GlobeNewswire Inc | Aug 24, 2021 07:23AM EDT

August 24, 2021

BEIJING, Aug. 24, 2021 (GLOBE NEWSWIRE) -- Genetron Holdings Limited (Genetron Health or the Company, NASDAQ:GTH), a leading precision oncology platform company in China that specializes in offering molecular profiling tests, early cancer screening products and companion diagnostics development, today announced its unaudited preliminary financial results for the second quarter ended June30, 2021.

Second Quarter and Recent Highlights

-- Recorded total revenue of RMB 140.5 million (US$21.8 million) for the second quarter 2021, representing a 38.1% increase over the same period of 2020. -- Generated LDT segment revenue with year on year growth of 15.0% to RMB 87.1 million (US$13.5 million) for the second quarter 2021. -- IVD revenue was RMB 43.8 million (US$6.8 million) for the second quarter 2021, representing 141.5% growth over the same period of 2020, due to increasing sales of Genetron S5 instrument and 8-gene Lung Cancer Assay (Tissue). -- Development services grew 21.8% compared to a year ago, based on our increasing effort in providing services to biopharmaceutical partners. -- Achieved gross margin of 67.2% for the second quarter 2021, compared to 63.1% in the same period of 2020, thanks to improvements in both LDT and IVD business lines. -- Genetron established a IVD partnership with Shanghai Yikon Genomics Technology Co., Ltd., in which the partner will have exclusive rights of its S5 instrument in the area of reproductive health. -- Recently, Seq-MRD for hematologic cancers has signed on a leading pharmaceutical MNC for use in their clinical trial. -- AYVAKIT companion diagnostic kit, developed in partnership with CStone Pharmaceuticals, has entered the priority review and approval process under the NMPA in China. -- Received CE Mark for 8-gene Lung Cancer Assay (Tissue). -- Established collaboration with Guizhou Provinces Dafang County authorities to use HCCscreenTM for high-risk liver cancer patients in the rural markets. -- Genetrons Beijing lab achieved full marks and was ranked first in NCCLs External Quality Assessment of participating clinical laboratories in China, based on its NGS-based comprehensive genomic profiling for solid tumors, Onco Panscan.

In the second quarter, we delivered strong revenues, along with improved gross margins. We were pleased to see continued sales momentum across all of our business lines, remarked Mr. Sizhen Wang, co-founder and CEO of Genetron Health. Over the past several weeks, the stricter COVID policies in China have impacted our business, which at present we believe is temporary. We are closely monitoring the evolving situation and remain focused on executing our strategy in geographies and segments that are less affected by the restrictions. Notwithstanding the near-term challenges, we also continue to execute on the pipeline front in the second half. We are moving along with our NMPA registrational trial preparation for HCCscreenTM, and we project to release CRC data for early screening later this year. Our efforts in MRD are also progressing with the upcoming LDT launch of Seq-MRD in blood cancers in the clinical settings, as well as other ongoing studies in solid tumors. As we continue to focus on achieving the important milestones for the company, we also remain confident about the overall growth prospects of the precision oncology sector in China, thanks to continued government support and related policy tailwinds that aim at providing broader and better healthcare options for Chinese citizens.

Second Quarter 2021 Unaudited Preliminary Financial Results

Total revenue for the second quarter 2021 increased by 38.1% to RMB140.5 million (US$21.8 million) from RMB101.7 million in the same period of 2020.

Diagnosis and monitoring revenueincreased by 39.4% to RMB131.0 million (US$20.3 million) in the second quarter 2021 from RMB93.9 million in the same period of 2020. The increase was driven by the growth in the revenue generated from the sale of IVD products.

-- Revenue generated from the provision of LDT services increased by 15.0% to RMB87.1 million (US$13.5 million) during the second quarter 2021 from RMB75.8 million in the same period of 2020. In the second quarter, sales of LDT services included sales of our early screening test, HCCscreen. LDT diagnostic tests sold in the second quarter 2021 totaled approximately 6,840 units. -- Revenue generated from sales of IVD products increased by 141.5% to RMB43.8 million (US$6.8 million) in the second quarter 2021 from RMB18.1 million in the second quarter 2020, due to increasing sales of Genetron S5 instrument and 8-gene Lung Cancer Assay (Tissue).

