How ECF Capital Forged China's Healthcare Investment Banking Dream Team

Last Friday, Haihe Pharmaceutical, a leading domestic innovator in oncology drugs, completed a RMB 1.2 billion Series B financing round, marking another deal exceeding RMB 1 billion in China’s biopharmaceutical investment and financing sector.

In June of that year, Changfeng Pharmaceutical secured RMB 360 million in Series F financing, and BioCapital Crystal Diagnostics raised RMB 800 million in Pre-IPO financing. The former completed a total of RMB 1 billion in financing within six months, setting a record for the largest transaction in China’s inhaled formulation sector, while the latter became one of the largest financing rounds in recent years in the medical device and diagnostics field.

Pushing the timeline back by one month, Everest Medicines, a biopharmaceutical company highly sought after by the market, completed a $310 million financing round, setting a record for the largest primary market transaction in the history of China’s biopharmaceutical sector. The investors in this deal included top-tier funds from both China and the United States, marking a new historical high for investment and financing transactions in China’s biopharmaceutical industry.

As the exclusive financial advisor for the aforementioned large-scale financing transactions, CEC CAPITAL navigated the challenges of the pandemic in the first half of 2020, successfully closing 14 major deals in the healthcare sector. It ranked first among financial advisors in the healthcare industry according to dynamic rankings published by media outlets such as VCBeat.

From closing four financing deals within the first ten days of 2020, covering sub-sectors such as biopharmaceuticals, healthcare services, and medical devices with companies including Changfeng Pharmaceutical, 3DMed, and Fisen Technology, to announcing high-profile transactions in the healthcare services sector after the Lunar New Year, such as the landmark deals involving Sanbo Brain Hospital and Panorama Medical Imaging, and further to milestone transactions that made history and elevated China’s biopharmaceutical investment and financing to new heights—such as those with EverMed, Boao Jingdian, Changfeng Pharmaceutical, and Haihe Biopharma—the CEC CAPITAL Healthcare Investment Banking Team has grown alongside the development of China’s health industry, emerging as the “Dream Team” of investment banking in China’s healthcare sector.

As one of the earliest new-economy investment banks established in China, CEC Capital, which started with a focus on TMT and consumer sectors, has always been a prominent player in China’s new-economy investment banking market. In the recently announced 2019 China Best New-Type Investment Banks ranking by Zero2IPO, CEC Capital ranked among the top three. Its past clients include a long list of well-known names, ranging from early clients such as NetEase, Sina, Lenovo, Li Ning, and Enlight Media, to later ones like Suning, Missfresh, and XPeng Motors.

But this is only one facet of interpreting CEC CAPITAL.

Healthcare, an industry that appears unrelated to the “new economy” but is being profoundly transformed and reshaped by technology and data, while also experiencing the kind of market frenzies all too common in the history of the internet, is becoming another shining hallmark of this new-economy investment bank.

There may have been an element of serendipity involved. Hong Ailin, a founding partner of CEC Capital, represented the multinational pharmaceutical company Merck & Co. (MSD) in the early 1990s, overseeing the establishment of multiple manufacturing facilities in China and facilitating the transfer of several technological projects, including recombinant hepatitis B vaccine. Long before the healthcare sector attracted widespread attention from investors, Hong, with her pharmaceutical background, shared a strong consensus with Wang Ran, founder of CEC Capital: that the healthcare industry would inevitably become one of China’s largest sectors and would certainly give rise to super-companies on the scale of Tencent and Alibaba.

However, for a long period, due to the sluggish development of the health industry over many years and capital’s prolonged indifference toward it, investment and financing activities in the healthcare sector remained relatively quiet compared with the boom in the TMT market. As late as 2014, there were only a handful of primary-market financing deals in the health industry exceeding USD 50 million.

It was under these circumstances that Wang Ran and Hong Ailin, two core partners at CEC Capital, decided to buck the trend by formally establishing CEC Capital’s healthcare investment banking team. For a considerable period thereafter, every department within CEC Capital had annual headcount expansion plans, with the sole exception of the healthcare group. Wang Ran’s directive was straightforward: “Recruit top talent whenever available; no need to keep count.”

Key figure Li Gang joined CEC CAPITAL in 2016. Prior to this, he worked at the Investment Banking Department of CITIC Securities for nearly nine years, where he participated in transactions involving numerous industry-leading companies, including China Minmetals, Wuhan Wushang Group, Suning Cloud Commerce, Dianhong Pharmaceutical, Yiling Pharmaceutical, Yifeng Pharmacy, Shineway Pharmaceutical, Jointown Pharmaceutical, Huahai Pharmaceutical, and Cheezheng Tibetan Medicine. He possesses profound insights and extensive industry experience in the healthcare sector.

