sales and Marketing Expenses. Sales and marketing expenses amounted to RMB64.9 million ($9.1 million) compared to RMB51.5 million in the prior year period. In order to mitigate the impact from the increased processing fee and encourage consumer spending on its services, the Company continued to strengthen its sales teams through new recruits and higher marketing and promotion spending. Sales and marketing expenses as a percentage of revenues was 20.7%, similar to 20.8% of the prior year period and down from 22.2% last quarter.

General and Administrative Expenses. As a result of the increase in staff costs, bad debt provision and legal and professional fees, general and administrative expenses amounted to RMB49.4 million ($6.9 million), compared to RMB40.0 million in the same period last year. General and administrative expenses as a percentage of revenues declined to 15.8% from 16.2% in the prior year period.

OTHER INCOME AND EXPENSES.

Change in fair value of equity securities. In the reporting period, the Company recognized a decrease in fair value of equity securities, or "mark-to-market loss", of RMB7.0 million ($1.0 million), compared to the mark-to-market loss of RMB30.9 million in the prior year period. The changes were mainly attributable to the investments in equity securities.

NET INCOME ATTRIBUTABLE TO THE COMPANY'S SHAREHOLDERS. As a result of an increase in operating income and a significant decrease in mark-to-market loss from equity securities, income before income tax for the second quarter increased by 77.8% YoY to RMB144.2 million ($20.2 million). Income tax expense for the second quarter was RMB22.1 million ($3.1 million). Net income attributable to the Company's shareholders for the reporting quarter increased by 84.8% YoY to RMB120.4 million ($16.8 million). Net margin for the reporting quarter improved to 38.4% from 26.4% in the prior year period.

EARNINGS PER SHARE. Basic and diluted earnings per ordinary share for the second quarter of fiscal 2020 was RMB0.99 ($0.14).

First Half of Fiscal 2020 Financial Results

For the first half of fiscal year 2020, total revenues increased by 22.0% YoY to RMB586.8 million ($82.1 million). The increase was mainly attributable to the new processing fee as well as an increase in the Company's storage fee revenues from its accumulated subscriber base. Revenues from processing fees and other services increased by 24.7% YoY to RMB368.0 million ($51.5 million), and revenues from storage fees increased by 17.7% YoY to RMB218.8 million ($30.6 million). Gross profit increased by 26.2% YoY to RMB492.8 million ($68.9 million). Operating income increased by 28.3% YoY to RMB256.8 million ($35.9 million). Non-GAAP operating income([2]) increased by 24.2% YoY to RMB281.7 million ($39.4 million). Net income attributable to the Company's shareholders improved by 64.9% to RMB228.7 million ($32.0 million). Basic and diluted earnings per ordinary share was RMB1.88 ($0.26). Net cash provided by operating activities in the first half of fiscal 2020 was RMB378.0 million ($52.9 million).

Recent Developments

    --  On June 4, 2019, the board of directors of the Company (the "Board")
        received a non-binding proposal letter from Cordlife Group Limited
        ("Cordlife"), a company listed on the Mainboard of the Singapore
        Exchange Securities Trading Limited ("SGX"), pursuant to which Cordlife
        proposes to combine the businesses of Cordlife and the Company, by way
        of a statutory merger. According to the letter, Cordlife would issue
        approximately 2,497.9 million ordinary shares at an issue price of
        SGD0.5 per ordinary share in exchange for all of the outstanding
        ordinary shares of the Company at $7.50 per ordinary share. Upon
        completion of the proposed transaction, the Company's ordinary shares
        will be delisted from the New York Stock Exchange and the Cordlife
        ordinary shares will continue to trade on SGX. On June 5, 2019, the
        Board formed a special committee of independent directors (the "Special
        Committee") who are not affiliated with Cordlife to evaluate such
        proposal. The Special Committee intends to retain advisors, including an
        independent financial advisor and U.S. and Cayman Islands legal
        counsels, to assist it in its work.On November 11, 2019, the Company
        appointed Mr. Jack Chow as an independent non-executive director of the
        Board. Mr. Chow has extensive professional experience and a broad
        network in the finance and investment industry and he replaced Mr. Mark
        Chen as a member of the Audit Committee and Ms. Jennifer Weng as a
        member of the Special Committee. Mr. Chow also joined the Board's
        Compensation Committee and Nominating and Corporate Governance
        Committee.
    --  The Company cautions its shareholders and others considering trading its
        ordinary shares that no decisions have been made with respect to the
        Company's response to the proposed transaction with Cordlife. The
        proposed transaction is still subject to various conditions, including
        but not limited to, completion of due diligence, parties entering into
        definitive agreement, and/or each of Cordlife and the Company obtaining
        its relevant regulatory and shareholders approval. In addition,
        litigation has been filed in the Cayman Islands challenging the proposed
        transaction. There can be no assurance that any definitive offer will be
        made, that any agreement will be executed or that this or any other
        transaction will be approved or consummated.

