Where Is The Next Stop For The Leader Of High-End Medical Services To Go?

? ? ? Recently, NFH, the operator of harmony medical, announced that it had signed a final agreement on privatization. After the completion of the transaction, harmony family medical will be beneficially owned by Xinfeng Tianyu group, vivo capital, Fosun Pharmaceutical, Warburg Pincus investment, Goldman Sachs assets, hanergy PE and several other investors.

Fosun Pharmaceutical also announced on August 5 that NFH, an enterprise invested by Fosun industrial, a holding subsidiary, plans to privatize and delist from the NYSE through merger. According to the privatization transaction plan, NFH plans to merge with merger sub, a special purpose company established for this privatization transaction. NFH will become an indirect wholly-owned subsidiary of HoldCo as the surviving company after the merger, and then delisted from the NYSE.

? ? ? It is reported that the equity value of the trading company is about 1.582 billion US dollars. Under the merger agreement, the outstanding common shares of the company will be cancelled in exchange for cash of $12.00 per share (the "merger consideration per share"). The merger is expected to be completed in the fourth quarter of 2021.

This is the second time that harmony house has been privatized from the US stock market in seven years. According to the analysis of the 21st century economic reporter, the listing of U.S. stocks is the most convenient exit channel for companies with dollar structure, and the listing conditions are relatively relaxed. However, if the valuation after the listing of US stocks fails to meet the expectation, the privatization return to resource integration, and then seek a second listing may be the main consideration of Harmony House at present.

At the same time, according to market news, harmony home will be listed on China's A-share sci-tech innovation board or H-share this year after privatization, and has prepared for pre IPO Financing. 21st century economic reporter confirmed this with Wu Qinan, co-founder and CEO of Xinfeng Tianyu, who said he would not comment. However, before last year's privatization, Wu Qinan said that new wind medical may be listed in Hong Kong for a second time in 2021.

Deeply ploughing the Chinese market for more than 20 years

Harmony home is one of the most famous brands in China's medical service industry. Its initial development can be traced back to the 1990s. In 1994, Hutchison's parent company, U.S. - China mutual benefit, was listed on NASDAQ. At first, the company mainly acted as an agent for imported medical devices.

In the process of in-depth understanding of the Chinese market, Li Bijing, the founder of us China mutual benefit, saw the market gap and development opportunities in China's private high-end hospitals. So in 1997, the Jewish American and the Chinese Academy of Medical Sciences jointly founded the first united family hospital, which was established in Beijing.

After more than 20 years of development, harmony family has operated 10 general hospitals and 16 satellite clinics in all four first tier cities and some second tier cities in China. There are more than 800 doctors, more than 2000 consultants and more than 1000 registered beds.

Harmony home in the rapid expansion of business at the same time, the capital market road has been several twists and turns. In 2014, TPG, Fosun Pharmaceutical and Li Bijing completed the privatization of us and China mutual benefits for the listing of US stocks. After the completion of the transaction, Fosun Pharmaceutical, TPG and Li Bijing held 48.65%, 48.14% and 3.21% of the shares respectively. According to Fosun Pharmaceutical's announcement at that time, the investment was no more than 224 million US dollars.

For TPG, the medical and health industry has always been the focus of its investment in the world and Asia. The team focuses on building a strategic platform with significant growth potential. Past and existing medical service institutions invested include Parkway Pantai, healthscope, te healthcare, Manipal health, ASIRI hospitals, etc.

Five years later, in July 2019, TPG announced that it would sell its shares in harmony healthcare to Xinfeng Tianyu, a transaction valued at about $1.3 billion. After the transaction, Xinfeng Tianyu became the operator of harmony family, and the existing management of harmony family and Fosun medicine still retained part of the equity.

It is understood that Xinfeng Tianyu was listed on the New York Stock Exchange on June 28, 2018, and it is also the first non US "blank check" company listed on the NYSE, namely the so-called "special purpose acquisition company" (SPAC). Such companies have no assets, only cash, and the task after listing is to find non listed companies with high growth prospects and merge with them to obtain financing and listing.

