KingMed Diagnostics Clears IPO Review with Four Key Regulatory Queries Addressed

In the field of third-party medical testing, following Daan Gene and Dian Diagnostics, a third listed company is poised to enter the market.

July 4，China Securities Regulatory CommissionThe “Announcement on the Review Results of the 99th Meeting of the Main Board Issuance Examination Committee in 2017” was released, with the review results as follows:Guangzhou KingMed Diagnostics Group Co., Ltd.(First Release)Approved。

So, what are the advantages of KingMed Diagnostics? What questions from the China Securities Regulatory Commission (CSRC) did it need to address before its initial public offering? VCBeat will continue to monitor KingMed Diagnostics’ progress.

KingMed Diagnostics was established in 2003, with its headquarters located at Guangzhou International Bio Island. Its core management team has been actively exploring the operational model of medical laboratory outsourcing services in China since the 1990s.

This operational model is characterized by its focus on clinical needs and disease orientation, with the establishment of testing/diagnostic centers.By introducing internationally advanced medical laboratory technologies, service concepts, high-caliber domestic and international disciplinary talent, and independent innovation, we have established a core technology system to serve the Healthy China initiative.

Meanwhile, KingMed Diagnostics strictly adheres to international standards and isThe first third-party medical laboratory in China to hold dual accreditation from CAP and ISO 15189, with test reports recognized in more than 50 countries and regions worldwide.

By benchmarking against international standards and pursuing independent innovation, KingMed Diagnostics continuously enhances its testing and inspection capabilities, primarily engaging in medical laboratory services.Offers over 2,300 laboratory tests for clinical and research purposes.

Currently, KingMed Diagnostics has established 34 medical testing laboratories in mainland China and the Hong Kong region.By establishing a four-tier laboratory network comprising headquarters-level laboratories, provincial regional center laboratories, provincial laboratories, and prefecture- and city-level laboratories, the home-service network has been extended to the township and community levels.

KingMed DiagnosticsCurrently providing medical laboratory services to over 21,000 healthcare institutions, with an annual testing volume of more than 40 million specimens, covering areas where over 90% of China’s population resides.

KingMed Diagnostics operates China’s first remote pathology collaboration network and a pathologist consortium comprising more than 600 domestic and international pathologists.Leveraging the market-driven model of the sharing economy to address the current scarcity of pathology resources, supporting tiered diagnosis and treatment, and promoting the equalization of public medical services.

Beyond testing services, KingMed Diagnostics places greater emphasis on leveraging its strengths to provide comprehensive, customized solutions for hospital clinical laboratories and pathology departments. These solutions cover everything from design and construction to service operations, as well as management systems and business processes. By serving as a valuable complement to hospitals, KingMed aims to enhance the level of medical laboratory services and facilitate the sharing of high-quality resources.

Such as laboratory design and construction across China, including laboratory design and planning, laboratory renovation and construction, information platform development, and remote pathology consultation platform establishment; centralized laboratory supply and maintenance, comprehensive supply of reagents and consumables, and warehouse management; development of laboratory disciplinary systems, quality management systems, operational management systems, biosafety management systems, and cold chain logistics systems; as well as the training or placement of personnel in advanced and basic laboratory disciplines, management talent development, and the establishment of laboratory training programs.

In terms of product diversification, expand into health management, hygiene testing, clinical trials, forensic appraisal, and cold chain logistics.

For instance, in the realm of health management, KingMed Diagnostics aims to deliver novel commercial value to clients through resource complementarity and cross-industry collaboration. Its offerings encompass health check-ups and health insurance.Health CheckupThe main services include eight items, such as value-added health product services for insured customers and participation in the design of new insurance products by insurance companies.

Health checkups encompass three key aspects. First, exclusive services, including customized personal health checkup packages and dedicated checkup sessions; second, health record management, providing electronic health record services; third, health education, offering targeted health lectures based on clients' health conditions; and finally, expert health consultations.

Although KingMed Diagnostics’ business model and product diversification have established it as a leading third-party medical testing enterprise in China, on the eve of its planned listing on the main board, the China Securities Regulatory Commission (CSRC) released the four major questions raised by the Issuance Examination Committee during its review meeting regarding Guangzhou KingMed Medical Testing Group Co., Ltd.’s post-approval process.

Question 1Please have the issuer’s representative further explain that, during the reporting period, the issuer provided to specific medical institutionsSpecific Business Processes for Procurement Outsourcing, relevant internal control management measures and their implementation status; procurement outsourcing ofRelevant Pricing Mechanisms, a comparison of gross profit margins for major products during the reporting period under scenarios with and without outsourced procurement; whether it complies with China’s relevant medical and health laws and regulations for the issuer to entrust qualified medical institutions to conduct tests when the issuer itself does not possess the requisite testing qualifications,Major Risks and Mitigation Measures。

Question 2Yes, please ask the issuer's representative.Combining the characteristics of medical services with its own business operationsStatement Regarding Peking University Shenzhen Hospital, Zhuzhou Central Hospital, and OthersThe Reasonableness of Sustained High Growth in Sales Revenue from a Single Customer.

Question 3Please have the issuer's representative explain in conjunction with the internal control mechanisms for business acquisition.Compliance of High-End Testing Services.

Question 4Yes, please have the issuer's representativeIn light of the unfair competition-related incidents involving Shanghai KingMed Diagnostics Co., Ltd.,Explain whether the issuer’s internal control systems and their implementation are effective, and whether relevant information disclosure and risk warnings are adequate, given that the issuer’s business operations span across China and it has numerous subsidiaries.

How will KingMed Diagnostics’ issuer representatives respond to these issues? Stay tuned to VCBeat, as we will continue to monitor and report on the matter.