Conference Call

The Company will host a conference call at 8:00 a.m. ET on Wednesday, November 27, 2019, to discuss its financial performance and give a brief overview of the Company's recent developments, followed by a question and answer session. Interested parties can access the audio webcast through the Company's IR website at http://ir.globalcordbloodcorp.com. A replay of the webcast will be accessible two hours after the conference call and available for seven days at the same URL above. Listeners can also access the call by dialing 1-646-722-4977 or 1-855-824-5644 for US callers, or +852-3027-6500 for Hong Kong callers, access code: 13679679#.


                            [1] During the three months and
                             six months ended September 30,
                             2019, 21,551 and 42,366 new
                             subscribers were recruited,
                             respectively. The Company
                             reclassified 438 and 827 private
                             cord blood units as donated cord
                             blood units during the three
                             months and six months ended
                             September 30, 2019,
                             respectively, after the Company
                             determined that the
                             recoverability of these prior
                             private cord blood banking
                             subscribers was remote.
                             Therefore, the Company
                             terminated their subscription
                             services according to the
                             subscription contracts and these
                             units are being treated as if
                             they were donated cord blood
                             units and will be part of the
                             Company's non-current
                             inventories. Hence, the net
                             accumulated subscriber base was
                             791,812 as of September 30,
                             2019.


                            [2] See exhibit 3 to this press
                             release for a reconciliation of
                             non-GAAP operating income to
                             exclude the non-cash items
                             related to the depreciation and
                             amortization expenses to the
                             comparable financial measure
                             prepared in accordance with U.S.
                             generally accepted accounting
                             principles ("U.S. GAAP").


                            [3] The reported operating income
                             for the three months ended
                             September 30, 2018 and 2019
                             included depreciation and
                             amortization expenses related to
                             property, plant and equipment
                             and intangible assets of RMB13.4
                             million and RMB12.5 million
                             ($1.7 million), respectively.
                             The reported operating income
                             for the six months ended
                             September 30, 2018 and 2019
                             included depreciation and
                             amortization expenses related to
                             property, plant and equipment
                             and intangible assets of RMB26.5
                             million and RMB24.9 million
                             ($3.5 million), respectively.

Use of Non-GAAP Financial Measures

GAAP results for the three months and six months ended September 30, 2019, include non-cash items related to depreciation and amortization expenses. To supplement the Company's unaudited condensed consolidated financial statements presented on a U.S. GAAP basis, the Company has provided adjusted financial information excluding the impact of these items in this press release. The non-GAAP financial measure represents non-GAAP operating income. Such adjustment is a departure of U.S. GAAP; however, the Company's management believes that these adjusted measures provide investors with a better understanding of how the results relate to the Company's historical performance. Also, management uses non-GAAP operating income as a measurement tool for evaluating actual operating performance compared to budget and prior periods. These adjusted measures should not be considered an alternative to operating income, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. These measures are not necessarily comparable to a similarly titled measure of another company. A reconciliation of the adjustments to U.S. GAAP results appears in exhibit 3 accompanying this press release. This additional adjusted information is not meant to be considered in isolation or as a substitute for U.S. GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies.

