Kunya Medical Breaks OEM Monopoly in Third-Party Medical Equipment Services with Innovative Full-Lifecycle Management Solutions

Let us imagine a scenario: if the CT scanners in a Grade 3A hospital suddenly cease to operate, or the vital signs monitors in the intensive care unit fail, and the hospital does not carry out timely repairs, patients’ lives will be at risk within a single day, and the hospital will incur incalculable economic losses. But do you know how these medical devices are maintained? Who is responsible for after-sales services related to medical equipment, including testing, leasing, installation, upgrades, training, consulting, maintenance, and repair?

Currently, there is a significant gap between China’s medical equipment maintenance market and the mature models found in Western countries. Issues such as “industry monopoly,” “opaque pricing,” “reactive maintenance,” and “regulatory gaps” continue to plague the equipment management departments of healthcare institutions. To understand why these problems persist, it is necessary to analyze the underlying maintenance models.

In China, the after-sales services for medical equipment are currently provided by three main parties: technical staff from hospital medical engineering departments, manufacturer technicians, and third-party medical equipment service companies whose core competency lies in maintenance and repair services.

Currently, large-scale medical equipment in China is still predominantly sourced from imports. As manufacturers and distributors of such equipment, foreign enterprises continue to dominate the medical device service market. However, this very dependence of healthcare institutions on original equipment manufacturers (OEMs) has led to inefficient after-sales service and persistently high costs.

Due to factors such as insufficient technical expertise, low service coverage, inadequate maintenance, and an inability of spare parts inventory to meet demand, the hospital’s in-house equipment maintenance staff can only handle the repair and upkeep of a subset of smaller devices.

In this context, a number of small and medium-sized medical equipment service enterprises have emerged. Third-party medical equipment services are an inevitable outcome of the socialization and market-driven development of the medical equipment maintenance sector. Compared with the high costs of original equipment manufacturer (OEM) services and the limited in-house capabilities of hospitals, third-party providers have become another high-quality option for healthcare institutions. For hospitals, key priorities include establishing service capabilities aligned with their equipment management needs, strengthening training and education programs, and reducing a portion of maintenance expenses.

Another key focus is identifying solutions that enable hospitals to monitor equipment operational status, minimize downtime to the greatest extent, and provide preventive maintenance measures, encompassing comprehensive hospital-wide equipment performance management. Currently, standalone repair services and single-product support can no longer fully meet hospital needs. In the future, the managed service model for medical equipment will be key to addressing this challenge. Third-party service providers are actively developing managed maintenance services for imaging and radiology department equipment, as well as holistic managed service models for all hospital medical equipment. This approach transforms “repair” into “management,” effectively resolving critical pain points in the industry.

In this regard, VCBeat interviewed Xu Renxiang, President of Kunya Medical, and Zhao Gang, Founder of Honghui Capital, the Series A investor in Kunya Medical, to gain a detailed understanding of the company.

As the first third-party medical equipment service company listed on the New Third Board, Kunya Medical’s core founders hail from major medical equipment manufacturers such as Siemens. The company’s primary business offerings include managed maintenance services for hospital imaging and radiology department equipment, comprehensive managed maintenance services for all hospital medical equipment, as well as Platinum Care, Gold Care, technical maintenance, equipment relocation, installation, and commissioning services for large and medium-sized medical devices. Additionally, it provides a full range of spare parts and consumables.

Services: Kunya Medical provides one-stop equipment management solutions, precise equipment maintenance, regular equipment asset assessments and recommendations, specialized training for healthcare professionals on equipment maintenance and operation, as well as ongoing management and technical support.

After Kunya Medical successfully listed on the National Equities Exchange and Quotations (NEEQ), it achieved a 52.27% year-on-year increase in operating revenue for the full year of 2016, with a net profit attributable to shareholders of RMB 6.39 million, representing an 8.31% year-on-year growth. Amidst rapid business expansion, Kunya Medical also successfully completed its Series A financing round in the second half of 2016, raising RMB 35 million. This round was led by Grandview Capital, with participation from three other institutions, including Joyful Capital.

Since its listing on the National Equities Exchange and Quotations (NEEQ) and the completion of its Series A financing, Kunya Medical has accelerated its development across multiple fronts: first, it has significantly strengthened talent acquisition and actively cultivated technical and managerial personnel; second, it has entered into new partnerships with several joint ventures and distributors; third, it has expanded procurement channels and scaled up the purchasing of spare parts to ensure adequate inventory reserves.

Mr. Xu Renxiang, President of Kunya Medical, stated in an interview: “Current healthcare reform policies and the market environment are facilitating Kunya Medical’s expansion of its business operations. In the era of big data, Kunya Medical is committed to meeting hospitals’ increasingly refined management needs, enabling healthcare institutions to operate with greater agility and focus on clinical care. Our solutions help address hospital staffing shortages, reduce maintenance costs, and improve equipment uptime, ultimately enhancing the social benefits delivered by healthcare institutions.”

Currently, third-party medical equipment services are experiencing explosive growth. Kunya Medical will accelerate its business expansion in the future, focusing on the following areas:

First, regarding upstream channels: Kunya Medical will maintain and further strengthen its close cooperation with overseas suppliers. One of the company’s key strategic priorities in the near future is to expand spare parts supply channels, integrate resources, and achieve leapfrog development.

Second, regarding internal adjustments: Kunya Medical will strengthen innovation and management, enhance service experience, build its brand, and consolidate and improve the company's core competitiveness.

Third, regarding service expansion: In the future, Kunya will engage more extensively in comprehensive managed maintenance services for hospital medical equipment and achieve rapid corporate growth with the support of relevant national healthcare industry policies.

Meanwhile, Zhao Gang from Honghui Capital told VCBeat that there are currently four to five companies in the market similar to Kunya. The decision to select Kunya Medical among the numerous third-party medical equipment service providers was primarily based on three considerations: First, Kunya Medical’s team has a technical background rather than a sales background, giving them a deeper understanding of industry pain points and the needs of healthcare institutions. Second, Kunya Medical boasts extensive business coverage, capable of maintaining a wide variety of equipment, and has demonstrated rapid performance growth. Third, Kunya Medical has achieved breakthroughs in its service model.

Zhao Gang, Founding Partner of Honghui Capital, stated, “The third-party medical equipment service sector is a relatively untapped market. Kunya Medical has been deeply rooted in this niche for several years, providing hospital clients with specialized equipment repair and comprehensive maintenance managed services characterized by short response times, high repair quality, and cost-effectiveness. The company is poised for rapid growth amid the rising trend of third-party equipment service adoption.”

"As a specialized fund for healthcare industry investment, Honghui Capital is optimistic about Kunya Medical's continuous accumulation and expansion in talent, brand, channels, spare parts, and other areas, which will generate synergies with several specialty hospital chains invested by Honghui."

Ding Yameng, Founding Partner of Haoyue Capital, stated, “With the deepening of healthcare reform and the implementation of tiered diagnosis and treatment, both public and private hospitals have strong demands for enhancing the specialized operation of functional departments and reducing operational costs. The third-party hospital services market, represented by third-party medical equipment services—which are standardized, scalable, and market-oriented—will become the next major industry trend following third-party clinical laboratories. As a representative enterprise in third-party medical equipment services, Kunya Medical will leverage its team’s years of solid industry experience to establish true industry standards.”