He had just joined CEC CAPITAL when he was immediately hit with a harsh reality check. In his second month on the job, before closing a single deal, two colleagues resigned, leading some to believe that “CEC CAPITAL’s healthcare group was on the verge of dissolution.” Moreover, the remaining team members lacked professional backgrounds in biology or medicine. In short, at that time, CEC CAPITAL’s healthcare team was largely an amateurish outfit.

“We approach this with the mindset of internal entrepreneurship,” Li Gang has told his team countless times.

Consequently, CEC Capital broke with the traditional investment banking industry’s conventional hiring practices by boldly recruiting a cohort of professionals with backgrounds in biology and medicine. Notable examples include Dr. Zhang Xiao, a graduate of the Department of Chemistry at the University of Science and Technology of China, and Wang Bin, a former anesthesiologist, who subsequently became the heads of the Biopharmaceutical Group and the Healthcare Services Group, respectively. Starting from a team of fewer than five members, CEC Capital’s healthcare investment banking team grew into the largest “dream team” in the market, with over 40 professionals across China and the United States, in less than six years. It has gradually formed five specialized sub-groups: Pharmaceuticals and Biotechnology, Healthcare Services, Medical Devices, Digital Health, and Healthcare Industry M&A.

Starting from the second year after Li Gang joined CEC CAPITAL, CEC CAPITAL’s forward-looking predictions for China’s healthcare industry began to be gradually validated, and its healthcare industry team entered a fast track of rapid development.

In 2017, CEC CAPITAL achieved significant success. Among the major primary market transactions in China’s healthcare sector (including healthcare services, pharmaceuticals, medical devices, and digital health) valued at over USD 50 million, a total of 18 deals involved financial advisory firms, with CEC CAPITAL participating in 6 of them. In November alone, CEC CAPITAL’s Healthcare Team announced the completion of three projects—Sinocelltech, Zesheng Technology, and 3D Medicines—with a total financing amount exceeding RMB 1.3 billion.

CEC Capital, which has repeatedly achieved success in the innovative drug sector, has also gradually expanded its footprint in other specialized fields. In 2018, CEC Capital assisted Shanghai Cell Therapy Group, a leader in China’s cell therapy industry, in securing RMB 925 million in financing—the largest single funding round completed in the cell therapy sector at that time. In 2019, with CEC Capital’s support, Penguin Almond, a leading digital healthcare service platform in China, raised USD 250 million.

In 2020, CEC CAPITAL announced four transactions within the first ten days of the year, involving Changfeng Pharmaceutical, Fisen Technology, 3D Medicines Diagnosis, and Saitian Dental. These deals spanned the pharmaceuticals and biotechnology, healthcare services, and medical devices sectors, garnering significant attention and acclaim.

Even the COVID-19 pandemic, which has been ravaging the globe since late January, has failed to slow CEC CAPITAL’s aggressive expansion in the healthcare industry. From the period following the Spring Festival to the present, CEC CAPITAL has announced more than 10 healthcare investment banking transactions that have attracted widespread market attention. These include: PanView Medical Imaging’s Series B financing of over RMB 600 million, marking the largest financing round to date in the independent third-party medical imaging sector; Sanbo Brain Hospital’s financing of over RMB 800 million, one of the largest single transactions in the medical services sector in recent years; Bedeng Medical, a benchmark project in the “Industrial Internet + Healthcare” space; substantial financing rounds for GenePharma and Obio Technology; Everest Medicines’ USD 310 million financing, which set a record for the largest primary market transaction in the history of China’s biopharmaceutical sector; BioCapital’s Pre-IPO financing round of over RMB 800 million, one of the largest financing scales in the medical devices and diagnostics sector in recent years; Changfeng Pharmaceutical’s Series F financing, totaling RMB 1 billion within six months, representing the largest transaction in China’s inhalation formulation sector; and Haihe Pharmaceuticals’ Series B financing of RMB 1.2 billion, which was oversubscribed by several times and garnered favor from numerous top-tier institutional investors.

In addition, the landmark strategic cooperation among Simcere Pharmaceutical, Alphamab Oncology, and 3D Medicines on the commercialization of a next-generation PD-L1 antibody drug in China—further facilitated by CEC CAPITAL after it had arranged the spin-off financing for 3D Diagnostics and 3D Medicines in 2019—has become a milestone event in China’s innovative drug market.

China’s healthcare industry market has become a critical battleground that new-economy investment banks in China can no longer ignore, and CEC Capital has been strategically positioned here for many years. Its increasingly mature professional team is helping one leading Chinese healthcare company after another grow into towering giants, as evidenced by the numerous successful transactions they have closed. In this process, they have personally participated in and witnessed the growth and rise of China’s healthcare industry.

