Chenrui HealthTech Submits IPO Prospectus Following Pre-A Round and Amid A-Round Fundraising

Recently, Xu Jilong, founder of Guangzhou Chenrui Software Technology Co., Ltd. (hereinafter referred to as “Chenrui Tech”), revealed to VCBeat (WeChat ID: vcbeat), “We have completed our Pre-A round of financing amounting to RMB 30 million. Our next step is to further refine our technology and provide tiered diagnosis and treatment solutions to more hospitals.”

It is reported that this marks the second time Chenrui Technology has secured financing. The investors in both the angel round (RMB 10 million) and the Pre-A round (RMB 30 million) were the same entity: Shenzhen Huizun Asset Management Co., Ltd.

To this end, VCBeat conducted an exclusive interview with Hu Min, Chairman of Shenzhen Huizun Asset Management Co., Ltd., to discuss his reasons for investing in Chenrui Technology twice and his investment logic in the healthcare industry.

Xu Jilong was once a guard in the embassy district, then a sales representative for medical informatics products, and later an executive at a leading enterprise in the medical informatics industry. Today, he is the founder of an internet healthcare startup that provides tiered diagnosis and treatment solutions for medical consortia and telemedicine services.

Discussing the initial market expansion, Xu Jilong said, “When collaborating on a project for the first time, hospital administrators were hesitant to take the risk because it was something new. I directly told the director of the local Health and Family Planning Commission that we would build the system at no upfront cost. If you were dissatisfied with the results, you could dismiss us; if satisfied, you would then make the payment. Initially, we didn’t even sign a formal contract—only a letter of commitment—before proceeding with the project.” This confidence stemmed from years of technological accumulation and R&D, as well as industry foresight based on market analysis and policy insights.

The medical collaboration platform based on tiered diagnosis and treatment, implemented by the People’s Hospital of Linzi District in Zibo City, Shandong Province, together with its affiliated medical institutions, is a typical case study for Chenrui Technology. Built upon information technology infrastructure, the hospital’s medical collaboration platform enables interoperability of patient health records and medical histories, facilitates mutual recognition of diagnostic test results, supports prescription portability, and promotes medication sharing.

With technical support from Chenrui Technology, Linzi District People’s Hospital has integrated medical resources within the Linzi area by establishing collaborative centers for various healthcare services, including medical imaging, laboratory and diagnostic testing, two-way patient referrals, remote consultations, surgical demonstrations, video conferencing, and an online academy. These initiatives have maximized the utilization of medical resources, enhanced regional healthcare service capacity, and facilitated the decentralization of high-quality medical resources to grassroots levels. As a result, the longstanding challenge of difficult access to medical care has been effectively addressed: residents no longer need to crowd into tertiary hospitals for common ailments such as fever and colds, which can now be managed at local primary care facilities.

Since the platform’s launch, Linzi District People’s Hospital and its affiliated medical institutions have achieved remarkable progress in building a tiered diagnosis and treatment system. On April 6, 2017, People’s Daily published an article titled “Large Hospitals Are Overwhelmed, Small Hospitals Are Underutilized: Shandong Zibo’s Medical Consortium Explores Bringing Quality Physicians to Patients’ Doorsteps,” highlighting the experience of Linzi District in developing its medical consortium.

In terms of cooperation models with hospitals, Chenrui Technology has observed diverse payment mechanisms. The first involves hospitals self-funding their initiatives. The second entails third-party financing, such as allocating interest rate spreads from partnerships with banks to fund informatization construction. The third involves pharmaceutical distribution enterprises: after hospitals outsource drug distribution to third parties, the winning pharmaceutical companies contribute a portion of their profits to support the hospitals’ informatization development.

Currently, Chenrui Technology has established collaborations with more than 300 hospitals, including Shandong Provincial Hospital, the Second Affiliated Hospital of Guangxi Medical University, the Third Affiliated Hospital of Southern Medical University, the Affiliated Hospital of Guizhou Medical University, Shenzhen University General Hospital, and the Third Affiliated Hospital of Sun Yat-sen University. Among these partners, 10% are Grade A tertiary hospitals.

“Mr. Xu and I have been friends for over a decade; I am well acquainted with his character and professional background, so I have full confidence in his entrepreneurial venture,” Hu Min stated candidly.

According to Hu Min, Xu Jilong initially visited him to seek advice on how startups could raise financing. After in-depth discussions, Hu leveraged his keen investment expertise honed over more than 20 years to seize this opportunity and swiftly completed the first round of investment in Chenrui Technology.

The second investment was made because Chenrui Technology’s business performance exceeded expectations, prompting a desire to further expand its market presence. Consequently, the company approached Hu Min again, who exclusively injected an additional RMB 30 million.

At this point, the team size at Chenrui Technology has doubled, and its business volume has also doubled. “As of June this year, Chenrui Technology’s order value has reached RMB 80 million.” Hu Min was not surprised by this outcome, attributing it entirely to Mr. Xu Jilong’s profound industry insights and professionalism, which have earned the trust of hospitals.

The reason lies in Xu Jilong’s effective cost management, particularly his adoption of the B2B2C business model, which has enabled the company to achieve steady, healthy growth. His profound industry insights and strong cost control have been instrumental to this success. Hu Min is well aware that his transformation—from an ordinary soldier to a business elite, and from a technological novice to the CEO of a healthcare IT company—was driven entirely by his humility, relentless effort, and unwavering dedication. Deep down, he has always maintained the diligence, perseverance, conscientiousness, and rigor characteristic of military service.