Contracted in-hospital partners(as of the end of the period indicated) 2Q20 3Q20 4Q20 1Q21 2Q21 IVD In-hospital partners 18 20 22 23 28 2Q20 3Q20 4Q20 1Q21 2Q21 Total in-hospital partners^(1) 35 38 40 42 50Note:(1) The number of total in-hospital partners include both sales of LDT services and IVD products.

Revenue generated from development services increased by 21.8% to RMB9.5 million (US$1.5 million) in the second quarter 2021, from RMB7.8 million in the same period of 2020. Biopharmaceutical revenue growth increased significantly in the second quarter of 2021 compared to the same period of 2020.

Cost of revenue increased by 22.7% to RMB46.0 million (US$7.1 million) for the three months ended June 30, 2021, compared to RMB37.5 million in the same period of 2020.

Gross profitincreased by 47.1% to RMB94.5 million (US$14.6 million) in the second quarter 2021 from RMB64.2 million in the same period of 2020. Gross margin improved to 67.2% for the second quarter 2021, compared to 63.1% in the same period of 2020, mainly due to higher gross margins for both LDT and IVD business lines.

Operating expenses increased by 65.8% to RMB194.6 million (US$30.1 million) for the three months ended June 30, 2021, from RMB117.4 million in the same period of 2020.

Selling expenses increased by 46.0% to RMB88.5 million (US$13.7 million) in the second quarter 2021 from RMB60.6 million in the same period of 2020. Selling expenses as a percentage of revenues was 63.0% in the second quarter 2021, compared to 59.6% in the same period of 2020. The increase was primarily due to higher marketing expense and higher employee compensation expenses.

Administrative expenses increased by 95.6% to RMB54.6 million (US$8.5million) in the second quarter 2021 from RMB27.9 million in the same period of 2020. Administrative expenses as a percentage of revenues increased to 38.8% in the second quarter 2021 from 27.4% in the second quarter 2020. The increases were mainly due to more headcount, higher professional fees, and IT expenses.

Research and development expenses increased by 88.2% to RMB56.2 million (US$8.7 million) in the second quarter 2021 from RMB29.8 million in the same period of 2020. Research and development expenses as a percentage of revenues increased to 40.0% in the second quarter of 2021 from 29.3% in the same period of 2020. The increases were driven by higher R&D headcount and related expenses, as well as continued innovation efforts including product development and clinical trial activities.

As a result of the above, operating loss was RMB100.2 million (US$15.5 million) for the three months ended June 30, 2021, compared to RMB53.1 million for the three months ended June 30, 2020.

Net finance income increased to RMB8.0 million (US$1.2 million) in the second quarter 2021 from net finance costs of RMB0.6 million in the same period of 2020. The increase was mainly driven by the foreign currency exchange gain.

Loss for the period was RMB92.1 million (US$14.3 million) for the three months ended June 30, 2021, compared to RMB2,832.4 million for the three months ended June 30, 2020. The Company recorded RMB2,778.6 million and nil in fair value loss of financial instruments with preferred rights for the three months ended June 30, 2020 and 2021, respectively.

Non-IFRS loss for the period, defined as loss for the period excluding share-based compensation expenses, fair value change and other loss of financial instruments with preferred rights, was RMB79.6 million (US$12.3 million) for the three months ended June 30, 2021, compared to RMB43.9 million for the three months ended June 30, 2020. Please refer to the section in this press release titled "Non-IFRS Financial Measures" for details.

Basic loss per ordinary share attributable to ordinary shareholders of the Company was RMB0.20 (US$0.03) for the second quarter of 2021, compared with a basic loss per share attributable to ordinary shareholders of the Company of RMB17.04 for the same period of 2020. Excluding share-based compensation expenses, fair value change of financial instruments with preferred rights and other loss of financial instruments with preferred rights, non-IFRS basic loss per share attributable to ordinary shareholders of the Company was RMB0.17 (US$0.03) for the second quarter of 2021, compared with non-IFRS basic loss per share attributable to ordinary shareholders of the Company of RMB0.26 for the same period of 2020. Diluted loss per share attributable to ordinary shareholders of the Company is equivalent to basic loss per share attributable to ordinary shareholders of the Company. Each ADS represents of five ordinary shares, par value US$0.00002 per share. Please refer to the section in this press release titled "Non-IFRS Financial Measures" for details.

