Ailon Technology: A Healthcare Automation Pioneer Founded by a Former Nurse, Listed as National 'Specialized, Sophisticated, Distinctive, and Innovative' SME Giant
Recently, Iron Technology (688329.SH), a company specializing in the intelligent management of medical supplies and the first to be listed on the A-share market in this sector, released its 2021 semi-annual report. The financial report shows that Iron Technology achieved a total operating revenue of RMB 130 million in the first half of 2021, a year-on-year increase of 44.4%; the net profit attributable to shareholders of the parent company was RMB 18.613 million, a year-on-year increase of 39.9%; earnings per share were RMB 0.28. As of the end of June 2021, the value of contracts on hand amounted to RMB 302 million (including tax), compared with RMB 156 million (including tax) for the same period in 2020, representing a year-on-year increase of 93.59%, which provides assurance for the company's continued revenue growth.
The aforementioned financial data demonstrate the sustained enhancement of Iron Technology’s profitability. The company’s management stated, “In the first half of 2021, although there were resurgences of the epidemic in certain cities and regions across China, these outbreaks were rapidly and effectively contained, resulting in a relatively stable domestic epidemic situation and a basic return to normalcy for our business operations. Under the leadership of the Board of Directors, the management team adhered to the development strategy and operational plans established at the beginning of the year. In the field of intelligent medical supply chain management, we solidified our technological advantages, thereby enriching application scenarios and extending our product portfolio. Furthermore, by increasing market investment and expanding the breadth and depth of our sales channels, we achieved new breakthroughs in sales performance.”
When it comes to Iron Technology, the first thing to mention is its key leader, Chairwoman Ms. Zhang Yinhua.
Zhang Yinhua began her career as an operating room nurse and worked on the front lines of healthcare for many years, accumulating extensive experience in the medical industry. Around 2000, information technology and automation technologies began to be applied in the pharmaceutical sector. Zhang, who possessed a strong curiosity for emerging innovations, developed a keen interest in these advancements. In 2002, she traveled to Singapore and other locations for study and clinical research. She became deeply convinced that there was significant potential for the application of such technologies in domestic hospitals. However, at that time, the concept of pharmacy automation remained ill-defined in China, and there were no overseas products suitable for adaptation to Chinese hospital settings.
The bold idea of “independent R&D” took root in Zhang Yinhua’s mind at that moment. Subsequently, Zhang Yinhua collaborated with a professor from Beihang University to jointly develop the first-generation automated pharmacy system. It was through this collaboration that Iron Technology accumulated its initial technical expertise. In 2007, Iron Technology’s first automated pharmacy system was successfully piloted at a hospital in Suzhou.
Since its establishment, Iron Technology has been dedicated to providing intelligent management system solutions for medical supplies, continuously deepening its expertise in the medical supplies sector while gradually expanding its product lines and application scenarios. Mr. Xu Li, General Manager of Iron Technology, has divided the company’s 15-year development history into four stages:
Phase I: 2006–2010, the stage of accumulating initial R&D experience; in 2007, developed and manufactured the first-generation automated medication dispensing systems and other products, rapidly entering the domestic market.
Phase II: 2010–2016, with outpatient products as the core, the company continuously explored and grew in R&D, production, and sales, gradually launching outpatient/emergency automated pharmacy products such as high-speed dispensing machines and intelligent storage and retrieval machines, constantly optimizing its product structure, and creating a “hospital-wide, integrated” overall solution;
Phase III: 2016–2019. With the continuous introduction of industrial policies such as the Quality Management Specifications for Centralized Preparation and Dispensing of Intravenous Medications, the company, guided by the practical needs of medical institutions at all levels and building upon its foundation of automated outpatient/emergency pharmacies, gradually enriched its product portfolio. It developed and launched a series of products including automated pharmacies for intravenous admixture services (IVAS), automated ward systems, and automated logistics solutions, thereby assisting medical institutions at all levels in improving regional infrastructure and transforming traditional operational models. During this phase, Suzhou Iron Technology Co., Ltd. leveraged its advantages in R&D capabilities, management systems, cost control, and after-sales maintenance. By fostering innovation and continuously enhancing soft power areas such as product design, technological R&D, production process engineering, and quality inspection, the company gradually gained recognition from renowned domestic medical institutions and pharmaceutical supply chain service providers, leading to rapid business growth.