About Global Cord Blood Corporation

Global Cord Blood Corporation is the first and largest umbilical cord blood banking operator in China in terms of geographical coverage and the only cord blood banking operator with multiple licenses. Under current PRC government regulations, only one licensed cord blood banking operator is permitted to operate in each licensed region and no new licenses will be granted before 2020 in addition to the seven licenses authorized as of today. Global Cord Blood Corporation provides cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services. For more information, please visit our website at http://www.globalcordbloodcorp.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company's future financial performance. The Company has attempted to identify forward-looking statements by terminology including "anticipates", "believes", "expects", "can", "continue", "could", "estimates", "intends", "may", "plans", "potential", "predict", "should" or "will" or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this press release is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this press release is issued, and the Company does not intend to update any of the forward-looking statements after the date this press release is issued to conform these statements to actual results, unless required by law.

The forward-looking statements included in this press release are subject to risks, uncertainties and assumptions about the Company's businesses and business environments. These statements reflect the Company's current views with respect to future events and are not a guarantee of future performance. Actual results of the Company's operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations regarding cord blood banking in the People's Republic of China, or PRC and any other jurisdiction in which the Company conducts its operations; changing legislation or regulatory environments in the PRC and any other jurisdiction in which the Company conducts its operations; the acceptance by subscribers of the Company's different pricing and payment options and reaction to the introduction of the Company's premium-quality pricing strategy; demographic trends in the regions of the PRC in which the Company is the exclusive licensed cord blood banking operator; labor and personnel relations; the existence of a significant shareholder able to influence and direct the corporate policies of the Company; credit risks affecting the Company's revenue and profitability; changes in the healthcare industry, including those which may result in the use of stem cell therapies becoming redundant or obsolete; the Company's ability to effectively manage its growth, including maintaining effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; the availability of capital resources, including in the form of capital markets financing opportunities, in light of industry developments affecting issuers that have pursued a "reverse merger" with an operating company based in China, the presence of a new majority shareholder, international pressure on trade and currency against the PRC and its potential impact on the PRC consumer behavior, as well as general economic conditions; the non-binding proposal letter from Cordlife and the potential transaction contemplated by such letter, and other relevant risks detailed in the Company's filings with the Securities and Exchange Commission in the United States.

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars as of and for the period ended September 30, 2019 were made at the noon buying rate of RMB7.1477 to $1.00 on September 30, 2019 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. Global Cord Blood Corporation makes no representation that the Renminbi or U.S. dollar amounts referred to in this press release could have been or could be converted into U.S. dollars or Renminbi, at any particular rate or at all.



              
                EXHIBIT 1


                                                                                                      
              
                GLOBAL CORD BLOOD CORPORATION


                                                                                             
              
                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                                         
              As of March 31 and September 30, 2019




                                                                                                                                                                 March 31,                          September 30,


                                                                                                                                                                      2019                                    2019


                                                                                                                                            
              
                RMB                       
       
          RMB           US$


                                                                                                                                                                 (in thousands except share data)



              
                ASSETS



              
                Current assets



              Cash and cash equivalents                                                                                                                         4,997,861                               5,368,285   751,050



              Accounts receivable, less allowance for doubtful accounts



                (March 31, 2019: RMB89,634; September 30, 2019:



                RMB106,504 (US$14,900))                                                                                                                            96,923                                  97,060    13,580



              Inventories                                                                                                                                          27,612                                  27,400     3,833



              Prepaid expenses and other receivables                                                                                                               25,532                                  19,340     2,706




              
                Total current assets                                                                                                                 5,147,928                               5,512,085   771,169



              Property, plant and equipment, net                                                                                                                  545,340                                 534,873    74,832



              Operating lease right-of-use assets[4]                                                                                                                    -                                  5,846       818



