Entrepreneurial Ideas: An Untapped High Profit Industry

This "accident" stirred Liu Jia's heart and mind. "Originally hoped to win the championship, only second."

Before, through the domestic listing and financing, expansion of chain stores across the country is already the company's established goal.

He did not envisage that he could also introduce the capital of international venture capital and make Camry an overseas listed company.

Two weeks later, Liu Jia received a call from Citigroup on the first working day of the dog year.

A row of 5 person investment team, a more than 30 page investment report, the first negotiations began.

After the Citigroup, Credit Suisse, Caire, 3I and CICC came one after another -- $10 million, $50 million, $100 million, NASDAQ, Hongkong listed, 50, 80 times earnings, huge project team, and complete design plan, siren's voice is more beautiful.

In the view of these top VC people, Jiamei can be said to be tailor-made for venture capital: simple shareholding structure, flexible private mechanism, obvious leading position in the industry, medium term development, slow expansion in earlier stage, and rich experience curve.

What's more important is that "about 560 million people in China have dental caries, and 94.5% of the patients with oral diseases in China have not been properly treated" - such a market prospect of profit can touch real gold.

According to the report provided by Beijing northern Asia Asset Appraisal Company, the "Jiamei" dental brand value was 805 million RMB as of February 2006.

If overseas listing is successful, Camry's market value will achieve a geometric growth.

Faced with the favor of many financial institutions, Camry began to examine its tremendous potential and future value, and began to consider how to deal with international capital giants.

Starting from February this year, there will be at least 2-3 days each week. Liu Jia will negotiate with Citigroup, Caire, Credit Suisse, 3I, CICC and other international venture capital, investment banking and private investment firm investment teams.

"When I spoke, they said I was a layman". Although 13 years later, the master of economics in Peking University has become an oral professional. He can even see whether there is something wrong with his teeth at the moment of a person's speaking. But Liu Jia has no similar experience with Citibank and other overseas capitals.

Liu Jia is not shy about his anxiety. The process of negotiations is an opportunity for Liu Jia and his business, and a learning process.

"I don't need to bring money," Liu Jia said. "This is no color in Camry's road show." he quickly learned the way of listing overseas. "While bringing money, it also needs to bring brand, management and other intangible assets".

What is more important is that accepting overseas venture capital, tough equity arrangement, reward incentive mechanism, management team change and various negotiations involving core contents of enterprise operation have begun to make Liu Jia more cautious.

After all, this is the turning point in his 13 years of hard work.

The story of 1993, the first Jiamei stomatological hospital in Dalian, was purely "accidental" - "mainly because the enclosure was then used in the contract for the pharmaceutical and medical industry".

In 1993, Liu Jia, 29, set up Camry international group with great ambition. In accordance with the requirements of the company law at that time, he must have 20 subsidiaries to form a group.

For a time, Camry became a diversified group spanning 12 industries, including real estate, trade, clothing and other popular industries.

In the past few years, Liu Jia was surprised that only two or three subsidiaries were making profits, and the most profitable one was the most unintentional sprinkled seed. The rate of return on investment was almost 200%.

At the end of the 1990s, it was the beginning of a new round of macroeconomic regulation and control. It was one of the main means to squeeze money and suppress the huge profits of the real estate industry. The development space of the major industries in Camry was squeezed.

Liu Jia had to make a choice.

"The most important thing is cash flow every day". Compared with real estate and trade, the daily cash flow of dental shops is small but steady growth is more sustainable. At that time, private dental clinics were almost empty in China.

Liu Jia believes that this is a new industry with great potential.

In 2000, after losing 40 million, Liu Jia cut off all his subsidiaries and came to Beijing alone to start beating the world with his teeth.

Within two years, he opened 10 branches in Beijing.

In the 6 years after the rapid expansion of the first year, Jiamei only increased 30 stores.

After all, management, equipment, standardization, and so on, all take time to digest.

In the industry of oral chain, the first one is 10, and the second one is 100.

Liu Jia has his own standards for the expansion of enterprises.

What is surprising is the opening of the Jiamei profit and loss account. Although the annual net profit growth is above two figures, the asset liability ratio is "zero".

This is also the most frequently asked question of international investors.

Liu Jia told reporters.

