Investment + M & A: Differentiation Of Dazheng Capital'S Medical Service Investment

Starting from 2019, Dazheng capital, a local PE investment institution in China, will focus on women and children's medical treatment. In just two years, the team has repeatedly expanded the territory of maternal and child medical services to children's hospitals, maternity hospitals and maternity centers in Shanghai and Beijing, and officially established youaibei medical group ("youaibei"), which is positioned as medium and high-end family, women and children's medical services.

At the beginning of 2021, Beijing Meizhong Airui Cancer Hospital, jointly established by Dazheng capital, a number of investment institutions and senior medical industry entrepreneur Hu Lan, also officially opened. The hospital is located in mingchunyuan, Youlong Road, Nancheng, Beijing. It is the first private tertiary cancer hospital in Beijing.

"Eric (Wang Yu) takes the team to improve the operation and management, so as to improve the level of medical treatment and service, so as to improve the profit level of the group; on the other hand, the investment team will also look for suitable targets along the existing strategies, continue to do some expansion in the first tier cities, and finally be listed in the capital market as a medical group with its own characteristics." In an exclusive interview in April this year, Chen Zhixing, the managing director of Dazheng capital, told reporters of the 21st century economic report.

Road finding differentiation: Dazheng medical service map

In August 2020, Dazheng capital announced for the first time that it had completed its holding investment in Beijing Kyoto children's hospital. At the same time, the medical service map of Dazheng capital also emerged.

Kyoto children's hospital is located in Huilongguan Tiantongyuan area, which is known as the largest community in Asia. There are more than 800000 permanent residents in 63 square kilometers. The Kyoto children's hospital is also the only children's Hospital in Changping District, Beijing, with a permanent resident population of more than 2 million.

According to public information, Beijing Kyoto children's Hospital officially opened in June 2015, and became a designated hospital of medical insurance in Beijing by the end of 2017. It is also one of the only three tertiary children's specialized hospitals in Beijing.

In other words, for the residents living in Huilongguan Tiantongyuan District, taking their children to the children's Hospital for medical treatment, or driving more than 20 kilometers into the urban area, Wang Yu said: "although we are a private hospital, we are a tertiary children's Hospital focusing on discipline construction, and to a certain extent undertake some public medical responsibilities in northern Beijing."

Looking back on the investment boom in medical services, especially after the resumption of capital's massive purchase of hospital assets, Wang Yu and Chen Zhixing repeatedly said in interviews: "private medical care must figure out where their differences lie."

The 21st century economic reporter learned that even within youaibei, the two children's hospitals in Shanghai and Beijing have chosen differentiated management and service strategies due to the different layout of public medical outlets in their regions.

The differences in the definition of Dazheng capital include the differences in service experience between Dazheng and public hospitals, and the differences in operation strategies of hospitals in different regions within the system.

From the perspective of medical quality and academic level, the status of public hospitals in the domestic medical system in the hearts of the public and the attraction of top medical talents can not be shaken. According to the actual situation in the service area, youaibei has formulated the positioning, discipline development planning and differentiated operation strategy of each institution.

In the past few years, one of the key points of the management team of youaibei is to invite retired experts to work full-time, and on the other hand, to require doctors with multi-point practice to come to the hospitals in the platform for consultation. Wang Yu told reporters, "the services we provide may not be the cheapest, but we hope to be able to provide medical services comparable to the level of public tertiary hospitals, and at the same time, we can also provide better medical services than other medical institutions."

The differentiated operation strategy in different regions is reflected in the fact that the hospitals in Shanghai mainly provide high-end and high-end services, while the hospitals in Beijing mainly provide medium and high-end services. Discipline planning also reflects the characteristics of different regions.

The reporter learned that there are branches of Shanghai Children's hospital around Shanghai pubin children's Hospital and Shanghai aierbija obstetrics and gynecology hospital. In this case, the two hospitals mainly improve themselves by focusing on differentiated services. For example, public hospitals can not provide large-scale services such as children's health care due to the limitation of space, time and personnel. The children's health (developmental behavior Pediatrics) is one of the key development departments in pubin children's hospital.

Investment + M & A: Zheng war in Xinjiang

Investment and merger of hospital assets is not uncommon in Chinese market, the latest wave appeared in 2015.

PwC has divided the 10-year period of China's social capital investment in domestic hospitals into three stages: the preparation period of 2010-2014, the peak period of 2015-2016 and the adjustment period of 2017-2019. The team predicted in February 2020 that with the continuous adjustment of medical investment, capital will be concentrated in high-quality target transactions with mature business model and strong profitability. In line with the ecological construction of investors, strategic layout of the target will be favored.

In fact, since 2019, capital investment in the field of hospital M & A has cooled down, and funds have begun to concentrate on high-quality targets. Under the impact of the new crown epidemic in 2020, the funds that once put their enthusiasm into medical services began to move to popular tracks such as new drug research and development and innovative equipment. Medical service, especially hospital asset investment, has become a game for a few people, and industry integration has become a new main line under this theme.

Dazheng capital's investment in Kyoto children's hospital is carried out in such a big environment. The reality of hospital equity decentralization makes it difficult to realize the incentive. Many shareholders also expressed their intention to withdraw due to the expiration of the fund. "If it wasn't for this, Kyoto would not be an asset that would have been sold on the shelf," Chen recalled trading in 2020

Previously, an interviewee told reporters that the investment institutions with sufficient capital and operation capacity to compete for high-quality hospital assets in the Chinese market "can be counted by one hand". Dazheng capital is one of the few players. The team first laid out a number of high-quality medical service assets in Shanghai, and then bought Beijing Kyoto children's Hospital in Beijing, the second battlefield of medical territory.

The 21st century economic reporter learned that in the medical service investment strategy of Dazheng capital, they will continue to seek high-quality targets for youaibei and form a "satellite clinic" within the youaibei system. On the one hand, these medical institutions will be able to improve the service density of high-quality medical resources in the youaibei system by enabling them. On the other hand, these new institutions can also become the entrance of the whole access to user resources.

Chen Zhixing told reporters: "one of our strategies for investment in medical services is to acquire shares of more mature hospitals and brands, and obtain growth income through operation and management. The other is to make minority equity investment in hospitals with specialty characteristics in the early stage, including the establishment of enterprises through cooperation with senior practitioners in the industry. "

From the current layout of Dazheng capital's medical service investment, Dazheng capital has jointly established a Beijing tertiary cancer hospital with several investment institutions and senior medical industry entrepreneur Hu Lan.

Up to now, Dazheng capital's investment in the whole medical sector can be divided into two parts: medical services and medical innovation. Medical service is dominated by holding merger and acquisition, and its representative project is youaibei, which focuses on women and children. The field of medical innovation mainly focuses on early projects, and representative projects include mitral valve R & D enterprise Yixin medical and fund testing company genebank.

The reporter learned that the services provided by big Zheng capital in youaibei platform will be expanded to the field of children's health care. At the same time, Dazheng capital continues to lay out high-quality hospital assets through investment and M & A, including possible medical service asset layout outside women and children and tumor. With the increasing layout of medical services and medical innovation, the synergy effect between the projects will gradually appear.

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