Phase IV: 2019–Present. The company has continuously enriched its in-hospital product portfolio and expanded into out-of-hospital extended application scenarios. It has developed and launched new intelligent products, including Urban Central Pharmacies, Unmanned Self-Service Pharmacies, Intelligent Personalized TCM Preparation Systems, and Integrated Hospital Dispensing Warehouses. With a core focus on the intelligent management of medical supplies, the company has broadened the application scope of its products, while project scale has continued to expand.
Notably, due to her previous professional experience, Zhang Yinhua has always remained deeply committed to the nursing profession, integrating this dedication into her current endeavors. Currently, Iron Technology’s business portfolio includes smart ward solutions, which have benefited numerous healthcare professionals.
“Simple, pragmatic, yet courageous and pioneering.” These are the qualities that people see in Ms. Zhang Yinhua.
“For young people who want to start a business or transform, in addition to having bold ideas, they must also have the courage to ‘break’ with the past. Doing one thing while thinking of another will ultimately lead to poor results in everything; the most important thing is persistence—persist in learning and keep moving forward. Five years makes you a professional, ten years makes you an expert.” This is Zhang Yinhua, the helm of Iron Technology’s message to young people, and also her self-motivation over more than ten years of entrepreneurship.
The advanced nature of Iron Technology’s products has also garnered favor from numerous investment institutions. Iron Technology was the first investment case for Longmen Capital. Wang Haining, Founding Partner of Longmen Capital, stated that Iron Technology is a pioneer in the automated pharmacy industry. Traditional hospital pharmacy management suffers from many pain points, including high error rates and significant waste of talent, whereas automated pharmacies have greatly improved management efficiency. The founding team of Iron Technology comes from the frontline of hospital management and has a deep understanding of hospital pain points, ensuring their products closely align with hospital needs. In recent years, Iron Technology’s product system has become increasingly comprehensive, expanding from automated pharmacies to automated wards and automated logistics, establishing it as a leading developer in China of fully intelligent material management systems and overall solutions. “We strongly agree with Iron Technology’s business direction and product logic. We invested in Iron Technology in the early stages of our fund’s establishment and are delighted to have accompanied the company through its rapid growth and successful IPO.”
The medical supplies management sector, in which Suzhou Iron Technology Co., Ltd. operates, constitutes a critical component of smart hospital development. Currently, pharmaceuticals, sanitary materials, and other supplies account for the largest proportion of total costs in general hospitals. As pressure on medical insurance funds intensifies, the operating environment for medical supply vendors is becoming increasingly challenging, while hospitals’ profit margins are gradually shrinking. Traditional medical supplies management models, which rely heavily on labor-intensive manual processes, can no longer meet current managerial demands.
Driven by both internal and external factors, this industry is poised for significant growth: there is a strong endogenous demand for modern intelligent management of medical supplies, which aims at lean operations and leverages informatization and automation as key enablers, making the adoption of lean management an urgent priority. Meanwhile, the successive issuance of policy documents encouraging and guiding the intelligent management of medical supplies has created a favorable policy environment for the industry’s development.
Although there is no publicly available industry research data for the niche sector of medical supplies management, making it currently impossible to estimate this nascent, non-incumbent market, we can gain insights by examining a business segment of Suzhou Iron Technology Co., Ltd. Taking the automated pharmacy market as an example, its current penetration rate remains very low, and Suzhou Iron Technology’s primary customers continue to be newly built tertiary hospitals.
Regarding this point, Mr. Xu Li stated: “Investors who have followed our company once asked whether we had estimated the approximate market size for automated dispensing machines if coverage were extended to all hospitals at Level II and above nationwide. Our understanding is as follows: There are approximately 2,900 tertiary hospitals and 12,000 secondary hospitals in China, totaling around 15,000 institutions. Based on a conservative estimate of RMB 5 million per hospital, the total market size would reach RMB 75 billion. Therefore, long-term investment in China’s healthcare sector is unquestionable. Lean operational management is a goal pursued by major medical institutions, and we believe the growth potential in the sector where Suzhou Iron Technology Co., Ltd. operates is substantial.”
