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China Cord Blood Corporation Reports Financial Results for the Second Quarter and First Half of Fiscal 2018

HONG KONG, Nov. 20, 2017 /PRNewswire/ -- China Cord Blood Corporation (NYSE: CO) ("CCBC" 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 2018 ended September 30, 2017.

Second Quarter of Fiscal 2018 Highlights

  • Revenues for the second quarter of fiscal 2018 increased by 27.4% to RMB234.6 million ($35.3 million) from RMB184.1 million in the prior year period.
  • New subscribers and accumulated subscriber base were 23,647 and 620,6801, respectively.
  • Gross profit increased by 30.2% to RMB188.9 million ($28.4 million) from RMB145.1 million in the prior year period.
  • Gross margin increased to 80.5% from 78.8% in the prior year period.
  • Operating income increased by 39.4% to RMB76.3 million ($11.5 million) from RMB54.7 million in the prior year period.
  • Operating income before depreciation and amortization and share-based compensation expenses was RMB108.7 million ($16.3 million), up 31.2% from RMB82.9 million in the prior year period.2
  • Net income attributable to the Company's shareholders improved to RMB67.6 million ($10.2 million) from RMB16.6 million in the prior year period as no interest expense was recorded during this quarter.
  • Net cash provided by operating activities for the second quarter of fiscal 2018 increased to RMB215.3 million ($32.4 million) from RMB136.3 million in the prior year period.

First Half of Fiscal 2018 Highlights

  • Revenues for the first half of fiscal 2018 increased by 28.5% to RMB458.8 million ($69.0 million) from RMB357.1 million in the prior year period.
  • New subscriber sign-ups reached 46,170, and accumulated subscriber base expanded to 620,6801.
  • Gross profit increased by 31.3% to RMB368.4 million ($55.4 million) from RMB280.6 million in the prior year period.
  • Operating income increased by 49.0% to RMB159.3 million ($23.9 million) from RMB106.9 million in the prior year period.
  • Operating income before depreciation and amortization and share-based compensation expenses increased to RMB201.0 million ($30.2 million), or 23.6% year-over-year, from RMB162.6 million in the prior year period.2
  • Net income attributable to the Company's shareholders increased materially to RMB136.7 million ($20.6 million) from RMB32.4 million in the prior year period.
  • Net cash provided by operating activities for the first half of fiscal 2018 increased significantly to RMB441.7 million ($66.4 million) from RMB267.3 million in the prior year period.

"We are pleased with our growth in the second quarter, highlighted by the number of new subscribers reaching 23,647, which demonstrates the effectiveness of the tactics we adopted to fine-tune front line sales and nurture our markets. As the Guangdong division continues to display strong growth momentum, the Zhejiang market continues to ramp up and the Beijing market maintains a steady pace of growth, we are prudently optimistic about this year's prospect," said Ms. Ting Zheng, Chief Executive Officer of China Cord Blood Corporation. "While keeping our focus on the organic growth of our core business, we will also actively explore potential investment opportunities to build multiple revenue sources and boost profit growth as new challenges emerge to maintain our position as the industry leader."

Summary -- Second Quarter and First Half Ended September 30, 2016 and 2017






Three Months Ended September 30,


Six Months Ended September30,



2016


2017


2016


2017

(in thousands)


RMB


RMB


US$


RMB


RMB


US$














Revenues


184,140


234,572


35,257


357,092


458,794


68,958

Gross Profit


145,052


188,928


28,397


280,571


368,368


55,366

Operating Income3


54,744


76,328


11,472


106,879


159,289


23,942

Interest Expense


(29,801)


-


-


(58,634)


(3,257)


(490)

Net Income Attributable to
the Company's
Shareholders


16,641


67,595


10,160


32,363


136,730


20,551

Earnings per Share
-- Basic and Diluted4
(RMB/US$)


0.22


0.60


0.09


0.44


1.22


0.18

Revenues Breakdown (%)













Processing Fees


62.5%


65.7%




62.2%


65.6%



Storage Fees


37.5%


34.3%




37.8%


34.4%
















New Subscribers (persons)