In addition, it is worth mentioning that the chairman and co-founder of Xinfeng Tianyu are former financial secretary of Hong Kong and CEO of Hong Kong Nanfeng group. After the acquisition, Liang Jinsong will be the chairman of the company's board of directors, and Li Bijing, the founder and CEO of harmony family medical, will be the CEO of Xinfeng Tianyu medical. Wu Qinan, CEO and co-founder of Xinfeng Tianyu group, will lead the new Executive Committee of the board of directors to help support and lead the management to further promote the development of harmonious family medical.

On December 19, 2019, Xinfeng Tianyu announced that it had completed the acquisition of harmony medical. Xinfeng Tianyu changed its name to Xinfeng medical group and its stock code changed to "NFH". At that time, its market value reached 1.4 billion US dollars.

The performance is in a state of loss, and the private medical market still has a large space for growth

Less than two years after it was listed through spac, harmony house once again faced the situation of privatization from the US stock market. Industry insiders believe that the main reason behind this is that its performance in the US stock market is lower than expected. After privatization, resource integration and then listing on Hong Kong stock or A-share may be the next step for Harmony House.

At the same time, it should be noted that harmony family is still in a state of loss. According to the data, in 2020, the income of fresh air medical (harmony family) will reach 2.261 billion yuan, and the net loss will reach 532 million yuan.

In 2021, harmony family will continue to increase investment in hospital construction. According to the company's official website, in 2021, harmony family Beijing North women's and children's Hospital, located on Datun Road in Beijing, will open in the first half of the year; Located in the central business district of Futian, Shenzhen, with a total floor area of 64000 square meters and a planned 350 beds, Shenzhen Xinfeng harmonious family hospital will be put into operation in the second half of the year, with a total investment of about 2.5-3 billion yuan.

According to the 21st century economic report, the construction of the new hospital, the expansion and improvement of specialized business, and the impact of the new crown pneumonia epidemic are the main reasons for the loss of harmony family at this stage. However, from a long-term point of view, there is still a large room for growth in the future.

According to relevant data statistics, the scale of China's private medical market will reach 93 billion US dollars in 2019, with an annual compound growth rate of more than 20%, which is a good supplement to public hospital resources. In terms of penetration rate, the penetration rate of China's private medical care is far lower than that of developed countries and some developing countries, and there is a large space for market expansion. In addition, the state further opens up the medical service industry and encourages social capital to actively participate in running medical services, which is conducive to the development of private hospitals.

Wu Xi, head of the big health industry at third bridge, said in an analysis of the 21st century economic report that from the perspective of consumption upgrading, there will be a great market demand for institutions like harmony family to provide high-quality medical services. However, it is worth noting that this demand is still relatively small, and the consumption upgrading of medical services does not occur in all cities.

For example, in Shanghai, because many foreigners and Shanghai residents have purchased commercial insurance, which can cover the medical expenses in harmony family, the operation of local harmony family hospital is relatively good. However, in Tianjin, Qingdao and other places, there are not so many people who buy commercial insurance. If they need to buy high-end medical services at their own expense, people's willingness is not so strong. From the payment system, it is not enough to support the good operation of the local harmonious family hospital, and there is no sign of profit improvement in the short term.

"The service quality of harmonious family is very high, and the medical quality can also be solved through doctors' multi-point practice and the introduction of external resources, but the patient payment system on the demand side is the core of the problem." Wu Xi said, "next, harmony family may need to slightly control the pace of expansion in the sinking market, which is conducive to cost control. From the perspective of business lines, in addition to the expansion of general practice, the core maternal and child health care field can also be extended upstream and downstream to do assisted reproduction, child-bearing center and postpartum recovery. The customer price and profit in this area are also quite considerable. "

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