China Cord Blood Corporation Reports Financial Results for the Fourth Quarter and Full Year of Fiscal 2013

4Q13 Added 16,059 New Subscribers

4Q13 Revenue Up 33.3% YOY to RMB133.0 Million

4Q13 Operating Income Up 45.6% to RMB50.7 Million

Conference Call to be Held June 19, 2013 at 8:00 a.m. ET

HONG KONG, June 19, 2013 /PRNewswire-FirstCall/ -- 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 preliminary unaudited financial

results for the fourth quarter and full year of fiscal year 2013 ended March

31, 2013.

Fourth Quarter of Fiscal 2013 Highlights

- Revenues for the fourth quarter of fiscal 2013 increased by 33.3% to

RMB133.0 million ($21.4 million) from RMB99.8 million in the prior year

period.

- New subscriber sign-ups reached 16,059.

- Accumulated subscriber base amounted to 311,982, up 30.1% year-over-year.

- Gross profit increased by 38.8% to RMB106.1 million ($17.1 million) from

RMB76.4 million in the prior year period.

- Gross margin was 79.8%, an increase from 76.6% in the prior year period.

- Operating income increased by 45.6% to RMB50.7 million ($8.2 million) from

RMB34.8 million in the prior year period.

- Interest expense amounted to RMB22.1 million ($3.6 million), compared to

RMB0.9 million in the prior year period.

- Net income attributable to the Company was RMB23.0 million ($3.7 million),

decreased by 21.2% compared to the prior year period, as a result of

increased interest expenses.

- Operating cash inflow for the quarter amounted to RMB155.1 million ($25.0

million).

Full Year Fiscal 2013 Highlights

- Revenues for the full year fiscal 2013 increased by 38.3% to RMB526.1

million ($84.7 million) from RMB380.5 million in the prior year.

- New subscriber sign-ups reached 72,228 and the accumulated subscriber base

expanded to 311,982.

- Gross profit increased by 42.8% to RMB419.5 million ($67.5 million) from

RMB293.8 million in the prior year.

- Operating income increased by 55.2% to RMB209.3 million ($33.7 million)

from RMB134.8 million in the prior year.

- Interest expense amounted to RMB70.1 million ($11.3 million), compared to

RMB3.3 million in the prior year.

- Net income attributable to the Company amounted to RMB112.4 million ($18.1

million), compared to RMB132.0 million in the prior year.

- Operating cash inflow for the full year fiscal 2013 was RMB578.6 million

($93.2 million).

"Fiscal 2013 was a fruitful year concluded with eventful accomplishments,"

stated Ms. Ting Zheng, Chief Executive Officer of China Cord Blood

Corporation. "We successfully added 72,228 new subscribers to our subscriber

base, finishing the year by surpassing our original target by more than 12%,

and our growing accumulated subscriber base exceeded the three hundred thousand

mark at 311,982. These accomplishments were made possible by our years of

market cultivation efforts and the 'Dragon Year' baby boom. Aside from setting

new records of revenue and operating cash flow, we have also raised our

investment in both Guangdong and Shandong as we continue to expand our presence

in China. In addition, we are pleased that our Beijing subsidiary received

AABB Accreditation as our commitment toward high quality standards has been

recognized, which motivates us to strive for further quality excellence for our

Group as a whole."

Summary - The Fourth Quarter and Full Year Ended March 31, 2012 and 2013

Three Months Ended Year Ended March 31,

March 31,

2012 2013 2012 2013

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

Revenues 99,778 133,011 21,417 380,490 526,123 84,711

Gross Profit 76,448 106,104 17,085 293,832 419,502 67,544

Operating Income 34,842 50,747 8,172 134,843 209,314 33,702

Net Income Attributable to the 29,239 23,028 3,709 131,980 112,447 18,106

Company

Earnings per Ordinary Shares

- Basic[1] and Diluted (RMB/US$) 0.40 1.79

0.32 0.05 1.49 0.24

Revenue Breakdown (%)

Processing Fees 74.0% 72.2% 74.0% 75.4%

Storage Fees 26.0% 27.8% 26.0% 24.6%

New Subscribers (persons) 14,336 16,059 53,924 72,228

Total Accumulated Subscribers 239,754 311,982 239,754 311,982

(persons)

Summary - Selected Cash Flow Statement Items

Three Months Ended Year Ended

March 31, 2013 March 31, 2013

(in thousands) RMB US$ RMB US$

Net cash provided by operating activities 155,079 24,969 578,632 93,166

Net cash used in investing activities (137,297) (22,106) (493,717) (79,494)

Net cash (used in)/provided by financing activities (2,750) (443) 618,718 99,620

Fourth Quarter of Fiscal 2013 Financial Results

REVENUES. Revenues increased by 33.3% to RMB133.0 million ($21.4 million) in

the fourth quarter of fiscal 2013 from RMB99.8 million in the prior year

period, driven by increasing new subscriber sign-ups during the quarter, as

well as the strong increase in recurring income from our rising accumulated

subscriber base.