              Non-current deposits                                                                                                                                236,719                                 243,713    34,097



              Non-current accounts receivable, less allowance for doubtful



                accounts (March 31, 2019: RMB74,800; September 30,



                2019: RMB72,693 (US$10,170))                                                                                                                      104,857                                 123,291    17,249



              Inventories                                                                                                                                          77,194                                  80,253    11,228



              Intangible assets, net                                                                                                                               97,444                                  95,134    13,310



              Investment in equity securities at fair value                                                                                                       107,362                                 117,359    16,419



              Other equity investment                                                                                                                             189,129                                 189,129    26,460



              Deferred tax assets                                                                                                                                  44,981                                  49,469     6,921




              
                Total assets                                                                                                                         6,550,954                               6,951,152   972,503






              
                LIABILITIES



              
                Current liabilities



              Accounts payable                                                                                                                                     33,566                                  29,891     4,182



              Accrued expenses and other payables                                                                                                                  79,977                                 102,363    14,322



              Operating lease liabilities[4]                                                                                                                            -                                  2,149       301



              Deferred revenue                                                                                                                                    461,986                                 443,615    62,064



              Income tax payable                                                                                                                                   20,113                                  28,443     3,979




              
                Total current liabilities                                                                                                              595,642                                 606,461    84,848



              Non-current deferred revenue                                                                                                                      2,108,442                               2,211,652   309,421



              Non-current operating lease liabilities[4]                                                                                                                -                                  3,322       465



              Other non-current liabilities                                                                                                                       404,482                                 432,953    60,573



              Deferred tax liabilities                                                                                                                             19,626                                  18,854     2,638




              
                Total liabilities                                                                                                                    3,128,192                               3,273,242   457,945






              
                EQUITY



              
                Shareholders' equity of Global Cord Blood



              
                  Corporation



              Ordinary shares



              -  US$0.0001 par value, 250,000,000 shares authorized,



              121,687,974 and 121,551,075 shares issued and



              outstanding as of March 31 and September 30, 2019,



              respectively                                                                                                                                             83                                      83        12



              Additional paid-in capital                                                                                                                        2,101,582                               2,101,582   294,022



              Treasury stock, at cost (March 31 and September 30,



              2019: 136,899 shares, respectively)                                                                                                                 (2,815)                                (2,815)    (394)



              Accumulated other comprehensive losses                                                                                                             (88,738)                               (65,585)  (9,176)



              Retained earnings                                                                                                                                 1,407,223                               1,635,920   228,873




              
                Total equity attributable to Global Cord Blood



              
                  Corporation                                                                                                                        3,417,335                               3,669,185   513,337



              Non-controlling interests                                                                                                                             5,427                                   8,725     1,221




              
                Total equity                                                                                                                         3,422,762                               3,677,910   514,558




              
                Total liabilities and equity                                                                                                         6,550,954                               6,951,152   972,503






              
                [4] Since April 1, 2019, the Company adopted Accounting Standards Update Topic 842 using a modified retrospective transition
    approach which resulted in the recognition of right-of-use assets and lease liabilities for operating leases as of April 1, 2019 of
    approximately RMB6.9 million and RMB5.8 million, respectively.




              
                EXHIBIT 2


                                                                                  
              
                GLOBAL CORD BLOOD CORPORATION


                                                              
       
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF 
                COMPREHENSIVE 
              INCOME


                                                                     
              For the Three Months and Six Months Ended September 30, 2018 and 2019




                                                                         Three months ended September 30,                                                       Six months ended September 30,



                                                                        2018                                       2019                                     2018                                       2019



                                                                         RMB                                       RMB                                     US$                                       RMB          RMB          US$


                                                                
       
                (in thousands except per share data)





              Revenues                                              247,104                                    313,464                                   43,855                                    480,925       586,839        82,102



              Direct costs                                         (47,263)                                  (48,315)                                 (6,760)                                  (90,421)     (94,064)     (13,160)