18,037


23,647




34,674


46,170



Total Accumulated
Subscribers (persons)


536,877


620,6801




536,877


620,6801




Summary -- Selected Cash Flow Statement Items






Three Months Ended September 30,



Six Months Ended September 30,



2016


2017


2016


2017

(in thousands)


RMB


RMB


US$


RMB


RMB


US$














Net cash provided by

operating activities


136,277


215,293


32,359


267,291


441,710


66,390

Net cash used in

investing activities


(5,151)


(11,354)


(1,706)


(84,280)


(22,017)


(3,309)

Net cash used in

financing activities


(60,000)


-


-


(60,000)


-


-

Second Quarter of Fiscal 2018 Financial Results

REVENUES. Revenues increased by 27.4% to RMB234.6 million ($35.3 million) in the second quarter of fiscal 2018 from RMB184.1 million in the prior year period. The increase was mainly driven by the strong growth in new subscribers and the Company's enlarged total subscriber base.

Revenues generated from processing fees and other services in the second quarter of fiscal 2018 increased by 33.9% to RMB154.1 million ($23.2 million) from RMB115.1 million in the prior year period. 23,647 new subscriber sign-ups were recorded during the reporting quarter compared to 18,037 new subscribers in the prior year period. Revenues generated from processing fees accounted for 65.7% of total revenues compared to 62.5% in the prior year period.

Revenues generated from storage fees increased by 16.7% to RMB80.5 million ($12.1 million) in the second quarter of fiscal 2018 from RMB69.0 million in the prior year period. The accumulated subscriber base as of September 30, 2017 was 620,6801. Storage fee revenues accounted for 34.3% of total revenues compared to 37.5% in the prior year period.

GROSS PROFIT. Gross profit for the second quarter of fiscal 2018 increased to RMB188.9 million ($28.4 million), a 30.2% increase from RMB145.1 million in the prior year period. Benefiting from economies of scale, gross margin was 80.5%, up from 78.8% in the prior year period.

OPERATING INCOME. Operating income increased by 39.4% to RMB76.3 million ($11.5 million). The increase in sales and marketing expenses was reduced by slower growth in general and administrative expenses which resulted in operating margin expansion from 29.7% to 32.5%. Depreciation and amortization expenses for the quarter amounted to RMB12.4 million ($1.9 million), similar to the same period last year. Share-based compensation expense for the second quarter amounted to RMB20.1 million ($3.0 million) as compared to RMB15.5 million in the prior year period. Various sales and marketing expenses, excluding sales and marketing related share-based compensation expense, experienced an increase from the prior year period. As a result, operating income before depreciation and amortization and share-based compensation expense grew at a flatter pace of 31.2% to RMB108.7 million ($16.3 million).2

Research and Development Expenses. Research and development expenses was RMB3.7 million ($0.6 million) in the second quarter of fiscal 2018 compared to RMB2.4 million in the prior year period.

Sales and Marketing Expenses. Sales and marketing expenses amounted to RMB56.2 million ($8.4 million), as compared to RMB39.6 million in the prior year period. During the quarter, the Company continued to motivate its front line sales forces by stepping up performance incentives while escalating marketing and promotion activities. As a result, staff costs and promotion expenses continued to rise. However, sales and marketing expenses as a percentage of revenues were kept in check at 23.9%, which was similar to the fiscal year 2017 full-year average.

General and Administrative Expenses. During the reporting quarter, the Company continued to closely monitor its general and administrative expenses. As a result, general and administrative expenses as a percentage of revenues declined from 26.2% during the same quarter last year to 22.5% in the reporting quarter. In nominal value, general and administrative expenses increased from RMB48.3 million in the same period last year to RMB52.8 million ($7.9 million), and the increase was mainly driven by an increase in share-based compensation expense.

NET INCOME ATTRIBUTABLE TO THE COMPANY'S SHAREHOLDERS. As a result of an increase in operating income and the absence of interest expense, income before income tax for the second quarter of fiscal 2018 increased significantly to RMB83.2 million ($12.5 million) from RMB29.9 million in the prior year period. Income tax expense for the second quarter was RMB14.5 million ($2.2 million) compared to RMB12.6 million in the prior year period. Net income attributable to the Company's shareholders for the second quarter increased to RMB67.6 million ($10.2 million) from RMB16.6 million in the prior year period. Net margin for the second quarter of fiscal 2018 improved materially to 28.8% from 9.0% in the prior year period.

