Tencent and DHC Software File IPO Prospectus for Joint 'Digital Healthcare Ecosystem' Initiative

Recently, Tencent and Donghua Software have made new progress in their partnership: Tencent Cloud will join hands with Donghua Yiwei, a subsidiary of Donghua Software, to jointly create a "Joint Solution for Healthcare and Wellness" addressing the core demands of digital transformation among healthcare industry clients. The two parties will also establish a joint laboratory to deepen cooperation in areas such as Internet Plus Healthcare, AI Plus Healthcare, and Diagnosis-Related Groups (DRGs). The healthcare and wellness solution products co-developed by both parties are scheduled for official release in July.

Previously, Tencent and Donghua Software entered into a strategic partnership, announcing that they would focus on deep collaboration in four key areas—medical cloud and internet healthcare applications, smart cities, energy cloud, and financial big data—to address the new demands for digital transformation in traditional industries.

Technology and Ecological Advantages Combine to Boost the Medical and Health Industry

With years of deep engagement in the healthcare industry, Donghua Software has established leading capabilities in medical application software development, computer system integration, and information technology services, maintaining an absolute advantage in market share. Currently, Donghua serves more than 500 hospital clients, over 300 of which are Grade III hospitals, predominantly large-scale provincial- and ministerial-level medical institutions.

Meanwhile, Donghua is a pioneer in the application of Diagnosis-Related Groups (DRGs), having participated in more than 20 provincial and municipal-level special studies on healthcare reform. By the end of 2017, it had established DRG platforms in over 30 provinces and cities across China and built DRG information systems for more than 200 medical institutions nationwide, securing a leading market share.

In this collaboration, Tencent Cloud partners with Donghua Yiwei. In terms of resources, Donghua Yiwei possesses extensive B-side resources, including numerous leading medical institutions, while Tencent holds a significant traffic advantage on the C-side; their partnership enables complementary integration of high-quality resources. Technologically, Donghua Yiwei’s applications in hospitals, public health, medical insurance, and health management can be integrated with Tencent’s advanced technological capabilities in cloud computing, big data, artificial intelligence, instant messaging, and mobile payments, achieving synergistic utilization of their respective technical strengths. This joint effort will help facilitate seamless two-way connectivity between the B-side and C-side.

Leverage Internal and External Resources to Further Deepen Healthcare Industry Presence

For a long time, the traditional hospital model—characterized by long queues for registration, waiting, and payment, coupled with brief consultation times—has caused significant distress to the public. Tencent has long been strategically positioning itself in the healthcare sector, covering multiple subfields such as internet medical platforms, medical information services, physician communities, artificial intelligence, and insurance, with the aim of alleviating the difficulties people face in seeking medical care.

As early as 2014, WeChat City Services were first launched in Guangzhou, allowing WeChat users to access a range of public services related to people’s livelihoods, including healthcare, through the “City Services” section in the Wallet interface. Leveraging WeChat as a traffic gateway, these medical services cover appointment registration platforms, public hospitals, health check-up reservations, emergency services, and vaccination services, among others. They provide a comprehensive end-to-end hospital visit experience for public hospitals, addressing the longstanding issue of “three long waits and one short consultation.” As of March 2018, WeChat City Services had expanded to 362 cities, offering over 9,000 services across 30 categories, with a cumulative user base exceeding 462 million.

This May, at the 2018 Tencent “Cloud + Future” Summit, Tencent proposed collaborating with the industry to build a Healthcare Super Brain, integrating AI capabilities into pharmaceutical R&D, genomic data analysis, patient triage, disease screening, assisted diagnosis and treatment, and healthcare management.

On June 21, Tencent announced the opening of its AI-assisted diagnostic engine for “Tencent Miying,” its AI-plus-healthcare product, to facilitate intelligent upgrades of hospital information systems (HIS) and internet-based medical services. This initiative aims to build a smart healthcare ecosystem covering pre-diagnosis, intra-diagnosis, and post-diagnosis stages, marking China’s first open medical AI engine. Notably, as early as April, Tencent Miying had been approved by the state to undertake the construction of the National Next-Generation Artificial Intelligence Open Innovation Platform for Medical Imaging.

AI Empowers Hospitals and Enhances Patient Experience. The mismatch of medical resources is a major challenge in the healthcare industry, making the promotion of tiered diagnosis and treatment particularly critical. Tencent’s medical AI engine, Tencent Ruizhi, provides AI capabilities across the entire patient journey, including disease prediction, health management, and assessment. For instance, it offers precise AI-based triage to intelligently and accurately recommend physicians to patients, thereby improving the efficiency of medical services and the patient experience. This benefits both healthcare providers and patients, enhancing their sense of access to high-quality medical care.

As a key channel for Tencent to export its technologies and capabilities, Tencent Cloud serves as a “digital assistant.” By integrating products such as WeChat City Services, Tencent Miying, and Tencent Ruizhi, and leveraging Donghua Software’s resources and expertise in the healthcare sector, it will provide advanced and comprehensive smart healthcare and wellness solutions and cloud services to governments, medical institutions, third-party healthcare service providers, and individuals. This initiative aims to drive the intelligent transformation of doctor-patient interactions, healthcare environments, and operational models within the healthcare industry, thereby facilitating the digital upgrade of the healthcare and wellness sector.