New Journey Health Technology Group Co., Ltd. Unveils Prospectus Following Rebranding from Hengkang Medical, Embracing Dual-Engine Strategy of 'Medical Services + Pharmaceuticals'

On the evening of September 23, Hengkang Medical (002219) announced that, with the approval of the Shenzhen Stock Exchange, its company name would be officially changed from “Hengkang Medical Group Co., Ltd.” to “New Journey Health Technology Group Co., Ltd.” effective September 26. The stock abbreviation would be changed from “Hengkang Medical” to “New Journey,” and the English abbreviation from “Hengkang Medical” to “New Journey.”

The announcement stated that the name change to New Journey is based on the company’s strategic development needs, while also accurately reflecting adjustments in its equity structure. By leveraging the brand influence and resource advantages of its controlling shareholder, New Journey Health Group, the company aims to enhance its brand image and market presence, thereby promoting higher-quality development.

New Journey is the first pharmaceutical listed company in Gansu Province. It was listed on the A-share market in 2008, formerly known as "Gansu Duyiwei Biopharmaceutical Co., Ltd." The company owns the well-known Chinese proprietary medicine "Duyiwei Capsules." Since 2013, the company has expanded its presence to 11 hospitals with nearly 8,000 beds through mergers and acquisitions, making medical services its core industry.

Since 2018, the former Hengkang Medical has been mired in a debt crisis. In May 2020, it was subjected to a “delisting risk warning,” and its stock name was changed to *ST Hengkang. In August 2020, a petition for reorganization was filed for *ST Hengkang, which was subsequently accepted by the Longnan Intermediate People’s Court. In December 2021, under the guidance of the Longnan Intermediate People’s Court, Beijing New Journey Health Industry Group Co., Ltd., a wholly-owned subsidiary of New Journey Health Group, was selected as the restructuring investor for Hengkang Medical. This move prevented *ST Hengkang from being directly delisted or undergoing bankruptcy liquidation, marking a new chapter for the company. Following equity transfer and the conversion of capital reserves into share capital, the reorganization plan for *ST Hengkang was declared fully implemented in June 2022.

During this period, the market capitalization of *ST Hengkang doubled from RMB 8 billion on January 4, 2022, to RMB 15.9 billion on July 4, 2022. The company’s performance in the first half of 2022 was particularly notable: operating revenue increased by 2.8% year-on-year, and net profit attributable to shareholders of the listed company turned positive, shifting from a loss of RMB 49.11 million in the first half of 2021 to a profit of RMB 50.38 million in the same period of 2022. Additionally, its subsidiaries, Xuyi County Traditional Chinese Medicine Hospital and Lankao First People's Hospital, were successfully upgraded to national Grade III general hospitals. In July 2022, *ST Hengkang successfully removed the “*ST” designation from its stock name.

New Journey Health Group is a reformer, innovator, and leader in China’s healthcare sector. Its business spans medical services, elderly care, and pharmaceutical manufacturing. The group holds controlling interests in and manages nearly 40 Tier-II-and-above hospitals and 200 primary healthcare institutions across nearly 20 provinces and municipalities nationwide, with a total bed capacity of 30,000.

Following the rebranding, New Journey will continue to build a dual-engine industrial pattern driven by both “medical services” and “pharmaceuticals.” In the medical services sector, New Journey implements a strategic layout of medical institutions centered on regional medical centers. Relying on Grade 3A general hospitals, it creates an innovative “1+N” service model—namely, a comprehensive main hospital plus specialized branch hospitals—focusing on diseases such as cancer, cardiovascular conditions, cerebrovascular disorders, and orthopedic issues, thereby addressing new demands arising from national population aging. By continuously investing in technology, talent, and capital, New Journey aims to develop its subordinate hospitals into healthcare institutions with distinct competitive advantages in their respective regions, thereby establishing its own strong brand identity.

In the pharmaceutical sector, New Journey will leverage the nationally recognized well-known trademark “Du Yi Wei” as a platform to integrate upstream and downstream industrial chains, expand its portfolio of health consumer products, and consolidate high-quality industry peers. By strengthening and expanding its traditional Chinese medicine (TCM) business, the company aims to transform from a pharmaceutical IP to a consumer-oriented IP and upgrade its brand substance, thereby establishing TCM as its second growth curve.

Lin Yanglin, CEO of New Journey Health Group and Chairman of New Journey (002219), stated that from its successful bankruptcy reorganization to turning profits from negative to positive, and finally to today’s renaming and upgrade as “New Journey,” the former Hengkang Medical has achieved a leap from distress relief and operational stabilization to high-quality development. This milestone represents an important measure by New Journey Health Group to implement the Healthy China Strategy, address the prominent imbalance and inadequacy of primary healthcare resources, and enhance the supply level of primary medical services. It also constitutes a significant deployment to protect and promote the high-quality development of Traditional Chinese Medicine (TCM). New Journey will continue to strengthen and optimize its dual-driven industrial pattern of “healthcare + pharmaceuticals,” integrate into national development strategies, and make greater contributions in responding to population aging, serving rural revitalization, and promoting common prosperity.