EARNINGS PER SHARE. Basic and diluted earnings per ordinary share for the second quarter of fiscal 2018 improved to RMB0.60 ($0.09)4 from RMB0.22 in the prior year period.

LIQUIDITY. As of September 30, 2017, the Company had cash and cash equivalents of RMB3,927.3 million ($590.3 million) with aggregate current and non-current deferred revenues amounting to RMB2,103.4 million ($316.1 million). Net cash provided by operating activities for the second quarter of fiscal 2018 increased to RMB215.3 million ($32.4 million) from RMB136.3 million in the prior year period, when an interest payment was made to the Company's convertible note holder.

First Half of Fiscal 2018 Financial Results

For the first half of fiscal year 2018, total revenues increased by 28.5% to RMB458.8 million ($69.0 million) from RMB357.1 million in the prior year period. The increase was largely attributable to an increase in the Company's processing fees revenues from new subscribers. Revenues from processing fees and storage fees grew by 35.6% and 16.8%, respectively. Gross profit increased by 31.3% to RMB368.4 million ($55.4 million) from RMB280.6 million in the prior year period. Operating income increased significantly by 49.0% to RMB159.3 million ($23.9 million) from RMB106.9 million in the prior year period. Operating income before depreciation and amortization and share-based compensation expenses totaled RMB201.0 million ($30.2 million), up 23.6% from RMB162.6 million in the prior year period.2 Net income attributable to the Company's shareholders improved to RMB136.7 million ($20.6 million) from RMB32.4 million in the prior year period. Basic and diluted earnings per share attributable to ordinary shares increased materially to RMB1.22 ($0.18) from RMB0.44 in the prior year period. Net cash provided by operating activities in the first half of fiscal 2018 increased to RMB441.7 million ($66.4 million) from RMB267.3 million in the prior year period.

Conference Call

The Company will host a conference call at 8:00 a.m. ET on Tuesday, November 21, 2017 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.chinacordbloodcorp.com. A replay of the webcast will be accessible two hours after the conference call and available for three weeks at the same URL above. Listeners can also access the call by dialing 1-720-452-9217 or 1-800-289-0438 for US callers, or +852-3008-1527 for Hong Kong callers, access code: 1974053.

1 During the three months and six months ended September 30, 2017, 23,647 and 46,170 new subscribers were recruited, respectively. The Company reclassified 142 and 530 private cord blood units as donated cord blood units during the three months and six months ended September 30, 2017 after the Company determined that the recoverability of these prior private cord blood banking subscribers was low. 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 620,680 as of September 30, 2017.


2 See exhibit 3 of this press release for a reconciliation of operating income to exclude the non-cash items related to the depreciation and amortization and share-based compensation 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 and six months ended September 30, 2016 and 2017included the following:

(i)

Depreciation and amortization expenses for the three months ended September 30, 2016 and 2017 were RMB12.6 million and RMB12.4 million ($1.9 million). Depreciation and amortization expenses for the six months ended September 30, 2016 and 2017 were RMB25.1 million and RMB25.1 million ($3.8 million); and

(ii)



As of September 30, 2017, a total of 7,300,000 restricted share units ("RSUs") were issued and outstanding under the Company's RSU scheme, subject to certain performance conditions. Share-based compensation expenses related to this RSU scheme were RMB15.5 million and RMB20.1 million ($3.0 million) for the three months ended September 30, 2016 and 2017. Share-based compensation expenses related to this RSU scheme were RMB30.6 million and RMB16.6 million ($2.5 million) for the six months ended September 30, 2016 and 2017.


