——Committed to Realizing the Long-term Value of the Leading Diabetes Digital Management Expert in the World

OnAugust 7th, 2022, Sinocare turned 20!

In 2021, Sinocare’s net profit saw the steepest decline since it went public. There are three main reasons. First, subsidiary shareholder Xinnuo Health suffered from continued loss due to COVID-19 and unfinished integration. Second, huge amount of resources were invested in the development of the second curve. Third, based on the principle of prudence, accounts receivable in Cuba were fully accrued, and the inventory falling price reserves and impairment of asset were also adequately accrued. The operating result is unsatisfactory. As the company scales up and business increases, how to balance the short-term revenue and long-term development, and coordinate the operating performance of investment and return has become a challenge in Sinocare’s development. Meanwhile, how to reduce the pressure on the market as a result of long-term growth of a single category, and to reconcile the contradictions between the sales of traditional products and the R&D and launch of new products will also become new issues facing us.

COVID-19 keeps spreading in 2022, and the global political and economic environment is full of uncertainties. Since the beginning of this year, we have been continuing on updating our company strategies. After debates and reflections in a series of meetings, we have reached the following consensus: too much anxiety about the macro environment and short-term pressure is not a good business strategy for us. We need to stay focused, calm, optimistic, and committed to our main pathway forward. We will keep the first curve of growing business in blood-glucose- monitoring-products-centered rapid testing for chronic diseases, invest more resources to accelerate the digital intelligence transformation of diabetes management experts, and advance the implementation of the second curve by promoting product innovation, directly connecting to users, IoT-based service innovation, as well as carrying forward essential projects such as improving global quality & operational compliance, and international coordination.

The key to our management is to maintain the continuous growth of the first curve and ensure the steady development of the second curve, while realizing digital transformation in R&D, manufacturing, sales, and other sections.

「Specialization, Digitalization, Globalization」

The world is rapidly entering the era of the Internet of Everything (IoE), and digital transformation is not optional, it’s a must in this era! In the past more than 3 years, based on enhanced IT application, our digital transformation continues to “improve and optimize core business” through “improving company’s IT application”, so as to improve operational efficiency and quality, explore “digital product/service innovation”, provide good customer experience, and increase user value.

The foundation of digitalization includes, first of all, connectivity: the connection between people and instruments, the connection between instruments and data, and the connection between data and services. We need to connect the data generated by instruments with users. Based on big data, cloud computing, mobile applications and artificial intelligence, we can achieve the online and offline integration and the unification of hospitals’ internal and external systems, furthermore, to develop new business— “digital healthcare” + “the mentor service of healthy lifestyle” on our platform.

The transformation through digitization seems to be focusing on technology. But essentially, it is the evolution of people’s way of thinking. It includes transforming the interactive process of users, partners, manufacture, and business, to an online, data-orienting, and intelligentized process; it includes building a digital platform, and successfully implement the digital solution and accomplish our mission of “becoming a user-participated diabetes management expert”.

The second growth curve represents our fine-tuned vision:“The Leading Diabetes Digital Management Expert in the World”, which is driven by innovation in products such as PPL (Personal Palm Lab), PDL (Precision Desk Lab), PWS (Precision Wearable System), etc., as well as innovation in services including Digital Health.

A company’s sustained success = strategy X organizational capabilities. We redefined the core organizational capabilities that are suitable for our strategy of “The Leading Diabetes Digital Management Expert in the World”: Specialization, Digitalization, Globalization.

Specialization refers to user-first innovation based on standard work and systematic management. Meanwhile, constantly improving digital-driven process. We need to finish tasks correctly at the first time, to realize high efficiency and high quality in the content, level and outcome of work.

Digitalization is to go online, intelligent, and platform-based. We need to improve employees’ digital capabilities, and enable them to understand, adapt to, and then optimize digital tools, so as to improve operational quality and efficiency internally while enhancing user experience and value externally.

Globalization is to realize global coordination of R&D, Manufacture and Supply Chain that serve international business in Marketing, Finance, IT, HR, Quality and Platforms, and to achieve localization in our major markets.

The global development is going through uncertainties like never before, yet in the industry of diabetes and other chronic diseases, user needs and user value are definite, which is a long journey that requires tremendous efforts. Sinocare’s second curve— the CGM-based Precision Wearable System (PWS)-- is taking shape, and we are on the way to become a diabetes digital management expert through global arrangement with matched organizational capabilities.

「A Promise for Love」

As we celebrate Sinocare’s 20th anniversary, we would like to thank our customers, employees, partners and shareholders for being optimistic and staying with us in this era full of uncertainties!

We say concrete words and do things constantly, uphold our core value of “A Promise for Love”, commit to our customers, employees and shareholders & partners & society, and fulfill our mission of “improving quality of life for patients with diabetes and other chronic diseases”.

We have dedicated ourselves into the field of diabetes management in the past 20 years, and we will balance short-term and long-term development, and make the best of the long-term value of becoming “The Leading Diabetes Digital Management Expert in the World”.

Winning Now, Winning Later.