Meinian Onehealth Secures Strategic Investment from Shanghai State-Owned Capital, Leveraging Policy, Resource, and Capital Advantages for a New Leap Forward

On January 25, Meinian Onehealth (SZ: 002044) announced that the company had jointly signed the “Strategic Cooperation Agreement among Meinian Great Health Industry Holdings Co., Ltd., Shanghai Guosheng Haitong Equity Investment Fund Partnership (Limited Partnership), and Haitong Securities Co., Ltd.” with Guosheng Haitong Fund and Haitong Securities. The latter two parties will make a strategic investment to acquire a 5% equity stake in the company and engage in strategic cooperation in areas such as capital-industry alignment and financial services. The term of this strategic cooperation is three years.

In summary, Meinian Onehealth, Guosheng Haitong Fund, and Haitong Securities have reached a cooperation agreement covering three areas: investment and financing, strategic support, and other business collaborations.

Pacific Securities analyst pointed out, “This strategic partnership reflects the state’s emphasis on and support for the preventive medicine industry, as well as recognition of Meinian Onehealth.”

Background information indicates that the actual controller of Guosheng Haitong Fund is the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), which collectively holds 64.73% of the fund’s shares. All shareholders have state-owned enterprise backgrounds, including Guosheng Group, Haitong Asset Management, Shanghai State-Owned Enterprise Reform and Development Equity Investment Fund, Shanghai Electric, and Guosheng Capital. The fund is committed to facilitating capital flows for Shanghai’s leading enterprises and their related industrial chains, thereby supporting the healthy development of the private sector.

In November 2018, the Shanghai Municipal People's Government issued the “Several Opinions on Enhancing the Vitality of Private Enterprises and Vigorously Promoting the Development of the Private Economy,” proposing to strengthen measures against liquidity risk contagion and establish a fund with a scale of RMB 10 billion.

CICC’s healthcare analysts believe that “introducing shareholders with a Shanghai state-owned assets background is conducive to the company’s growth.” Through this collaboration, the company will be able to integrate advantageous resources, optimize its shareholder structure, enhance corporate governance and market competitiveness, and further strengthen its leading position in the field of preventive medicine.

As a vital component of the national health industry, the health checkup sector in which Meinian operates, along with the achievements of the Company as the largest health checkup institution in China, both meet the criteria for key state-supported entities.

The health industry is one of Shanghai’s core pillar industries. Industry experts believe that, within this favorable environment, Meinian Onehealth is poised to receive greater and more diversified government support and guidance in the future. This strategic partnership will facilitate the integration of advantageous resources, further solidify the company’s leading position in China’s preventive medicine sector, and align with its long-term development strategy as well as the interests of all shareholders.

Industry veterans have pointed out that Meinian Onehealth, leveraging its three major advantages of “policy, resources, and capital,” is poised to achieve more rapid and robust leapfrog development.

First, policy support has facilitated comprehensive cooperation among the three parties. The three parties “will establish a long-term strategic partnership to jointly build a Shanghai healthcare industry platform, aggregate high-quality medical resources in Shanghai, and support the overall planning of Shanghai’s health industry.”

As early as 2017, the Shanghai Municipal People’s Government released the Outline of the “Healthy Shanghai 2030” Plan, which mapped out healthcare and medical services in Shanghai. Meanwhile, it proposed 23 development indicators across five dimensions: health status, healthy lifestyles, health services and security, health environment, and the health industry.

In July 2018, Shanghai also issued the “Several Opinions on Promoting High-Quality Development of the City’s Health Service Industry and Accelerating the Construction of a World-Class Central City” (the “50 Articles for the Health Service Industry”). A key measure outlined in the document is to coordinate the allocation of urban-rural and regional health and medical service resources, establish a “5+X” layout for the health and medical service industry, and aim to build an integrated, clustered, and high-end platform for the healthcare industry.

Through service coverage and resource sharing, the three parties achieve complementary advantages.

Haitong Securities leveraged its strengths in the capital market to provide Meinian Onehealth with a comprehensive suite of professional financial services, including but not limited to private placements, mergers and acquisitions, asset restructuring, domestic and overseas bond issuances, financial leasing, industrial funds, and investment and wealth management.

Haitong Securities boasts an integrated business platform, an extensive marketing network, and a robust client base. It primarily offers traditional services such as brokerage, investment banking, and asset management, alongside innovative businesses including margin financing and securities lending, stock index futures, and private equity (PE) investment.

The comprehensive cooperation among the three parties includes, but is not limited to, equity investments and the sharing of channel and customer resources. Any party may propose new areas of collaboration based on the principles of equality, voluntariness, mutual benefit, win-win outcomes, and good faith, with the aim of achieving resource sharing, complementary advantages, and joint development among the three parties, while aligning with their respective strategic development goals.

A substantial capital injection has infused new vitality into the growth of Meinian Onehealth.

Guosheng Haitong Fund is a fund initiated and established primarily by Shanghai Guosheng (Group) Co., Ltd., a Shanghai municipal state-owned assets platform, in conjunction with other relevant municipal state-owned enterprises. It is committed to supporting the healthy and stable development of Shanghai’s private real economy, while also building a platform for communication and exchange to better promote capital integration, coordinated development, complementary advantages, and industrial collaboration between state-owned and private enterprises.

Guosheng Haitong Fund has fully leveraged its role in promoting the healthy development of the private economy by facilitating the alignment of capital with industry, thereby accelerating the rapid growth of Meinian Onehealth’s business and jointly contributing to Shanghai’s healthcare industry.