4 Out of 7,300,000 RSUs issued and outstanding as of September 30, 2017, 7,080,000 ordinary shares ("Shares") were issued and deposited into a trust sponsored and funded by the Company ("Trust"), and will be transferred to respective executives, directors and key employees (or their designated nominees) under the Company's RSU scheme when the performance conditions are met. The Trust facilitates the granting (and subsequent vesting) of incentive RSUs and holds such Shares for the benefit of such executives, directors and key employees as a class. Taking into account of such Shares, in addition to 113,524,742 outstanding shares (73,003,248 outstanding shares for the three and six months ended September 30, 2016), basic and diluted earnings per ordinary share would be RMB0.20 and RMB0.56 ($0.08) for the three months ended September 30, 2016 and 2017, basic and diluted earnings per ordinary share would be RMB0.40 and RMB1.15 ($0.17) for the six months ended September 30, 2016 and 2017, respectively.

Use of Non-GAAP Financial Measures

GAAP results for the three months and six months ended September 30, 2017 include non-cash items related to the depreciation and amortization and share-based compensation 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 China Cord Blood Corporation

China 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. China 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.chinacordbloodcorp.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 (including the relaxation of China's one child policy) 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, as well as general economic conditions; the proposed transactions between an affiliate of Golden Meditech Holdings Limited and Nanjing Ying Peng Hui Kang Medical Industry Investment Partnership (limited partnership); 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 periods ending September 30, 2017 were made at the noon buying rate of RMB6.6533 to $1.00 on September 29, 2017 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. China 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.

For more information, please contact:

China Cord Blood Corporation
Investor Relations Department
Tel: (+852) 3605-8180
Email: ir@chinacordbloodcorp.com

ICR, Inc.
William Zima
Tel: (+86) 10-6583-7511
U.S. Tel: (646) 405-5185
Email: William.zima@icrinc.com

EXHIBIT 1

CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31 and September 30, 2017




March 31,


September 30,



2017


2017



RMB


RMB


US$





(in thousands except share data)




ASSETS







Current assets







Cash and cash equivalents

3,510,264


3,927,280


590,276


Accounts receivable, less allowance for doubtful accounts







(March 31, 2017: RMB46,858; September 30, 2017:







RMB56,829 (US$8,541))

112,533


111,697


16,789


Inventories

30,987


38,756


5,825


Prepayments and other receivables - Third parties

17,524


22,576


3,394


Prepayments and other receivables - Related parties

-


2,284


343


Total current assets

3,671,308


4,102,593


616,627


Property, plant and equipment, net

551,434


541,612


81,405


Non-current deposits - Third parties

237,487


236,903


35,607


Non-current deposits - Related party

-


8,500


1,278


Non-current accounts receivable, less allowance for doubtful







accounts (March 31, 2017: RMB70,744; September 30,







2017: RMB68,696 (US$10,325))

135,148


123,421


18,550


Inventories

68,775


69,843


10,497


Intangible assets, net

106,686


104,376


15,688


Available-for-sale equity securities

200,790


163,038


24,505


Other investment

189,129


189,129


28,426


Deferred tax assets

22,155


25,772


3,874


Total assets

5,182,912


5,565,187


836,457









LIABILITIES







Current liabilities







Convertible note, net

1,031,154


-


-


Accounts payable

11,060


13,125


1,973


Accrued expenses and other payables

65,162


92,238


13,864


Deferred revenue

323,690


374,912


56,350


Amount due to a related party

4,679


10,428


1,567


Income tax payable

11,383


13,294


1,998


Total current liabilities

1,447,128


503,997


75,752


Non-current deferred revenue

1,569,579


1,728,471


259,792


Other non-current liabilities

302,233


330,455


49,668


Deferred tax liabilities

21,423


20,985


3,154


Total liabilities

3,340,363


2,583,908


388,366







EQUITY







Shareholders' equity of China Cord Blood







Corporation







Ordinary shares







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







73,140,147 shares issued and 73,003,248 shares







outstanding as of March 31, 2017 and 113,661,641







shares issued and 113,524,742 shares outstanding







as of September 30, 2017

50


78


12


Additional paid-in capital

936,417


1,987,057


298,657


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







2017: 136,899 shares, respectively)

(2,815)


(2,815)


(423)


Accumulated other comprehensive income/(loss)

24,428


(26,166)


(3,933)