As of June 30, 2021, our cash and cash equivalents, restricted cash and current financial assets at fair value through profit or loss were RMB1,214.0 million (US$188.0 million), compared to RMB1,516.1 million as of December 31, 2020. The total decrease was mainly used for operating activities.

2021 Financial Guidance

At this time, we expect the current COVID-related restrictions to be temporary, and are maintaining our 2021 expected revenue range of RMB615 milliontoRMB625 million. However, if the current environment sustains or worsens, the Company expects to reassess its financial projections and would provide appropriate updates to the market at that time.

Conference Call

A conference call and webcast to discuss the results will be held at 8:30 a.m. U.S. Eastern Time on August 24, 2021 (or at 8:30 pm Beijing Time on August 24, 2021). Interested parties may listen to the conference call by dialing numbers below:

United States: +1-845-675-0437China Domestic: 400-620-8038Hong Kong: +852-3018-6771International: +65-6713-5090Conference ID: 7494097

Participants are encouraged to dial into the call at least 15 minutes in advance due to high call volumes.

A replay will be accessible through August 31, 2021 by dialing the following numbers:

United States: +1-855-452-5696International: +61-2-8199-0299Conference ID: 7494097

A simultaneous webcast of the conference call will be available on the "News and Presentations" page of the Investors section of the Company's website. A replay of the webcast will be available for 30 days following the event. For more information, please visit ir.genetronhealth.com.

Exchange Rate Information

All translations made in the financial statements or elsewhere in this press release made from RMB into United States dollars (US$) are solely for convenience and calculated at the rate of US$1.00=RMB 6.4566, representing the exchange rate as of June 30, 2021, set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate, on June 30, 2021.

Non-IFRS Financial Measures

The Company uses non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period, which are non-IFRS financial measures, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that the Company includes in its loss for the year/period. The Company believes that non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period provide useful information about its results of operations, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

Non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period should not be considered in isolation or construed as an alternative to operating profit, loss for the year/period or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period and the reconciliation to its most directly comparable IFRS measures. Non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Non-IFRS loss and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period represent loss for the year/period excluding share-based compensation expenses, fair value change of financial instruments with preferred rights and other loss of financial instruments with preferred rights (if applicable).

Please see the Unaudited Non-IFRS Financial Measures included in this press release for a full reconciliation of non-IFRS loss for the year/period to loss for the year/period and non-IFRS loss per share attributable to ordinary shareholders of the Company for the year/period to loss per share attributable to ordinary shareholders of the Company for the year/period.

About Genetron Holdings Limited

Genetron Holdings Limited (Genetron Health or the Company) (Nasdaq: GTH) is a leading precision oncology platform company in China that specializes in cancer molecular profiling and harnesses advanced technologies in molecular biology and data science to transform cancer treatment. The Company has developed a comprehensive oncology portfolio that covers the entire spectrum of cancer management, addressing needs and challenges from early screening, diagnosis and treatment recommendations, as well as continuous disease monitoring and care. Genetron Health also partners with global biopharmaceutical companies and offers customized services and products. For more information, please visit ir.genetronhealth.com.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Companys beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as may, will, expect, anticipate, target, aim, estimate, intend, plan, believe, potential, continue, is/are likely to or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Companys filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations ContactUS: Hoki Luk Head of Investor Relations Email:hoki.luk@genetronhealth.com Phone: +1 (408) 891-9255

David Deuchler, CFAManaging Director | Gilmartin Groupir@genetronhealth.com

Media Relations ContactYanrong ZhaoGenetron Healthyanrong.zhao@genetronhealth.com

Edmond LococoICREdmond.Lococo@icrinc.comMobile: +86 138-1079-1408genetron.pr@icrinc.com

