Hong Kong, August 13, 2001 - Medical services and management group Town Health International Holdings Company Limited (HKGEM: 8138) today announces the Group's unaudited consolidated results for the three months ended June 30, 2001. In the three months to June 30, 2001, the Group recorded a turnover of HK$25,183,000, representing an increase of 18.3% as compared to the same period last year. Gross Profit and Profit attributable to shareholders in the three months were HK$11,396,000 and HK$2,339,000 respectively. The directors do not recommend the payment of an interim dividend for the period.

During the period under review, the Group has been expanding its operations in medical and dental services. In addition to the operations at the same period in 2000, the Group has provided management and administrative services to 8 more medical centres and operated 5 more dental practices (collectively, the "New Clinics"). As at June 30, 2001, the Group licenses, manages and / or operates a total of 25 medical centres, 3 integrated medical centres and 14 dental practices.

Gross profit margin decreases from 57.7% for the three months ended June 30, 2000 to 45.3% for the corresponding period in 2001. As it normally takes a certain period of time for a newly established clinic to break even financially, the addition in the New Clinics affected the overall profitability of the Group, resulting in a decrease in gross margin.

It is the Group's strategy to expand both its scale and scope of operations to achieve rapid growth. In addition to the continuous expansion of the Group's core businesses in expanding the Town Health Center network, the Group has been exploring opportunities and succeeded in strengthening its presence in healthcare and pharmaceutical products industry.

The Group engages in the manufacture and sale of Madam Pearl's cough syrup and traditional Chinese medicine through its 46.43% interest in Luxembourg Medicine Company Limited ("LMCL") and 24.0% interest in Wai Yuen Tong Medicine Company Limited ("WYT"). During the period under review, the net profit before tax attributable to these two associates amounts to HK$1,916,000.

"We shall leverage on the projected tremendous growth for healthcare and pharmaceutical products in China with it's imminent accession to World Trade Organization. The Group through its investment in LMCL will take positive steps to strengthen and broaden its distribution channel in the PRC," said Dr Roy Cho Kwai-chee, Chairman, Town Health International.

Town Health International Holdings Company Limited (HKGEM: 8138) is a medical services and management group with a network of Town Health Centres, currently comprising 42 medical and dental centres strategically located in Hong Kong serving over 420,000 patients. The Group is also directly engaged in various healthcare-related businesses with the corporate objective of becoming a comprehensive private healthcare services provider.

Financial Highlights

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