General Medical "Quantity", "Quality" And "Moat Challenge": Total Market Value Increased 32 Times In 14 Years, 90% Of Net Profit Depends On Two Star Hospitals

After 804 days of orthodontic treatment, Xiao Liu, a post-90s girl, finally removed the ceramic bracket orthodontic appliance and completed the orthodontic treatment in the Chengxi Branch of Hangzhou stomatological hospital. "The total cost before and after treatment is about 25000-30000 yuan, including the cost of braces, treatment, tooth extraction, various materials, etc.

Hangzhou stomatological hospital Chengxi Branch is a hospital of Tongce medical (600763. SH), the leader of A-share chain stomatological hospital.

Xiao Liu's experience reflects a big business behind his small teeth.

Since the backdoor listing in 2007, Tongce medical started from building 3 stomatological hospitals and purchasing 4 stomatological hospitals, and gradually developed into a large oral medical group with more than 50 oral medical institutions.

In 14 years, the total market value of the company has also increased from 2.3 billion yuan in September 2007 to 75.7 billion yuan in September 2021, with the total market value increasing 32 times.

In the process of replication and expansion with the mode of "regional general hospital + branch hospital", Tongce medical also proposed the "Dandelion plan" to build 100 hospitals in Zhejiang Province in the next three to five years. Some people questioned whether Tongce medical could support its market value of 80 billion yuan with 1.318 billion yuan of revenue and 351 million yuan of net profit in the first half of 2021?

In this regard, on September 16, 21st century economic reporter, as an investor, called Tongce medical and securities affairs department to further understand the progress of "Dandelion project", and the other side said, "the new hospital is a new hospital" In general, the company's brand and market reputation are relatively stable, and they are familiar with the operation and management process of new hospitals. The cultivation cycle of new hospitals is still faster than that of the previous two years. "

According to the 21st century economic report, Gu Yajun, former vice president of Pinghai Hospital of Hangzhou stomatological hospital, one of the core hospital districts of Tongce medical, has left his post in the past two years. In addition, in the first half of 2020, the former president of Qingchun Hospital of Hangzhou stomatological hospital has also left his post and set up his own stomatological clinic.

With the pressure of scale expansion and the hidden worry of brain drain, can the general medical service, known as "dental grass", keep the "moat"?

Two star hospitals support 90% net profit

Tongce medical has always adhered to the mode of "regional general hospital + branch hospital" for replication and expansion.

It has three general hospitals of Hangzhou stomatological hospital Pinghai hospital, Chengxi hospital and Ningbo stomatological hospital in Zhejiang Province. Shaoxing regional hospital group has also been established. At the same time, Tongce medical said that after the regional general hospital has formed brand influence in the region, it will rapidly open branch hospitals.

Tongce medical said, "Hangzhou stomatology Pinghai hospital is the oral hospital with the largest monomer area and the highest operating income in the company system. The West Hospital District of Hangzhou stomatology hospital is the pioneer of innovation and development of the company, and the output of single tooth chair is the highest."

According to the latest data, Tongce medical has more than 50 oral medical institutions.

Although it has more than 50 stomatological institutions in hand, the core profits of Tongce medical mainly come from two hospitals in Zhejiang Province, and other branches still need to make efforts.

From 2017 to 2020, the revenue of Tongce medical was 1.180 billion yuan, 1.546 billion yuan, 1.931 billion yuan and 2.088 billion yuan, respectively, with a year-on-year increase of 34%, 31%, 25% and 8%; The net profit attributable to the parent company was 217 million yuan, 332 million yuan, 467 million yuan and 493 million yuan respectively, with a year-on-year increase of 60%, 53%, 40% and 5%.

In the first half of 2021, Hangzhou Stomatological Hospital Group Co., Ltd., a wholly-owned subsidiary of Tongce medical, realized a revenue of 356 million yuan and contributed a net profit of 220 million yuan; In other words, Hangzhou Pinghai and hangkou Chengxi courtyards contributed 47% of the revenue (1.318 billion yuan) in the first half of 2021 and nearly 90% of the corresponding net profit (351 million yuan).

From the perspective of business structure, the business of Tongce medical can be divided into four departments: planting, orthodontics, pediatrics and comprehensive department, among which orthodontics and pediatrics have great development potential.

In this context, its performance risks are also very typical.

Under the background of relying on two "profit cows" of Pinghai hospital district and Chengxi Hospital District of hangkou, the loss of core doctor resources of general policy medical may become a potential hidden danger.

In particular, unlike Ophthalmology, which relies more on equipment, dentistry relies more on high-quality dental resources.

According to the 21st century economic report, Gu Yajun, former vice president of Pinghai Hospital of Hangzhou stomatological hospital, as one of the star hospitals in Hangzhou area of general medical treatment, has left his post; In addition, the former president of Qingchun District of Hangzhou stomatological hospital has also left his post and established his own dental clinic in April 2020.

In addition to the departure of two doctors at the president or vice president level, during this process, the reporter learned that many doctors, medical technicians and nurses left hangkou hospital with the core backbone.

Loss or potential risks of core doctors

On September 14, the reporter of 21st century economic report asked the customer service of Pinghai District of hangkou for confirmation, and got the news that Gu Yajun had left his job. "He did not do it, he has left." for the specific destination, the customer service said that he did not know.

Some investors disclosed to the 21st century economic reporter that Tongce medical has great pressure on the performance evaluation of doctors in its hospitals, prompting many doctors to leave.

On September 8, a staff member of Hangzhou Stomatological Hospital of Tongce Medical Co., Ltd. held different opinions. "Tongce does have an assessment on its hospitals", but she does not know the specific assessment objectives. In her opinion, "this is an individual phenomenon. Compared with other outpatient clinics, stomatologists will choose to open their own clinics."

