Yuwell Medical Invests RMB 20 Million in Huagai Capital's RMB 2 Billion Healthcare Industry Fund

VCBeat (WeChat: vcbeat), May 16 – Yuwell Medical, a listed medical device company, announced this morning that it plans to invest RMB 20 million of its own funds to subscribe to a healthcare industry fund launched by Huagai Xincheng Healthcare Investment Chengdu Partnership (Limited Partnership).

Basic information on the investment target indicates that Huagai Xincheng Medical Health Investment Chengdu Partnership Enterprise was established on October 11, 2016. Its registered address is in Chengdu High-Tech Zone (likely chosen to take advantage of preferential policies such as tax incentives in the area), and its executive partner is Huagai Medical Investment Management (Beijing) Co., Ltd.

Huagai Xincheng (Chengdu) focuses its investments on biopharmaceuticals, medical devices, healthcare services, and related sectors, with a fund size capped at RMB 2 billion. Since its inception, numerous listed companies have participated in the fund, including Zixin Pharmaceutical, Changsheng Biotechnology, Furui Shares, Yatai Pharmaceutical, Hongbo Shares, Liaoning Chengda, Tasly, and Haisco Pharmaceutical.

Companies Participating in the Fund and Timeline

Yuwell Medical also stated in its announcement that the Huagai Phase II Fund (Huagai Xincheng Chengdu) is still in the subscription period, and not all other limited partners have been finalized.

Notably, information retrieved from the National Enterprise Credit Information Publicity System indicates that Huagai Xincheng (Chengdu) has made one external investment, targeting Beijing Nuokangda Pharmaceutical Technology, with an investment amount of RMB 34.8 million.

As fundraising and investment activities proceed in tandem, it is certain that more listed companies will participate in the future, deploying greater capital into healthcare-related projects.

Shifting focus from healthcare funds to the participant in this round, Yuyue Medical, it is worth noting that the company has been quite active in capital markets recently. VCBeat previously reported on its activities last NovemberAcquisition of Shanghai Zhongyou Gaoke for RMB 862 million in all-cash transaction——Zhongyou Gaoke is primarily engaged in the research and development, production, and sales of medical and industrial cleaning and disinfection products, as well as personal care products.

Frequent capital movements are closely linked to its rapid performance growth. An analysis of its historical annual reports by VCBeat reveals that over the past decade, its annual performance has grown by an average of more than 20%, marking an astonishing pace of expansion.

Yuwell Medical Historical Data (Unit: 100 Million)

At the product level, Yuwell Medical also has notable strengths. In its 2016 annual report, Yuwell Medical stated that the company currently owns three core brands: “yuwell,” “Hwato,” and “JZ.” The “yuwell” brand is primarily used for medical devices such as oxygen concentrators, electronic blood pressure monitors, blood glucose meters, and test strips. Through years of dedicated efforts by the company, the “yuwell” brand has become deeply rooted in consumers’ minds. With the continuous enhancement of product competitiveness and effective brand communication, the company’s brand value and competitive advantages have significantly improved.

In particular, after completing the acquisition of Shanghai Medical Instrument Group in 2015 and Shanghai Zhongyou in 2016, the company now offers hundreds of product types, holds nearly 600 product registration certificates, and provides close to 10,000 product specifications. Its portfolio covers home medical devices, medical equipment, medical consumables, traditional Chinese medicine instruments, surgical instruments, medicinal plasters and polymer dressings, as well as hospital disinfection and infection control.

The multi-category product structure enhances the competitiveness of the company’s products through various means, such as bundled sales, synergistic expansion of marketing channels, and joint promotional efforts. On the other hand, this diversified product portfolio also strengthens the company’s risk resilience, effectively maintaining its overall competitive position in the medical device industry.

Analysis suggests that, as a leading domestic medical device enterprise, Yuwell Medical boasts a rich product structure with comprehensive categories and a high degree of diversification and personalization, giving it a competitive edge in niche segments. Currently, China’s medical device industry is experiencing rapid growth, driven by strong domestic demand. Committed to the life and health sector, Yuwell is building a comprehensive health ecosystem encompassing home healthcare, clinical healthcare, and internet-based medical services, and has evolved into a specialized service platform with full coverage of the medical device landscape.

Huagai Capital was established in 2012 as a private equity investment firm co-founded by professionals from renowned domestic and international investment institutions, focusing on private equity investments in the Chinese market. It currently manages multiple equity investment funds, including healthcare, TMT, and cultural industry funds, with assets under management nearing RMB 10 billion.

Huagai Capital envisions becoming a locally rooted asset management firm with global influence. It primarily invests in early-stage or growth-stage companies across three key sectors: healthcare, TMT (Technology, Media, and Telecom), and culture. By helping portfolio companies introduce advanced management practices, enhance industrial integration, and strengthen capital operation capabilities, Huagai Capital drives their rapid growth and achieves sustained appreciation of its assets under management.

In the healthcare sector, Huagai Capital has successively invested in projects such as Doctor Glasses, Fe3, Henlius, Guanxin Software, Zhonghe Pharmaceutical, and Zhengguangxing.

It is also worth noting that the participation of listed companies in establishing big health industry funds has shown an explosive trend in the past two years. According to previous statistics by VCBeat, from 2015 to February 2017, the number of medical and health industry funds involving listed companies reached 108, with a total proposed fundraising scale of RMB 168.2 billion. (See details in “RMB 168.2 Billion in Total Scale: A Comprehensive Analysis of 108 Health Industry Funds from Listed Companies》）

In the realm of investment within the broader health industry, an increasing number of listed companies are identifying and investing in high-quality projects through industrial funds. This approach serves as a strategic lever, allowing listed companies to mitigate the impact of direct mergers and acquisitions on the secondary market. The introduction of new technologies and business lines has proven significantly beneficial for expanding business operations and facilitating strategic transformations. Furthermore, collaborative models and leveraged buyouts have alleviated financial pressures on these companies. Coupled with the influx of private equity (PE) firms and professional asset management institutions, the establishment of industrial funds by listed companies has witnessed an explosive growth trend.

What is certain is that cases similar to Yuwell’s participation in Huagai Xincheng will continue to emerge in the near future. This trend signals both industry upgrading and transformation, as well as enterprises’ proactive efforts to break through existing constraints. VCBeat will continue to closely monitor these developments.