Taikang Life Insurance Acquires 51.56% Stake in BoBo Dental for RMB 2.062 Billion with Regulatory Approval
VCBeat (WeChat ID: vcbeat) has learned that on May 18, the China Banking and Insurance Regulatory Commission issued an approval regarding Taikang Life Insurance Co., Ltd.’s equity investment in Bybo Medical Group Co., Ltd., approving Taikang Life’s capital contributionRMB 2.0623 billion investment for a 51.56% equity stake in Bybo Medical。
Bybo Healthcare is primarily engaged in dental medical services, as well as investment and investment management in other healthcare projects. It is a member enterprise of Legend Holdings. Below is the original text of the approval issued by the China Banking and Insurance Regulatory Commission (CBIRC):
Approval by the China Banking and Insurance Regulatory Commission on Taikang Life Insurance Co., Ltd.’s Equity Investment in Bybo Medical Group Co., Ltd.
CBIRC License [2018] No. 57
Taikang Life Insurance Co., Ltd.:
We have received your company’s Request for Instructions regarding the investment in Bybo Medical Group Co., Ltd. (hereinafter referred to as “Bybo Medical”) and the supplementary materials (Taikang Life Insurance Report [2018] Nos. 51 and 96). Upon review, we hereby provide the following approval:
I. Approve your company’s investment of RMB 2.06236 billion to acquire a 51.56% equity stake in Bybo Medical.
II. Your company shall strictly comply with relevant laws, regulations, and regulatory requirements applicable to non-insurance subsidiaries during the investment in Bybo Medical and its subsequent operation and management.
III. Your company shall urge Bybo Medical to improve its corporate governance structure, establish and refine internal control and risk management systems—including risk isolation mechanisms and related-party transaction rules—to effectively prevent the transmission of risks.
IV. Your company shall, in accordance with regulatory requirements, regularly report to the Commission on the status of non-insurance subsidiaries and investment management activities. In the event of any major or emergency incidents, your company shall promptly take effective measures and fulfill its reporting obligations.
Data shows that Bybo Dental Medical Group is currently the leading non-public dental medical group in China in terms of scale. It was founded by its founder, Mr. Li Changren, in Shenzhen in 1993. After 25 years of rapid development, as of December 31, 2017, Bybo Dental had 212 outlets, including 53 hospitals and 159 clinics, representing a 6% increase from the 200 outlets at the end of 2016. The group’s services covered 25 provinces and municipalities directly under the central government, with more than 6,000 employees. Notably, the number of dental chairs used by Bybo Dental increased from 2,569 at the end of 2016 to 2,816 as of December 31, 2017.
Legend Holdings strategically invested in Bybo Dental as early as July 2014. On January 24, 2018, the existing shareholders of Bybo Dental reached an agreement with Taikang Life Insurance Co., Ltd. (hereinafter referred to as “Taikang Life”) to strategically introduce Taikang Life as the controlling shareholder, aiming to support the development of Bybo Dental and optimize its capital structure. Legend Holdings will continue to support the future development of Bybo Dental.
In addition to providing capital investment, Taikang Life will contribute synergistic resources in areas such as customer resource support, marketing and promotional collaboration, insurance payment processes, and cooperation on oral health insurance products.
The transaction has officially taken effect after being approved by the China Insurance Regulatory Commission.
Oral care is one of the highly marketized sectors within the broader health and wellness industry. In 2017, the domestic oral care market in China approached RMB 200 billion, with a compound annual growth rate as high as 21%. With increasing capital infusion,Dental Chain Expansionis also one of the visible trends, butThe Profitability Challenge, has been plaguingNationwide Cross-Regional Large-Scale Brand Chain，Refined Management and OperationsIt is imperative.
With the full launch of the strategic partnership between Taikang Insurance Group and Bybo in 2018, this deepening collaboration is poised to bring revolutionary forces to both the service and payment sectors.
Resources:Taikang possesses substantial financial strength and further brings educational training and information technology resources. Leveraging Taikang’s collaborative mechanisms with top-tier universities, it introduces premier educational resources, management consulting, and training opportunities to overcome bottlenecks in the development of dental professionals.
IT Informationization:Leverage the IT R&D and implementation team of Taikang Healthcare to enhance the information technology capabilities across the entire group;
Payment:Taikang’s commercial health insurance business is expanding rapidly. By partnering with Bybo to integrate commercial health insurance with dental services, Taikang will unlock significant potential, combining payment and service delivery to create a “Kaiser model” for the oral healthcare industry.
Client Side:Leveraging Taikang’s extensive insurance customer base and superior service capabilities, Taikang and Bybo have achieved synergistic development, jointly creating a new model for marketing services.
Oral care + insurance is a mature and mainstream model abroad. Delta Dental is the largest professional dental insurance provider in the United States, with67 Million Dental Insurance Users, the proportion is very high. In China’s dental market, insurance involvement is still in a growth phase, yet this is precisely where the opportunities lie. Moreover, acceptance of treatments such as prosthodontics, dental implants, and orthodontics is steadily rising in the Chinese market, reflecting a growing awareness of oral health among patients.
VCBeat believes that in the past few years, capital has been entering more throughClinic and Related Supporting Infrastructure Investment, matchedFinancial Services, and there will gradually be a relatively strong demand; the current juncture represents a favorable window of opportunity.
For Bybo Dental, the two parties will engage in comprehensive, multi-dimensional cooperation across branding, marketing, and customer services, integrating commercial health insurance with dental care. The year 2018 will be a pivotal year for strategic reform.
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