Previously, Hu Min was also involved in many B2C internet healthcare projects. He believes that applying traditional e-commerce thinking to internet healthcare is not viable. This is because the healthcare industry differs from the traditional e-commerce sector; unlike e-commerce, healthcare is dominated by medical institutions and physicians, while patients on the consumer side are relatively vulnerable.

For internet healthcare companies, the only viable path is to partner with hospitals (the B-side) to secure core physician resources from medical institutions, and then leverage this B-side foundation to attract patient (C-side) resources. Otherwise, even the most promising consumer-facing (2C) internet healthcare projects will inevitably succumb to issues such as spiraling costs and broken capital chains.

Hu Min also told reporters that, for Chenrui Technology, in addition to providing investment capital, he actively helped the company connect with relevant medical resources and provided strategic consulting services to deepen its competitive moat. He assisted Chenrui Technology in formulating a clear strategy:

First, by aggressively expanding nationwide to accumulate a substantial base of B-side (hospital) resources;

Second, leverage the company’s core technologies to enable data interoperability among B-side stakeholders and develop applications based on the accumulated data.

In the future, provided that the state permits medical data to be used for serving healthcare institutions, the data accumulated on the platform will be an invaluable asset.

After these data are used for deep learning, intelligent diagnostic robots will be able to assist physicians in making diagnoses, guide precise medication administration, and advance medical research and technology.

Hu Min stated, “Why are people willing to go to large hospitals for medical care? Because these institutions concentrate highly skilled and experienced senior physicians. With the introduction of intelligent consultation robots, it would be as if an inexperienced young doctor were assisted in diagnosis by a seasoned veteran with millennia of accumulated expertise. This approach can truly address the imbalance in medical resource distribution and alleviate associated pain points.” This judgment stems from his extensive experience in the secondary market, which has accustomed him to analyzing issues from a unique perspective.

To ensure that Chenrui Technology’s future core competitiveness is centered on artificial intelligence, the initial task of acquiring these data sets has become particularly critical. This is a tough battle. Without the team’s high execution efficiency, it would be difficult to accomplish this arduous task. This is closely tied to the founder’s military background, which instills resilience in his approach to work.

Hu Min still remembers how arduous it was for Xu Jilong to expand into hospitals in the early stages. At that time, hospitals were quite resistant to this new innovation. He had to communicate individually with doctors, nurses, hospital directors, and department heads, only breathing a slight sigh of relief when they reluctantly agreed to allow his product into their facilities. If it had been anyone else, while they might have had ample patience to promote to one or two hospitals, sustaining such an approach across every institution would likely have been unsustainable.

When asked about the quote he admires most, Hu Min cites Guo Guangchang, Chairman of Fosun Group: “Do not pursue easy money; instead, earn money that is hard to make.” Easy money naturally attracts many followers, whereas hard-earned money typically involves projects with high competitive barriers. If the product is further refined, customers will naturally be more willing to pay for it.

It is precisely based on this investment logic, which is deeply rooted in philosophical thinking, that Hu Min remains firmly bullish on Chenrui Technology. During the company’s early stages of development, continuous expansion into the B2B market made Xu Jilong’s work exceptionally arduous. “He would often pull all-nighters flying across two or three cities, solely to develop new markets,” said Hu Min.

The more challenging the endeavor, the greater the need for perseverance. The longer this persistence endures, the deeper the company’s economic moat becomes. At this juncture, the critical importance of investing in people comes to the fore. It is precisely Xu Jilong’s military background and his indomitable spirit that have propelled Chenrui Technology to one strategic high ground after another.

What impressed Hu Min most was that nearly every hospital president or senior executive who had interacted with Xu Jilong was won over by his professionalism and, adopting a “let’s give it a try” mindset, implemented his tiered diagnosis and treatment solution. In particular, a retired hospital president held Xu Jilong in high regard, describing his demeanor as embodying the chivalrous spirit of camaraderie—a trait shared by most successful entrepreneurs.

This kind of streetwise loyalty is a trait often lacking in scholar-entrepreneurs, yet it is essential for seizing market share in the early stages. Once the entrepreneurial journey begins, founders must fight fiercely for their share of the market. Without a wolf-like mindset, it is difficult to grow a small company into a large one or to ignite the fighting spirit of the team.

Hu Min considers two key factors when selecting project targets:

First: “In our investment approach, we prioritize projects that are grounded in reality and founders who are down-to-earth; people are the primary factor.”
Second: Invest in sound business models and avoid projects that rely on gimmicks to hold capital hostage. To this end, he summarized the criteria as the “Three Goods”: a strong team, a solid model, and promising prospects!

Looking ahead, Huizun Capital intends to keep its investment focus squarely on the healthcare services sector. He believes that as China’s population ages at an accelerating pace, the healthcare services industry will experience explosive growth, presenting substantial opportunities.

On the other hand, as economic standards rise, people are placing increasing importance on their health needs. When residents prioritize health above all else, opportunities in the medical services industry naturally emerge.

“Our operational style at Huizun Capital is similar to that of the secondary market: when we identify a clear opportunity, we make substantial investments, avoiding probabilistic investing.” Hu Min is firm in this belief. He maintains that probabilistic investing offers little sense of accomplishment and does not demand high professional expertise from investors.

At the same time, his steadfast commitment to managing investors’ capital with the same prudence as his own has earned widespread recognition from a large base of investors. Across dozens of investment projects, some have gone public while others are on the verge of an IPO. For instance, Tencent Music is expected to list in the United States by the end of this year or early next year. The market generally views Tencent Music as comparable to Spotify, with its valuation projected to exceed $30 billion.