Still reading recent announcements. Especially like these last...

Still reading recent announcements. Especially like these last three lines in this announcement. Testing the waters first and not being tied to Australia where margins are constantly being narrowed and regulations more stringent.

This JV represents a source of revenue not reliant on Australian regulation, and
the opportunity to work with two major Chinese companies to better understand the market, before any
decision is taken regarding an investment in clinic ownership.”


Capitol Health Limited
Level 3, 81 Lorimer Street Docklands 3008
All correspondence to: PO Box 836 Port Melbourne VIC 3207
Tel: (03) 9348 3333 Fax: (03) 9646 2260
www.capitolhealth.com.au
ABN 84 117 391 812
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ASX ANNOUNCEMENT 20 February 2017
CAPITOL ENTERS DIAGNOSTIC IMAGING CONSULTING AND
CLINIC MANAGEMENT JOINT VENTURE IN CHINA
Capitol Health Limited (ASX:CAJ) (“Capitol” or the “Company”) is pleased to announce that further to its
announcement regarding its China MOU in June 2016, it has entered into an equity joint venture agreement
(“JV”) with CITIC Pharmaceutical (Shenzhen) Co., Ltd (“CITIC Pharmaceutical”) and Xiamen Zhouxin
Medical Image Co., Ltd ("Zhouxin") to provide consulting and clinic management services to a network
of independent imaging clinics to be created by CITIC and Zhouxin across mainland China. The name
of Joint Venture is China-Australia Medical Imaging (Shenzhen) Co., Ltd. ("CAMI").
CITIC Pharmaceutical, a majority controlled subsidiary of CITIC Medical and Health Group Co., Ltd (a wholly
owned subsidiary of CITIC Group), is a large comprehensive pharmaceutical enterprise integrating medicine
supply to hospitals, cross-regional commercial distribution, medical investment, medical instruments and
consumables sales, and a medicine retailing service.
Zhouxin is a premium healthcare chain headquartered in Xiamen, Fujian province, China. CITIC
Pharmaceutical is a shareholder in Zhouxin. Zhouxin is a market leader in cardiovascular MRI. Zhouxin offers
health services including healthcheck, medication, healthcare, senior care, and a health club for very high
net worth patients, called Top Boss.
Capitol will own a 30% stake in the JV contributing RMB3 million (approximately AUD$600,000), CITIC
Pharmaceutical will own 60%, Zhouxin will own 10%, and combined, will contribute RMB7 million. The
agreement also provides Capitol with an option at Capitol’s discretion to take ownership stakes in new
diagnostic imaging centers to be under management. As the JV will establish greenfield imaging centres it
is not expected to generate earnings during the FY17 period.
CAMI’s early diagnostic imaging centers are planned for opening in 2017 in cities where CITIC already own
hospitals that will generate patient referrals.
The JV represents a further step in Capitol’s broader strategy to participate in the fast growing Chinese
diagnostic imaging market. The recent Chinese Government healthcare reform resulted in substantial
growth in the private healthcare industry in China. It has seen growth in private hospitals, private pathology
operations, private health check networks, and more recently the approval for private independent
diagnostic imaging centers.
Andrew Harrison, Managing Director, noted, “China represents a significant opportunity for Capitol to
leverage our world class medical staff and experience in design, development and operations of Diagnostic
Imaging Centres. The growth in China’s private healthcare sector, along with the recent reforms allowing
Diagnostic Imaging Centres to operate privately outside of hospitals, provides a solid market entry
opportunity for Capitol. This JV represents a source of revenue not reliant on Australian regulation, and
the opportunity to work with two major Chinese companies to better understand the market, before any
decision is taken regarding an investment in clinic ownership.”
________________________________________________________________________________________________
For more information, please contact:
Andrew Harrison
Managing Director
Capitol Health Limited
Tel: (03) 9348 3333
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