In fact, in the past 13 years, the development of Camry has been growing in a natural way. The funds for rolling development all come from the surplus of the clinic income, and the opening of the surplus surplus business has become the established mode of Jiamei expansion.

2005 became a new turning point.

At this time, Camry has obtained the national chain operation license issued by the health department. This is the first private chain oral hospital licensed by this license. According to the relevant policies, it is necessary to operate for 10 years before it is eligible to apply for this right.

At the same time, the reform of the medical system has also become a hot topic for the whole nation.

Liu Jia is convinced that greater opportunities for expansion are coming.

This prompted Liu Jia to consider the introduction of strategic and institutional investors through private equity financing, and to "Jiamei" laboratory "batch" production, relying solely on the enterprise's own rolling capital accumulation, obviously has been unable to meet the needs of expansion.

Liu Jiaceng tried various financing methods before contacting with international investment institutions.

This includes traditional bank loans and private placement, but the various additional conditions and complicated decision-making processes they put forward make themselves lose the best opportunity.

Instead, the venture capital of light and fast run is a step ahead.

Liu Jia's private financing is the first way to raise money.

In the second half of 2005, Liu Jia planned to join a private enterprise in Shanxi to invest hundreds of millions of yuan in establishing Camry International Hospital in Beijing to locate high-end medical consumers.

But with macroeconomic regulation and control, investment plans have to be put on the shelf.

The bank loan is another channel that Liu Jia considered.

In early 2006, a security group offered to provide a 50 million yuan loan guarantee agreement for Camry's mouth.

But some of the other terms are not acceptable to Liu Jia.

After contacting with international capital, Liu Jia discovered that even if money is different, the meaning and value of it are totally different.

Liu Jia realized that to get through the complications of the expansion period quickly, he needed more support from outside the fund.

In the first place, the first look at the cash flow, and the second is whether it is the leader of the industry, "an international venture capital investor who is talking with Camry told reporters.

His company is planning to invest in a range of new and more traditional areas.

From the very beginning, it has been regarded as a synonym for high technology. Now it has become the most diligent investor in all the "profitable" areas. Venture capital in China has also ushered in a new stage, and the traditional industry has also been infected from high-tech stories until it is catalyzed.

In the past, Xu Liang believed that high technology only had gold. In fact, China's large market and rapid growth, all fields, especially consumer goods and other services, will continue to have opportunities. "Ding Hui's investment partner, Xu Liang, believes that after the 2000 Internet bubble, venture capital and private equity funds are beginning to return to reason. Mengniu, Nan Fu and battery are just the beginning.

Many venture capital experts agree that food and catering, fast moving consumer goods, health care, education and so on are all industries of special interest in venture capital at this stage.

"The most potential is health care and education," said Xie Fang, an investment partner of LIAN. In China, the medical and health industry is a "promising area". The market base is large, and it is still in the initial stage of development, and there is great room for future development.

But the rise of local brands is also a "horse race" process.

The operation of big brands needs a lot of money, which means a lot of capital leverage is needed.

In the meantime, when venture capital enters the capital, it also coordinates international management experience to achieve capital docking and management team internationalization.

Liu Jia knows that whoever wins in this new horse race depends, to some extent, on who can make better use of capital.

"Professional managers from Switzerland and Singapore and International Stomatology experts will come to Jiamei this year," he said.

Liu Jia introduced.

In the reports of several international venture capital investments, international management talents will also be introduced.

These experienced investment bankers know that in order to get the trust of NASDAQ, besides the Chinese concept, it is more important to have the "hard" capability of continuous profitability.

According to the investment bank's recommendations, the first phase of financing is $50 million, and more than 250 clinics can be added to each clinic based on $175 thousand.

"This year plans to add 60 new homes, 100 in the whole country, and 10 new ones in the first half of this year. The speed will accelerate in the second half of the year, and 30% will be carried out through mergers and acquisitions," he said.

For Jiamei Stomatology, 2006 is the most critical year for how to go through second corners.

"The biggest risk is that we don't know what risks are," Liu Jia said. "I hope you can make more comments and find more problems and pour cold water on them."

Now, as we continue to study enterprise failure cases, the financial English learning plan becomes Liu Jia's new curriculum.

"I hope that on the day of the NASDAQ roadshow, I can speak directly to institutional investors in standard English."