GENETRON HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS

For the three months For the six months ended ended June 30, 2020 June 30, 2021 June 30,2020 June 30, 2021 RMB?000 RMB?000 US$?000 RMB?000 RMB?000 US$?000 Revenue 101,735 140,485 21,758 178,578 232,546 36,017 Cost of revenue (37,512 ) (46,021 ) (7,128 ) (72,117 ) (83,533 ) (12,938 ) Gross profit 64,223 94,464 14,630 106,461 149,013 23,079 Selling (60,618 ) (88,516 ) (13,709 ) (114,442 ) (148,187 ) (22,951 )expensesAdministrative (27,906 ) (54,577 ) (8,453 ) (49,529 ) (99,180 ) (15,361 )expensesResearch anddevelopment (29,845 ) (56,162 ) (8,698 ) (57,474 ) (106,136 ) (16,438 )expensesNet impairmentlosses on (267 ) (3,474 ) (538 ) (990 ) (13,304 ) (2,061 )financial andcontract assetsOther incomeand gains/ 1,270 8,081 1,252 (4,332 ) 8,611 1,335 (losses) - net Operating (117,366 ) (194,648 ) (30,146 ) (226,767 ) (358,196 ) (55,476 )expenses Operating loss (53,143 ) (100,184 ) (15,516 ) (120,306 ) (209,183 ) (32,397 ) Finance income 198 9,447 1,463 228 5,179 802 Finance costs (827 ) (1,409 ) (218 ) (4,375 ) (3,180 ) (493 ) Finance (costs) (629 ) 8,038 1,245 (4,147 ) 1,999 309 /income - netFair value lossof financialinstruments (2,778,591 ) - - (2,823,370 ) - - with preferredrightsLoss before (2,832,363 ) (92,146 ) (14,271 ) (2,947,823 ) (207,184 ) (32,088 )income taxIncome tax - - - - - - expense Loss for the (2,832,363 ) (92,146 ) (14,271 ) (2,947,823 ) (207,184 ) (32,088 )period Lossattributable to:Owners of the (2,832,363 ) (91,820 ) (14,221 ) (2,947,823 ) (204,574 ) (31,684 )CompanyNon-controlling - (326 ) (50 ) - (2,610 ) (404 )interests (2,832,363 ) (92,146 ) (14,271 ) (2,947,823 ) (207,184 ) (32,088 ) Loss per shareattributable toordinary RMB RMB USD RMB RMB USD shareholders ofthe Company-Basic and (17.04 ) (0.20 ) (0.03 ) (20.25 ) (0.45 ) (0.07 )dilutedLoss per ADSattributable toordinary shareholders ofthe Company-Basic and (85.22 ) (1.00 ) (0.15 ) (101.23 ) (2.23 ) (0.35 )diluted Shares used inloss per shareattributable toordinary shareholders ofthe Companycomputation:-Basic and 166,179,400 459,903,803 459,903,803 145,604,263 458,999,227 458,999,227 dilutedADS used inloss per ADSattributable toordinary shareholders ofthe Companycomputation:-Basic and 33,235,880 91,980,761 91,980,761 29,120,853 91,799,845 91,799,845 diluted

GENETRON HOLDINGS LIMITED

UNAUDITED NON-IFRS FINANCIAL MEASURE

For the three months ended For the six months ended

June 30, 2020 June 30, 2021 June 30, 2020 June 30, 2021 RMB?000 RMB?000 USD?000 RMB?000 RMB?000 USD?000 Loss for the (2,832,363 ) (92,146 ) (14,271 ) (2,947,823 ) (207,184 ) (32,088 )periodAdjustments: Share-based 9,903 12,504 1,937 14,954 21,754 3,369 compensation