In terms of medical resources and talent reserve, Tongce medical is full of confidence in 2020 annual report.

At present, the company has a number of core experts with rich clinical experience, including 475 doctoral supervisors, master tutors, doctors, masters and clinical experience. There are 3064 health technical personnel, including 1381 doctors, 169 medical technicians and 1514 nurses. The medical services include periodontal, implant, orthodontic, prosthetic, dental pulp, maxillofacial surgery and children's mouth The team of doctors came from Zhejiang University, Peking University, the Fourth Military Medical University, Wuhan University and other well-known colleges and hospitals. "

At the same time, the quality of service is also questioned by some consumers.

"Although some doctors' skills are OK, they always feel that they are running, not for the purpose of good service," another consumer who once had orthodontic treatment in a branch hospital of hangkou told 21st century economic news on September 9.

After searching on the local forum in Hangzhou, we can still find an article entitled "my painful experience of orthodontic treatment with braces for 7 years in Hangzhou stomatological hospital", complaining that "the doctor's attitude towards patients is not good enough, and the results of orthodontic treatment are still unsatisfactory after 7 years of orthodontic treatment".

"Some (stomatological) patients will have a preference for large-scale comprehensive public hospitals, but if they pursue an independent medical environment, they may choose some private hospitals. Private hospitals pay attention to operation and make brands, but there will also be some places that are not well done." on September 14, a person from a large stomatological hospital in East China told the 21st century economic report.

New branch still needs time to cultivate climbing

In the next 3-5 years, the "Dandelion plan" of 100 hospitals in Zhejiang Province will be an important step in the overall layout of Tongce medical in Zhejiang Province.

In December 2018, Tongce medical and Hangzhou Stomatological Hospital Group officially launched the "Dandelion plan", and 10 new branches including Shaoxing Keqiao, Huzhou Deqing, Lishui Liandu, Hangzhou Linping and Jinhua Wucheng were signed.

By the end of 2020, Tongce medical said that with the gradual implementation of the first phase of "Dandelion plan", the number of hospitals in Keqiao, Deqing, Putuo and other Zhejiang provinces has reached 37, and Jiande, Binjiang, and future science and technology city are respectively in the stage of preparation, construction and acceptance. In addition, the company has 21 branches which have completed the project and are about to start construction.

In addition, in the external aspect of listed companies, Tongce medical mentioned that it participated in the investment of new large stomatological hospitals in Wuhan, Chongqing, Xi'an and Chengdu through stomatological medical fund. Among them, Wuhan cunji stomatological hospital was officially opened in November 2018; Chongqing cunji stomatological hospital has been put into operation in February 2019; Xi'an cunji medical center is composed of Stomatology, ophthalmology and obstetrics and gynecology. It will start trial operation in October 2020; Chengdu cunji stomatological hospital will be put into trial operation in the second half of 2021.

At present, the expansion of Tongce medical in new branches of Zhejiang Province and hospitals outside the province may be the most concerned by the market.

"How is the dandelion hospital going up in business? Has it achieved a break even point?"

On August 11, 625 analysts and investors including GF Securities, Guoyuan securities and northeast medicine paid attention to this core issue when they investigated general medical.

On the same day, Tongce medical company further disclosed the progress of dandelion plan when replying to the questions raised by Tongce Medical Co., Ltd., "at present, 38 companies have been operated, established and planned, and 22 companies have been included in the semi annual report (including 16 businesses and 6 completed industrial and commercial registration). Among them, 16 have been opened (9 of them have achieved profits) 13 companies are in the process of renovation, 2 have signed leases, and 7 have completed the relevant site selection planning, with a total of 38 companies. The overall revenue of dandelion level is 83.22 million, and there are 13 completed delivery within the year. "

Tongce medical also mentioned that "in the first half of this year, seven new businesses (Taizhou, Tonglu, hehe, Lin'an, Jiaxing, Wenzhou, Fuyang) have been opened, and three (Taizhou, Tonglu, and hehe) have achieved profits. Fuyang, Jiaxing and Wenzhou have opened in March, March and July respectively. Follow up to see whether they can make profits at the end of the year."

For the new branch hospital of Zhejiang Province, Tongce medical is described as "basically, the cultivation period is 0.5-2 years."

There is a market view that the new branch of Tongce medical is still in its infancy and still needs a long market cultivation period.

On September 16, 21st century economic reporter, as an investor, called Tongce medical and securities affairs department to further understand the progress of the company's "Dandelion plan". The other side said, "what we have at present is the content mentioned in the semi annual report, (new hospital) In general, the company's brand and market reputation are relatively stable, and they are familiar with the operation and management process of new hospitals. The cultivation cycle of new hospitals is still faster than that of the previous two years. "

Fan Wenjing, executive partner of gaotejia investment, pointed out to the 21st century economic reporter that "as long as the new hospital is properly located, the right doctors are found, and the mature mechanism is added, the cultivation cycle will not be too long in theory."

However, fan Wenjing also pointed out that there are still potential challenges to general medical care, "On the one hand, the core problem of dental chain institutions is the high human cost in the cost composition. The larger the chain scale, the more management levels, the higher the cost; on the other hand, raw materials and consumables rely on import, which is relatively expensive; in addition, we should also consider some risks and uncertainties of the overall medical policies and regulations for private medical institutions."

In 2020, in addition to several general hospitals, Tongce medical disclosed the performance of Quzhou stomatological hospital, Zhuji stomatological hospital and Yiwu hangkou outpatient department. The three hospitals achieved net profits of 8.639 million yuan, 25.0425 million yuan and 19.3185 million yuan respectively.

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