Revenues generated from storage fees increased to RMB37.0 million ($6.0

million), up 42.3% from RMB26.0 million in the prior year period. As a result

of the expanded subscriber base, revenue generated from storage fees as a

percentage of total revenues increased to approximately 27.8%, from 26.0% in

the prior year period.

Revenues generated from processing fees increased to RMB96.0 million ($15.4

million) due to the increase in new subscribers sign-ups. Revenues generated

from processing fees accounted for 72.2% of total revenues, compared to 74.0%

in the prior year period.

GROSS PROFIT. Gross profit for the fourth quarter of fiscal 2013 increased by

38.8% to RMB106.1 million ($17.1 million) with gross margin expanded from 76.6%

in the prior year period to 79.8%. Higher gross margin is supported by rising

contribution from storage revenues and economies of scale, which exceeded the

increase in material and labor costs.

OPERATING INCOME. Operating income for the fourth quarter increased 45.6% to

RMB50.7 million ($8.2 million) from RMB34.8 million in the prior year period.

With the increase in administrative costs largely being contained, the benefit

of rising revenue and gross margin expansion helped to fuel the operating

margin expansion from 34.9% in the prior period to 38.2%, however the benefit

was also partially offset by increased sales and marketing efforts.

Depreciation and amortization expenses for the fourth quarter were RMB11.3

million ($1.8 million), compared to RMB7.7 million in the prior year period.

Research and Development Expenses. Research and development expenses

increased to RMB2.2 million ($0.4 million) compared to RMB2.0 million in

the prior year period.

Sales and Marketing Expenses. Sales and marketing expenses for the fourth

quarter amounted to RMB26.1 million ($4.2 million). As a percentage of

revenue, it increased to 19.6% in the fourth quarter of fiscal 2013,

compared to 16.6% in the prior year period. The increase in sales and

marketing expenses represented more comprehensive marketing efforts and an

increase in the Company's sales force, which was consistent with

management's expectations and sets the stage for the Company's ongoing

market penetration efforts.

General and Administrative Expenses. General and administrative expenses

were RMB27.0 million ($4.3 million) compared to RMB23.1 million in the

prior year period. As a percentage of revenue, it decreased to 20.3% in

the fourth quarter of fiscal 2013, compared to 23.1% in the prior year

period, which was generally consistent with the general and administrative

expenses of the Company in the third quarter of fiscal 2013.

OTHER INCOME AND EXPENSES

Interest Expense. Interest expense increased to RMB22.1 million ($3.6

million) from RMB0.9 million in the prior year period. The increase was

largely attributable to the convertible notes issued to KKR China

Healthcare Investment Limited ("KKR") and Golden Meditech Holdings Limited

("Golden Meditech"). In the fourth quarter of fiscal 2013, interest

expense related to the convertible notes amounted to RMB21.2 million ($3.4

million).

NET INCOME ATTRIBUTABLE TO THE COMPANY. Income before income tax for the

fourth quarter of fiscal 2013 decreased by 12.1% to RMB33.6 million ($5.4

million) due to higher interest expense recorded in the current quarter. As a

result, net income attributable to the Company for the fourth quarter of fiscal

2013 was RMB23.0 million ($3.7 million), and decreased from RMB29.2 million in

the prior year period. Net margin for the fourth quarter of fiscal 2013 was

17.3%, compared to 29.3% in the prior year period, as a result of

higher operating margin offset by higher interest expense incurred for the

convertible notes.

EARNINGS PER SHARE. The terms of the convertible notes issued to KKR and

Golden Meditech provide each party with the ability to participate in any

Excess Cash Dividend.[2] Therefore, the calculation of basic and diluted EPS

has taken into consideration the effect of such participating rights equal to

RMB0.00 ($0.00) for the fourth quarter of fiscal 2013. Basic and diluted

earnings per ordinary share for the fourth quarter of fiscal 2013 were RMB0.32

($0.05).

LIQUIDITY. As of March 31, 2013, the Company had cash and cash equivalents of

RMB1,494.1 million ($240.6 million) compared to RMB794.3 million as of March

31, 2012. The Company had total debt of RMB801.8 million ($129.1 million) as

of March 31, 2013. Operating cash inflow for the fourth quarter of fiscal 2013

amounted to RMB155.1 million ($25.0 million), representing a significant growth

from RMB102.2 million in the prior year period.