Fair value lossof financial 2,778,591 - - 2,823,370 - - instrumentswith preferredrightsNon-IFRS Loss (43,869 ) (79,642 ) (12,334 ) (109,499 ) (185,430 ) (28,719 ) Attributable to:Owners of the (43,869 ) (79,316 ) (12,284 ) (109,499 ) (182,820 ) (28,315 )CompanyNon-controlling - (326 ) (50 ) - (2,610 ) (404 )interests (43,869 ) (79,642 ) (12,334 ) (109,499 ) (185,430 ) (28,719 ) Non-IFRS lossper shareattributable to RMB RMB USD RMB RMB USDordinaryshareholders ofthe Company-Basic and (0.26 ) (0.17 ) (0.03 ) (0.75 ) (0.40 ) (0.06 )diluted Non-IFRS lossperADS (5 ordinaryshares equal to1 ADS) attributable toordinaryshareholders ofthe Company-Basic and (1.32 ) (0.86 ) (0.13 ) (3.76 ) (1.99 ) (0.31 )diluted Shares used innon-IFRS lossper shareattributable to ordinaryshareholders ofthe Companycomputation:-Basic and 166,179,400 459,903,803 459,903,803 145,604,263 458,999,227 458,999,227 diluted ADS used innon-IFRS lossper ADSattributable to ordinaryshareholders ofthe Companycomputation:-Basic and 33,235,880 91,980,761 91,980,761 29,120,853 91,799,845 91,799,845 diluted



GENETRON HOLDINGS LIMITEDUNAUDITED REVENUE AND SEGMENT INFORMATION

Diagnosis and Diagnosis and monitoring monitoring Development services Total - provision of LDT - sale of IVD services products RMB?000 RMB?000 RMB?000 RMB?000 Three months ended June 30, 2020 Revenue 75,772 18,145 7,818 101,735Segment profit 53,094 10,040 1,089 64,223 Three months ended June 30, 2021 Revenue 87,138 43,827 9,520 140,485Segment profit 61,890 31,312 1,262 94,464 Six months ended June 30, 2020 Revenue 123,348 37,358 17,872 178,578Segment profit 81,749 25,388 (676 ) 106,461/(loss) Six months ended June 30, 2021 Revenue 158,966 59,093 14,487 232,546Segment profit 110,701 36,534 1,778 149,013

GENETRON HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As at December As at June 30,2021 31,2020 RMB?000 RMB?000 US$?000ASSETS Non-current assets Property, plant and equipment 76,891 76,746 11,886Right-of-use assets 59,706 55,583 8,609Intangible assets 12,265 15,284 2,367Financial assets at fair value through 19,609 36,334 5,628profit or lossPrepayments 15,362 23,418 3,627 Total non-current assets 183,833 207,365 32,117 Current assets Inventories 24,971 32,978 5,108Contract assets 1,112 2,188 339Other current assets 36,500 31,255 4,841Trade receivables 164,592 211,898 32,819Other receivables and prepayments 42,420 46,835 7,254Amounts due from related parties 214 225 35Financial assets at fair value through 140,294 142,194 22,023profit or lossDerivative financial instruments 196 745 115Restricted cash - 5,000 774Cash and cash equivalents 1,375,766 1,066,815 165,229 Total current assets 1,786,065 1,540,133 238,537 Total assets 1,969,898 1,747,498 270,654

GENETRON HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS CONTINUED

As at December As at June 30,2021 31,2020 RMB?000 RMB?000 US$?000 LIABILITIES Non-current liabilities Borrowings 5,493 1,709 265 Lease liabilities 43,016 38,627 5,983 Other non-current liabilities - 8,096 1,254 Total non-current liabilities 48,509 48,432 7,502 Current liabilities Trade payables 34,071 36,172 5,602 Contract liabilities 8,417 9,719 1,505 Other payables and accruals 111,164 107,742 16,688 Amounts due to related 24 513 79 partiesBorrowings 58,583 27,903 4,322 Lease liabilities 16,585 19,087 2,956 Derivative financial - 4,219 653 instruments Total current liabilities 228,844 205,355 31,805 Total liabilities 277,353 253,787 39,307 Net assets 1,692,545 1,493,711 231,347 SHAREHOLDERS? EQUITY Equity attributable to owners of the Company Share capital 59 59 9 Share premium 6,657,562 6,680,307 1,034,648 Other reserves (24,701 ) (49,917 ) (7,731 )Accumulated losses (4,940,375 ) (5,144,949 ) (796,851 ) 1,692,545 1,485,500 230,075 Non-controlling interests - 8,211 1,272 Total shareholders? equity 1,692,545 1,493,711 231,347