Yihua Health Subsidiary Acquires 60% Stake in Three Elderly Care Hospitals for RMB 228 Million to Accelerate Medical-Aging Integration Strategy

VCBeat (WeChat: vcbeat) reports. Yihua Health announced on the evening of April 18 that its subsidiary will acquire a 60% equity stake in three elderly care hospitals for a cash consideration of RMB 228 million.

According to the announcement, these three hospitals are Hangzhou Yanghe Hospital, Hangzhou Ci’ai Elderly Care Hospital, and Hangzhou Xiacheng Cihui Geriatric Nursing Home (hereinafter collectively referred to as the “Target Hospitals”), whose primary business activities are all related to medical and elderly care services.

Basic Information on the Target Hospital

The announcement stated that, given Lu Chengliang’s direct 40% equity stake in the target hospitals and the companies designated by Lu Chengliang holding a direct 60% equity stake in each of the target hospitals, Dazi Sailekang would acquire 100% of the equity interests in the companies designated by Lu Chengliang for a cash consideration of RMB 228 million. Upon completion of the transaction, Dazi Sailekang will effectively hold a 60% equity interest in each of the target hospitals through its acquisition of the companies designated by Lu Chengliang.

Yihua Health also disclosed that Hangzhou Yanghe Hospital Co., Ltd., Hangzhou Ciyang Geriatric Hospital Co., Ltd., and Hangzhou Xiacheng Cihui Geriatric Nursing Home have been operating locally for many years, possessing extensive experience and professional expertise in the integration of medical care and elderly care, medical nursing, and hospice care. These entities have established a strong brand presence in the Hangzhou region and maintain a stable patient base.

The Company’s subsidiary acquired its controlling stake, aligning with the Company’s strategic layout to build an integrated healthcare and elderly care ecosystem. This move marks the Company’s formal entry into specialized medical nursing and hospice care segments, holding significant importance for future integration of medical and elderly care services as well as industrial synergy. Upon completion of this acquisition, the operating results of these three hospitals will be consolidated into the Company’s financial statements, thereby positively impacting the Company’s operational performance.

Meanwhile, Yihua Health and the actual controller of the target hospital reached an agreement on operating performance. Lu Chengliang, the actual controller, committed that, based on a consolidated net profit after tax of RMB 30 million for the target hospital in 2017, the annual growth rate of the target hospital’s net profit after tax for 2018, 2019, and 2020 would be no less than 10%. Specifically, the consolidated net profit after tax for the target hospital over these four years would be no less than RMB 30 million, RMB 33 million, RMB 36.3 million, and RMB 39.93 million, respectively.

According to the company’s official website, Yihua Health Medical Co., Ltd. is a publicly listed company in the healthcare sector, traded on the Main Board of the Shenzhen Stock Exchange (stock code: 000150). It currently has four wholly-owned and holding subsidiaries and three equity-participating subsidiaries.

Zhongan Kang Logistics Group, ranked No. 1 in China for the scale of logistics management services, which has undertaken the construction of over 100 large and medium-sized hospitals nationwide and provides non-clinical services and consumables supply to more than 120 hospitals; and Dazisailekang Medical Investment Management Co., Ltd., a leader in the field of gamma knife oncology treatment and ranked among the top three private hospital enterprises in China by bed count, with direct or indirect holdings in 16 general hospitals, specialized hospitals, and nursing homes, totaling 10,000 medical beds.

And “Qinheyuan,” China’s pioneering brand in the membership-based elderly care industry and a benchmark enterprise in the sector, which operates 15 mid-to-high-end senior living communities (with additional ones planned) and offers over 9,000 senior housing units; and Aioluo Medical Devices, a globally leading integrator of medical device products and services, specializing in the production of mobile medical equipment and chronic disease management solutions. Yihua Health’s business scope encompasses hospital investment and management, medical logistics services, specialized medical engineering, research and development and manufacturing of medical devices, internet healthcare, and mid-to-high-end elderly care and nursing services. Following a series of successful capital operations and industrial strategic deployments in recent years, Yihua Health has established a dual-core development strategy focused on medical services and elderly care services, with key investments in private general hospitals and mid-to-high-end senior living communities.

Yihua Health’s 2016 annual report showed that its revenue during the reporting period was RMB 1.296 billion, a year-on-year increase of 25.72%; net profit attributable to shareholders of the listed company was RMB 744 million, representing a year-on-year increase of 1,342.25%.

As of the close on April 19, Yihua Health’s stock price stood at 26.89, with a total market capitalization of RMB 12.041 billion.