Full Year Fiscal 2013 Financial Results

For the full year fiscal year 2013, total revenues increased by 38.3% to

RMB526.1 million ($84.7 million) from RMB380.5 million in the prior year. The

increase was largely attributable to the significant increase in new

subscribers during the "Dragon Year" baby boom and the expansion of the

Company's accumulated subscriber base to 311,982 subscribers. Similarly,

revenues related to processing fees and storage fees grew by 40.9% and 30.8%,

respectively. Gross profit increased by 42.8% to RMB419.5 million ($67.5

million) from RMB293.8 million in the prior year, and operating income

increased by 55.2% to RMB209.3 million ($33.7 million) from RMB134.8 million in

the prior year. Interest expense increased to RMB70.1 million ($11.3 million)

from RMB3.3 million in the prior year, and the increase was largely

attributable to the convertible notes issuances during fiscal 2013. As such,

income before income tax grew 4.3% to RMB158.2 million ($25.5 million), from

RMB151.6 million in the prior year. Income tax expense was lower in fiscal

2012 because the Company recorded a tax write-back due to the High and New

Technology Enterprise tax status of both Beijing and Guangdong subsidiaries

during fiscal 2012, no such write-back was recorded during fiscal 2013.

Combining the effects of higher interest expense and lack of tax write-back in

fiscal 2013, net income attributable to the Company for the fiscal 2013

amounted to RMB112.4 million ($18.1 million). Basic and diluted earnings per

share attributable to ordinary shares were RMB1.49 ($0.24). The calculation of

basic and diluted earnings per share has taken into consideration the effect of

the participating rights in any Excess Cash Dividend[2] of RMB0.08 ($0.01) for

fiscal 2013. Net cash provided by operating activities for full year of fiscal

2013 was RMB578.6 million ($93.2 million), up from RMB353.9 million in the

prior year due to higher adoption rates regarding upfront payment option and

the increase in new subscriber sign-ups.

Ms. Zheng stated, "Moving away from the Year of the Dragon and entering fiscal

2014, we expect to experience both challenges and opportunities. As the

Chinese market gradually resumes lower normalized birth trends, we anticipate

some near-term pressure to subscriber growth rates. Consequently, our

near-term priority is to penetrate the Guangdong market by adding new storage

capacity in the region and accelerating the development and renovation process

with respect to the new Zhejiang storage facility."

"As the Company is a premium cord blood banking operator, consistent with our

pricing strategy to date and pursuit of high quality standings, we have decided

to readjust our prices by increasing the processing fee to RMB6,800 from

RMB5,800 and gross annual payment to RMB980 from RMB620 across Beijing

municipality, Guangdong province and Zhejiang province. This initiative will

allow us to maximize profitability and offset rising production costs. We

remain dedicated to our China expansion strategy by deepening our penetration

into our local territories while also pursuing new opportunities in other

regions of China where we do not currently serve. We continue to build on our

favorable market position and industry trend to better serve the needs of our

customers and drive improved performance for our shareholders." Ms. Zheng

concluded.

[1] The terms of the convertible notes issued to KKR and Golden Meditech

provide KKR and Golden Meditech with the ability to participate in any excess

cash dividend. Therefore, the calculation of basic EPS has taken into

consideration the effect of such participating rights equal to RMB0.00 ($0.00)

and RMB0.08 ($0.01) for the three months and year ended March 31, 2013,

respectively.

[2] "Excess Cash Dividend" means any cash dividend to holders of shares that,

together with all other cash dividends previously paid to holders of shares in

the same financial year, exceeds, on a per share basis, an amount equal to the

interest that has accrued and shall accrue at 7% in such financial year divided

by the number of shares into which the note is convertible at the conversion

price then in effect on the relevant record date.

Conference Call

The Company will host a conference call at 8:00 a.m. ET on Wednesday, June 19,

2013 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 may 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 presentation and available for three weeks at

the same URL link above. Listeners may also access the call by dialing

1-718-354-1231 or 1-866-519-4004 for US callers or +852-2475-0994 for Hong Kong

callers, access code: 73748995.

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 only seven licenses have been 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 of this press release, and the Company does not intend to update

any of the forward-looking statements after the date of this press release 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 implementing

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; compliance with

restrictive debt covenants under our senior convertible notes; 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 March 31, 2013 were made at the noon buying rate of

RMB6.2108 to $1.00 on March 29, 2013 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.