Retained earnings

879,775


1,016,505


152,783


Total equity attributable to China Cord Blood







Corporation

1,837,855


2,974,659


447,096


Non-controlling interests

4,694


6,620


995


Total equity

1,842,549


2,981,279


448,091


Total liabilities and equity

5,182,912


5,565,187


836,457


EXHIBIT 2

CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months and Six Months Ended September 30, 2016 and 2017










Three months ended September 30,


Six months ended September 30,




2016


2017


2016


2017




RMB


RMB


US$


RMB


RMB


US$




(in thousands except per share data)
















Revenues


184,140


234,572


35,257


357,092


458,794


68,958


Direct costs


(39,088)


(45,644)


(6,860)


(76,521)


(90,426)


(13,592)


Gross profit


145,052


188,928


28,397


280,571


368,368


55,366


Operating expenses














Research and development


(2,377)


(3,664)


(551)


(4,326)


(6,343)


(953)


Sales and marketing


(39,642)


(56,152)


(8,440)


(77,834)


(99,602)


(14,970)


General and administrative


(48,289)


(52,784)


(7,934)


(91,532)


(103,134)


(15,501)


Total operating expenses


(90,308)


(112,600)


(16,925)


(173,692)


(209,079)


(31,424)


Operating income


54,744


76,328


11,472


106,879


159,289


23,942


Other (expenses)/income, net














Interest income


4,438


5,790


870


8,715


10,617


1,596


Interest expense


(29,801)


-


-


(58,634)


(3,257)


(490)


Foreign currency exchange














(losses)/gains


(15)


110


17


120


111


17


Others


576


993


149


728


2,142


322


Total other (expenses)/income,














net


(24,802)


6,893


1,036


(49,071)


9,613


1,445


Income before income tax


29,942


83,221


12,508


57,808


168,902


25,387


Income tax expense


(12,639)


(14,525)


(2,183)


(24,315)


(30,246)


(4,547)


Net income


17,303


68,696


10,325


33,493


138,656


20,840


Net income attributable to














non-controlling interests


(662)


(1,101)


(165)


(1,130)


(1,926)


(289)


Net income attributable to














China Cord Blood Corporation's














shareholders


16,641


67,595


10,160


32,363


136,730


20,551
















Earnings per share:














Attributable to ordinary shares














- Basic


0.22


0.60


0.09


0.44


1.22


0.18


- Diluted


0.22


0.60


0.09


0.44


1.22


0.18






















Other comprehensive losses,














net of nil income taxes














- Foreign currency translation














adjustments


(1,400)


(8,376)


(1,259)


(8,360)


(20,107)


(3,022)


- Unrealized holding losses














in available-for-sale














equity securities


(10,507)


(18,562)


(2,790)


(16,977)


(30,487)


(4,582)


Total other comprehensive losses


(11,907)


(26,938)


(4,049)


(25,337)


(50,594)


(7,604)


Comprehensive income


5,396


41,758


6,276


8,156


88,062


13,236
















Comprehensive income attributable to














non-controlling interests


(662)


(1,101)


(165)


(1,130)


(1,926)


(289)


Comprehensive income














attributable to China Cord Blood














Corporation's shareholders


4,734


40,657


6,111


7,026


86,136


12,947


EXHIBIT 3

CHINA CORD BLOOD CORPORATION
RECONCILIATION OF NON-GAAP OPERATING INCOME
For the Three Months and Six Months Ended September 30, 2016 and 2017






Three months ended September 30,



Six months ended September 30,




2016



2017



2016



2017




RMB



RMB



US$



RMB



RMB



US$




(in thousands)


GAAP amount of operating



















income


54,744



76,328



11,472



106,879



159,289



23,942


Depreciation and



















amortization expenses5


12,563



12,354



1,857



25,147



25,106



3,773


Share-based compensation



















expense6


15,546



20,060



3,015



30,605



16,622



2,498


Non-GAAP operating



















income


82,853



108,742



16,344



162,631



201,017



30,213


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

6 Share-based compensation expense relates to the Company's RSU scheme in which 7,300,000 RSUs were issued and outstanding as of September 30, 2017.

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SOURCE China Cord Blood Corporation