If there is a moat underpinning CEC Capital’s ever-consolidating leadership in China’s healthcare investment banking services market, that moat is—time.

Reflecting on CEC Capital’s twenty-year journey, Wang Ran believes that its people have always adhered to a core belief: long-termism. Many perceive long-termism simply as persisting in one endeavor over an extended period, or merely as “perseverance.” However, the true long-termism upheld by CEC Capital lies in the “logic” behind such persistence. It is about “using long-term certainty to counter external uncertainty, transcending change itself and the times, to ensure that valuable initiatives are sustained continuously.” This resolve to invest in the future stems from Wang Ran’s tenure at world-leading investment banks such as Goldman Sachs and JPMorgan Chase. The enduring success of these global banking giants is inseparable from their steadfast commitment to the values of long-termism.

At CEC CAPITAL, the value of long-termism permeates every aspect of the company.

During project screening, CEC CAPITAL adheres to the principle of “aligning with industry leaders.” Li Gang emphasizes that “aligning with industry leaders” means considering not only transaction value but also factors such as technological advancement and market position. “Only by engaging in major transactions associated with industry-leading positions can we cultivate sensitivity to major market trends and become part of those trends. Our goal is to pursue and grow alongside industry leaders, ultimately becoming leaders ourselves.”

When engaging with Sanbo Brain Hospital, CEC CAPITAL observed that over the past 16 years, Sanbo had established premier neurosurgical specialty hospitals in six major cities across China without relying on large-scale equity financing. CEC CAPITAL believed that Sanbo possessed the most exceptional service system and capabilities within China’s private healthcare sector, positioning it as a potential industry consolidator in the future. Leveraging its profound professional expertise, keen industry insights, and extensive resources, CEC CAPITAL articulated the investment highlights of the project, garnering significant recognition from the capital markets for Sanbo Brain Hospital’s brand and value. This attracted intense competition between two major institutional investors backed by large insurance funds. Ultimately, Sanbo secured over RMB 800 million in financing, making it one of the largest single transactions in China’s healthcare services sector in recent years.

In the course of operating and managing the project, long-termism is manifested in the higher standard that CEC Capital has set for itself: conducting investment banking business with an investment mindset.

If one follows the typical commercial logic of investment banks, it is inevitable to “seize every transaction opportunity.” “Traditional investment banks tend to focus on packaging—whether there is a star team or top-tier funds involved, how promising the deal opportunity is, and whether the project exudes a sense of prestige.” However, Zhang Xiao believes that in the healthcare sector, projects often do not display many highlights in their initial stages. Healthcare teams adhering to long-termism will identify valuable companies by examining fundamentals. “We assess their product pipelines, future investment rationale, and whether the returns are sufficient.” CEC CAPITAL not only strives to secure companies with the highest immediate transaction value but also places greater emphasis on whether a company possesses long-term value and the potential to grow into a towering enterprise in the future.

For example, in the case of 3D Medicines, a company specializing in an integrated oncology diagnosis and treatment platform. Founded in 2010, 3D Medicines focuses on precision oncology. At that time, precision medicine had not yet become a buzzword. However, 3D Medicines recognized the future potential of precision medicine in its early startup stage, aiming to lead the industry’s development with its business model.

CEC Capital holds a strong bullish outlook on 3D Medicines’ prospects and leveraged its expertise in capital market operations to facilitate the company’s collaboration in 2017 with “national team” investors backed by state-owned assets, securing RMB 670 million in financing. As 3D Medicines gradually establishes its industry leadership and advances toward its ambitious vision of integrated diagnosis and therapy, CEC Capital remains its steadfast guardian and a witness to its pivotal milestones.

In 2019, through the joint efforts of CEC CAPITAL and the company, 3D Medicines was spun off into two independent entities: 3D Medicines Diagnostics and 3D Medicines Pharmaceuticals. The former focuses primarily on precision oncology diagnostics, while the latter is dedicated to the research and development of oncology drugs. At the end of 2019, CEC CAPITAL, which had accompanied 3D Medicines throughout its years of growth, once again participated in and witnessed a historic milestone for the company, as both the diagnostics and novel drug divisions secured their first rounds of significant investment.

Arrail Dental, which has maintained a decade-long partnership with CEC CAPITAL, may serve as further proof. In 2010, Arrail, operating only ten-plus directly owned clinics in Beijing, Shanghai, and Shenzhen, was seeking rapid large-scale expansion. Although the penetration rate of dentists in China remained low at that time, Arrail firmly believed that with rising household incomes, people would place greater emphasis on oral healthcare, indicating broad development prospects for China’s oral healthcare market.