              
                Gross profit                             199,841                                    265,149                                   37,095                                    390,504       492,775        68,942



              
                Operating expenses



              Research and development                              (3,590)                                   (6,399)                                   (895)                                   (6,381)     (11,100)      (1,553)



              Sales and marketing                                  (51,488)                                  (64,880)                                 (9,077)                                 (102,903)    (125,517)     (17,560)



              General and administrative                           (39,997)                                  (49,435)                                 (6,916)                                  (81,012)     (99,337)     (13,899)




              
                Total operating expenses                (95,075)                                 (120,714)                                (16,888)                                 (190,296)    (235,954)     (33,012)




              
                Operating income                         104,766                                    144,435                                   20,207                                    200,208       256,821        35,930




              
                Other (expenses)/income, net



              Interest income                                         6,405                                      6,502                                      910                                     12,103        12,722         1,780



              Foreign currency exchange losses                         (49)                                     (162)                                    (23)                                      (75)        (190)         (27)



              Change in fair value of equity                       (30,945)                                   (7,043)                                   (985)                                  (40,266)        2,936           411

                securities



              Dividend income                                           976                                                                                                                          976           507            71



              Others                                                   (56)                                       422                                       59                                      (815)          762           107




              
                Total other (expenses)/income,          (23,669)                                     (281)                                    (39)                                  (28,077)       16,737         2,342

              
              
                  net




              
                Income before income tax                  81,097                                    144,154                                   20,168                                    172,131       273,558        38,272



              Income tax expense                                   (14,921)                                  (22,087)                                 (3,090)                                  (31,445)     (41,563)      (5,815)




              
                Net income                                66,176                                    122,067                                   17,078                                    140,686       231,995        32,457



              Net income attributable to



              non-controlling interests                             (1,062)                                   (1,714)                                   (240)                                   (2,030)      (3,298)        (461)




              
                Net income attributable to



              
                Global Cord Blood Corporation's



              
                Shareholders                              65,114                                    120,353                                   16,838                                    138,656       228,697        31,996






              
                Earnings per share:



              Attributable to ordinary shares



              -  Basic                                                 0.54                                       0.99                                     0.14                                       1.15          1.88          0.26




              -  Diluted                                               0.53                                       0.99                                     0.14                                       1.14          1.88          0.26






              
                Other comprehensive income,
     net of nil income taxes



              -  Foreign currency translation



                adjustments                                          14,597                                     12,800                                    1,791                                     37,477        23,153         3,239




              
                Comprehensive income                      80,773                                    134,867                                   18,869                                    178,163       255,148        35,696






              Comprehensive income attributable to



              non-controlling interests                             (1,062)                                   (1,714)                                   (240)                                   (2,030)      (3,298)        (461)




              
                Comprehensive income



              
                attributable to Global Cord Blood



              
                Corporation's shareholders                79,711                                    133,153                                   18,629                                    176,133       251,850        35,235



     
                EXHIBIT 3


                                                                                          
              
                GLOBAL CORD BLOOD CORPORATION


                                                                                   
              
                RECONCILIATION OF NON-GAAP OPERATING INCOME


                                                                             
              For the Three Months and Six Months Ended September 30, 2018 and 2019




                                                              Three months ended                                                         Six months ended


                                                              September 30,                                                         September 30,



                                                             2018                                    2019                                    2018                2019



                                                              RMB                                    RMB                                    US$                RMB    RMB     US$


                                                      
              
                (in thousands)




      GAAP amount of operating



        income                                           104,766                                 144,435                                  20,207             200,208 256,821   35,930


      Depreciation and
       amortization


         expenses[5]                                       13,391                                  12,455                                   1,743              26,536  24,900    3,483



      Non-GAAP operating



        income                                           118,157                                 156,890                                  21,950             226,744 281,721   39,413






     
                [5] Depreciation and amortization expenses relate to property, plant and equipment and intangible assets respectively.

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SOURCE Global Cord Blood Corporation