Mr. William Zima

Tel: (+86) 10-6583-7511

U.S. Tel: (646) 405-5185

Email: William.Zima@icrinc.com

CHINA CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2012 and 2013

March 31, March 31,

2012 2013

RMB RMB US$

(in thousands except share data)

ASSETS

Current assets

Cash and cash equivalents 794,311 1,494,099 240,565

Accounts receivable, less allowance

for doubtful accounts

(March 31, 2012: RMB13,916; March 31,

2013: RMB14,112) 79,012 73,076 11,766

Inventories 6,666 10,265 1,652

Prepaid expenses and other receivables 11,561 11,602 1,868

Trading securities 354 - -

Debt issuance costs - 3,678 592

Deferred tax assets 5,268 5,454 878

Total current assets 897,172 1,598,174 257,321

Property, plant and equipment, net 267,862 468,272 75,397

Non-current prepayments 2,863 212,633 34,236

Non-current accounts receivable, less

allowance for doubtful accounts

(March 31, 2012: RMB38,628; March 31,

2013: RMB36,361) 254,236 249,370 40,152

Inventories 34,651 39,730 6,396

Intangible assets, net 129,791 125,170 20,154

Available-for-sale equity securities 98,199 88,404 14,234

Other investment 134,363 189,129 30,452

Debt issuance costs - 11,667 1,879

Deferred tax assets 5,013 3,727 600

Total assets 1,824,150 2,986,276 480,821

LIABILITIES

Current liabilities

Bank loan 45,000 50,000 8,050

Accounts payable 6,343 9,890 1,592

Accrued expenses and other payables 33,351 84,006 13,527

Deferred revenue 106,110 172,328 27,747

Amounts due to related parties 360 11,241 1,810

Income tax payable 5,943 4,983 802

Total current liabilities 197,107 332,448 53,528

Convertible notes - 751,781 121,044

Non-current deferred revenue 306,534 530,258 85,377

Other non-current liabilities 60,420 107,158 17,254

Deferred tax liabilities 24,462 23,168 3,730

Total liabilities 588,523 1,744,813 280,933

EQUITY

Shareholders' equity

Ordinary shares

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

authorized, 73,140,147 shares issued

and outstanding as of March 31, 2012

and 73,140,147 shares issued and

73,003,248 shares outstanding as of 50 50 8

March 31, 2013

Additional paid-in capital 865,654 798,221 128,522

Treasury stock, at cost (March 31, 2012:

nil; March 31, 2013 :

136,899 shares) - (2,815) (453)

Accumulated other comprehensive income 26,057 18,256 2,939

Retained earnings 310,973 423,420 68,175

Total shareholders' equity 1,202,734 1,237,132 199,191

Non-controlling interests 32,893 4,331 697

Total equity 1,235,627 1,241,463 199,888

Total liabilities and equity 1,824,150 2,986,276 480,821

CHINA CORD BLOOD CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months and Year ended March 31, 2012 and 2013

Three months ended March 31, Year ended March 31,

2012 2013 2012 2013

RMB RMB US$ RMB RMB US$

(in thousands except share data)

Revenues 99,778 133,011 21,417 380,490 526,123 84,711

Direct costs (23,330) (26,907) (4,332) (86,658) (106,621) (17,167)

Gross profit 76,448 106,104 17,085 293,832 419,502 67,544

Operating

expenses

Research and

development (1,953) (2,249) (362) (7,615) (8,459) (1,362)

Sales and

marketing (16,567) (26,116) (4,205) (61,678) (93,684) (15,084)

General and

administrative (23,086) (26,992) (4,346) (89,696) (108,045) (17,396)

Total operating

expenses (41,606) (55,357) (8,913) (158,989) (210,188) (33,842)

Operating income 34,842 50,747 8,172 134,843 209,314 33,702

Other income/

(expense), net

Interest income 3,411 4,002 644 13,432 15,064 2,425

Interest expense (896) (22,070) (3,553) (3,287) (70,097) (11,286)

Exchange gain/(loss) 33 (25) (4) (1,343) (984) (158)

Dividend income - - - 7,217 4,685 754

Others 823 924 149 737 203 33

Total other income/

(expense), net 3,371 (17,169) (2,764) 16,756 (51,129) (8,232)

Income before

income tax 38,213 33,578 5,408 151,599 158,185 25,470

Income tax expense (6,597) (10,483) (1,688) (9,634) (38,543) (6,206)

Net income 31,616 23,095 3,720 141,965 119,642 19,264

Net income

attributable

to non-

controlling

interests (2,377) (67) (11) (9,985) (7,195) (1,158)

Net income

attributable to

the Company 29,239 23,028 3,709 131,980 112,447 18,106

Net income

per share:

Attributable to

ordinary shares

- Basic 0.40 0.32 0.05 1.79 1.49 0.24

- Diluted 0.40 0.32 0.05 1.79 1.49 0.24

Other comprehensive

income

- Net effect of

foreign currency (604) 2,936 473 (1,653) 1,296 209

translation, net

of nil tax

- Net unrealized

gain/(loss) in

available-for-sale

equity securities, 58,055 12,023 1,936 46,587 (9,120) (1,468)

net of nil tax

Comprehensive

income 89,067 38,054 6,129 186,899 111,818 18,005

Comprehensive income

attributable (2,427) (67) (11) (10,282) (7,172) (1,155)

to non-controlling

interests

Comprehensive

income 86,640 37,987 6,118 176,617 104,646 16,850

attributable to

the Company

SOURCE China Cord Blood Corporation