Since its establishment, Iron Technology has consistently prioritized technological research and development (R&D) and reserves as a key factor in enhancing its core competitiveness. Financial reports indicate that in the first half of 2021, Iron Technology’s R&D expenses amounted to RMB 17.7721 million, representing an R&D expense ratio of 13.62%, while the overall gross profit margin of its products stood at 41.7%. In terms of intellectual property, Iron Technology has mastered comprehensive R&D capabilities for both hardware and software in the field of intelligent medical supply management, along with multiple core technologies, and has been honored with the “China Patent Excellence Award” by the China National Intellectual Property Administration. To date, the company and its subsidiaries have obtained 74 software copyrights and 375 patents, including 157 invention patents (one of which is a PCT international invention patent), marking the highest number of patents in the industry.
Suzhou Iron Technology Co., Ltd. has also received official recognition and affirmation for its technological advancement, scale of business expansion, and exemplary development quality. On July 19, 2021, the Ministry of Industry and Information Technology announced the third batch of “Little Giant” enterprises specializing in refined, specialized, distinctive, and innovative fields, with Suzhou Iron Technology Co., Ltd. included on the list.
“Little Giant” enterprises characterized by specialization, refinement, differentiation, and innovation are leading companies that focus on niche markets, possess strong innovation capabilities, hold high market shares, master key core technologies, and deliver superior quality and efficiency. “Specialization” refers to professional focus; “refinement” to meticulous management; “differentiation” to distinctive features; and “innovation” to strong independent R&D capabilities. These criteria align closely with Suzhou Iron Technology Co., Ltd.’s consistent development philosophy of “independent R&D, lean manufacturing, and continuous innovation.” Currently, Suzhou Iron Technology Co., Ltd. serves over 800 healthcare institutions across China, including more than 400 Grade III Class A hospitals, and has established an after-sales service network covering all 30 provinces, autonomous regions, and municipalities directly under the central government in China, providing 24/7 service response 365 days a year.
Since its listing on the STAR Market of the Shanghai Stock Exchange on March 29, 2021, Iron Technology has entered a new phase of development, assuming greater responsibilities to achieve win-win outcomes for customers, employees, society, and investors. Xu Li stated, “The successful IPO holds significant importance for the company’s development. Leveraging the power of the capital markets, the company will expand production capacity for its core business and optimize its product portfolio. We aim to comprehensively enhance our overall competitiveness and corporate value, thereby maintaining our leading edge.”
Over the past six months, Suzhou Iron Technology Co., Ltd. has achieved new innovations in its intelligent pharmacy warehouse business sector, successively securing project contracts for two large-scale integrated intelligent dispensing warehouses, with a cumulative value of RMB 92.65 million. These projects integrate resources within hospital pharmacy departments to enable resource-sharing services, covering pharmaceutical care management, automated equipment, pharmacy personnel, and medical information systems. By coordinating relevant medical resources across the entire hospital, these solutions improve resource utilization efficiency, establish hospital-wide closed-loop medication management, and better provide patients with safe, efficient, and rational pharmaceutical care services. Meanwhile, they reduce medication-related operational costs, ultimately lowering medical expenses for patients.
“Iron Technology’s original mission was to popularize intelligent medical technology, making advanced technologies affordable and accessible for more customers. We have been consistently fulfilling this mission,” said Xu Li. Looking ahead, Iron Technology will continue to deepen its expertise in the intelligent management of medical supplies, fully leverage its role as an industry leader, increase investment in innovation, enhance innovative capabilities, and improve specialized operations and refined outputs. The company will actively participate in upstream and downstream collaboration within the industrial chain, boost the competitiveness of both the enterprise and the entire supply chain, make greater contributions to the development of the intelligent medical supplies management sector, and support the establishment of a comprehensive and effective new smart healthcare system.
About Longmen Capital
Longmen Capital is a specialized venture capital firm in the pharmaceutical industry, focusing on early-stage and growth-stage investments in innovative pharmaceuticals and biotechnology. The team members possess interdisciplinary educational backgrounds in medicine, pharmacy, biology, and finance, along with many years of experience in pharmaceutical venture capital and industry operations. Since its establishment in 2017, Longmen Capital has invested in more than 30 innovative pharmaceutical companies, with assets under management nearing RMB 3 billion.