"Persisting in technological innovation, technology-driven development is the greatest momentum for enterprise growth."

Currently, the launch of Shanghai’s STAR Market is imminent. Emerging sectors such as healthcare, biopharmaceuticals, and artificial intelligence are receiving significant attention and are expected to become a key focus of industrial support by the municipal government in the future.

CICC Healthcare Analysis believes that following the signing of this strategic agreement, Guosheng Haitong Fund and Haitong Securities plan to strategically invest in 5% of the company’s shares, with the transaction likely to be settled through block trades. After the strategic investment, Guosheng Haitong Fund will obtain a seat on the Board of Directors, and comprehensive strategic cooperation will subsequently be launched.

Building on its position as a leading health checkup portal and leveraging Shanghai’s municipal state-owned asset platform, Meinian Onehealth is poised to forge deeper collaborations with industry stakeholders in the broader health sector and artificial intelligence (AI) fields.

2018 was the year of intelligent innovation for Meinian Onehealth. In addition to its nationwide layout covering 200 cities and 600 medical and check-up centers, Meinian Onehealth has built a massive health data traffic volume and established significant influence within its ecosystem platform. It has entered into strategic collaborations with numerous authoritative academic institutions and leading enterprises, committing itself to technological innovation and deepening its deployment in artificial intelligence (AI) to construct the Meinian AI Ecosystem Map. This includes: conducting intelligent risk assessment by integrating check-up data with genetic data; performing brain health warning screenings using MRI imaging systems; carrying out AI-based gastric health diagnostics via capsule robot systems; conducting diabetic retinopathy screenings with fundus-assisted diagnostic systems; facilitating new drug development by combining flow samples with genetic data; diagnosing small pulmonary nodules using low-dose spiral CT; and formulating health management plans by integrating check-ups with smart hardware, among other initiatives.

For many years, Meinian Onehealth has regarded medical safety and quality as the lifeline of its corporate development, continuously strengthening its internal capabilities in medical safety and quality management.

In September 2018, Meinian Onehealth successfully acquired a stake in Adicon. As an independent third-party medical laboratory service provider, Adicon has established medical laboratories in 19 provinces, autonomous regions, and municipalities across China, offering more than 2,000 testing items and collaborating with over 10,000 medical institutions nationwide. Through this partnership, Meinian Great Health has further comprehensively enhanced its testing standards.

In November 2018, Meinian Onehealth became the first to participate in the JCI international “gold standard” accreditation, making it the only health examination institution globally to undergo JCI standard certification. The Joint Commission International (JCI) standards represent an accreditation model recognized by the World Health Organization. By pursuing JCI accreditation and benchmarking against top-tier international standards, and leveraging JCI’s theoretical tools for medical safety and quality management, Meinian Onehealth aims to establish itself as a professional health examination provider with international-quality standards. This will not only enable the company to deliver higher-quality medical services to consumers but also position it as a leading exemplar of high-quality medical health examination institutions in China.

In December 2018, Meinian Onehealth pioneered the launch of an authentication and compliance management system by integrating intelligent technologies, implementing “facial recognition-based identity verification for medical and technical staff on duty.” By adopting smart medical quality management measures, the company further strengthened medical quality oversight and enhanced internal control capabilities. Meanwhile, in the areas of medical safety and quality management, Meinian Onehealth implemented the Compilation of Eighteen Core Systems and the 800-Point Medical Quality Management Assessment Standards, which exceed industry benchmarks, to ensure medical compliance and comprehensive, gap-free quality control.

In addition, Pacific Securities analysts believe that "Meinian Onehealth is committed to building a closed-loop health examination ecosystem, leaving significant room for collaboration with insurance institutions."

It is understood that Meinian Onehealth has focused on extending its industrial chain in recent years and has explored collaborations with multiple insurance institutions. In October 2018, the company launched a new product, “Meinian Good Doctor,” in partnership with PICC (People’s Insurance Company of China), incorporating insurance coverage into its health checkup packages. This initiative not only increased the average transaction value and enhanced customer stickiness among individual consumers but also effectively reduced operational risks, allowing the company to devote more resources to strategic planning, product innovation and upgrades, and medical quality management. Given its position as a key entry point for health checkup traffic, the company enjoys broad prospects for future cooperation with insurance institutions, with increasingly diversified models of collaboration.

Industry insiders believe that Meinian Onehealth is currently operating steadily, with accelerated expansion in grassroots markets and the orderly promotion of its individual health checkup services. Compared to the fiercely competitive urban market, Meinian Onehealth holds significant advantages in terms of cost and competitiveness in the grassroots market.

A CICC healthcare analyst stated, “With the accelerated expansion of its grassroots chain network, the company’s operational scale and quality are set to improve significantly. Furthermore, the promotion of its high-margin individual health checkup services over the past two years has helped boost the company’s overall gross profit margin. In the coming years, Meinian Onehealth will continue to advance its strategy of grassroots expansion coupled with the enhancement of individual checkup services, with growth in both volume and pricing driving the company’s rapid development.”

As the leading enterprise in China’s preventive medicine sector, Meinian Onehealth has become the largest data gateway for preventive healthcare, with its service volume projected to reach 100 million person-visits within a few years. Its comprehensive strategic cooperation with Guosheng Haitong Fund and Haitong Securities has provided stronger advantages in policy support, resources, and capital, fueling its leapfrog development in the field of preventive medicine. Coupled with its current robust operational performance, vast grassroots scale, traffic advantages, and technological empowerment, Meinian Health holds promising prospects for the future.