With this shared understanding, CEC CAPITAL has accompanied Arrail Group from its Series A financing round all the way through to its Series D round, providing support not only from a capital perspective but also offering strategic guidance and advice for corporate development. Along the way, it has witnessed Arrail’s transformation from its first dental clinic into today’s leader in China’s dental healthcare services sector.

Precisely because CEC CAPITAL excels at adhering to a “buyer’s mindset” to screen out the industry’s most outstanding companies and create transaction opportunities with investment value, virtually every healthcare project handled by CEC CAPITAL becomes one that top-tier investment institutions take seriously and prioritize for engagement.

“Please provide feedback on this data by tomorrow morning.” As the clock hands pointed to 12:30 a.m., Wang Bin was regretting having assigned work so late, thinking he could have waited until the next morning, when he received a new message notification.

From the initial request to the response, it took less than three minutes for a reply that summarized data and proposed solutions to arrive. Although this was not an urgent matter, Wang Bin was not surprised by such “CEC speed.” “Everyone on the team is diligent; no matter how late it gets, they always respond promptly to work-related matters.” At CEC Capital, every member, from analysts to management, demonstrates a strong sense of responsibility, ensuring timely information processing and striving to provide feedback to clients at the earliest opportunity.

If diligence and accountability define the professional conduct of investment bankers, then “sharing” is undoubtedly the unique hallmark of the CEC CAPITAL team. While many believe that investment banking should emphasize a “wolf-like” aggressiveness, CEC CAPITAL discourages internal rivalry and instead encourages collaboration. “We have never experienced instances of deal-poaching among colleagues.” Discussing the concept of “sharing,” Li Gang regards it as a strong consensus within a healthy team.

“All the resources at my disposal are highly accessible and shared with team members to help them get up to speed quickly, build their own networks, and cultivate their ecosystems.” Zhang Xiao recalls that when he first joined, the healthcare investment group started from scratch, having to identify investors on their own. He and Li Gang, dressed in suits and leather shoes, strode purposefully down the streets, knocking on the doors of one client and investor after another. Yet when it came to these hard-earned investor connections accumulated over time, they shared them unreservedly with colleagues—even with newly hired analysts.

“Sharing” enables team members to quickly acquire knowledge and resources, while “trust” helps them soar faster on this platform. Wang Bin recalls an instance when a young project manager on his team was assigned to a project that had generated significant anticipation within the industry and market. At one point, the manager began to doubt their ability to handle the responsibility. In response to this self-doubt, Wang Bin offered ample trust and support, stating, “We all have your back. If you encounter any issues, let’s communicate promptly and work together to find solutions.” By providing every member with sufficient space and confidence, the team has, in turn, cultivated an open and free-spirited atmosphere.

Hong Ailin summarizes the ethos of CEC Capital’s Healthcare Group as “trust” and “respect.” “Within the team, communication is fully open and trusting, whether from superiors to subordinates or vice versa.” Many young analysts also noted that at CEC Capital, they can communicate with their supervisors at any time, with few hierarchical barriers between senior and junior staff.

Many members of the Health Group are passionate about football, often donning professional gear to hone their skills on the pitch. This team, characterized by its comprehensive technical prowess and mature playing style, features spiritual leader Hong Ailin, who introduced hepatitis B vaccines to China two decades ago, benefiting countless lives while remaining true to her original mission. It also includes midfield maestro Li Gang, whose exceptional command of the game established the team’s tactical identity and, like streams converging into a river, guided the entire group to a leading position among investment banks in China’s health industry. The roster further boasts talented star players with outstanding individual capabilities—such as Zhang Xiao, Wang Bin, Wu You, and Hu Minjie—who shoulder significant responsibilities in their respective fields, alongside numerous analysts, project managers, and vice presidents who possess solid professional expertise, strong transactional capabilities, and profound insights into both the industry and capital markets.

Over the past three to four years, this team has delivered smooth and visually impressive performances through a stable, all-around offensive and defensive strategy, securing multiple landmark financing deals across various sectors. By exceeding client expectations, they have earned the prestigious title of “Dream Team.”

Today, with the addition of an increasing number of outstanding professionals, the CEC Health team has grown to over 40 members, becoming the largest, most professional, and most comprehensively integrated investment banking team in China’s health industry. Achieving industry leadership is only one aspect; many team members are driven by a shared belief—to help more excellent enterprises grow into towering trees, propel the development of China’s health industry, and make tangible contributions to humanity in the field of healthcare.

Driven by their pursuit of the stars and the sea, the iCare Health team chose Sanya as the destination for last year’s team-building retreat. One dusk, they stood hand in hand in a line on the beach before their hotel, then charged together into the ocean. At that moment, riding the wind and breaking the waves was no longer just a mandatory activity of the retreat, but a deep aspiration from within their hearts.