Hongri TCM Doctor Group, Backed by 75 Veteran TCM Practitioners, Files for IPO

On June 24, 2016, Chase Sun Pharmaceutical established the Chase Sun TCM Physician Group and launched “Yizhentang,” a traditional Chinese medicine (TCM) full-course diagnosis and treatment service institution, formally entering the healthcare sector. According to Yao Xiaoqing, Chairman of Chase Sun Pharmaceutical, the Chase Sun TCM Physician Group represents a new business segment built upon the company’s existing foundations in five key areas: pharmaceuticals, medical devices, technology incubation, technology transfer, and industrial investment.

Hongri Chinese Medicine Physician Group is centered on meeting patients’ needs for personalized, refined TCM diagnosis and treatment, rehabilitation, and daily health management. By applying internet-based product thinking, it aims to generate more TCM diagnostic and therapeutic services with enhanced user experiences. Leveraging Hongri Pharmaceutical’s capital operation capabilities, the group integrates and optimizes upstream, midstream, and downstream resources in the TCM service chain, incubates and launches innovative TCM service products, and encourages and supports more innovation projects in TCM diagnosis and treatment, thereby creating incremental market space. It seeks to capture market share through its products and unlock greater value by serving high-quality users.

VCBeat (WeChat ID: vcbeat) has learned that the equity of Hongri TCM Physician Group is jointly held by Chase Sun Pharmaceutical and 75 senior TCM practitioners. The inheritance team comprises three National Masters of Traditional Chinese Medicine, 23 nationally renowned senior experts, 12 provincially or municipally renowned senior experts, and 36 TCM inheritors. This equity structure not only boosts the professional enthusiasm of TCM physicians but also ensures treatment quality and strengthens market expansion capabilities. Meanwhile, it provides a platform for TCM knowledge dissemination, facilitating better integration between online consultation platforms and offline TCM clinics. Renowned TCM experts can pass on their skills to cultivate TCM talent and promote TCM culture, thereby improving the quality of medical services and supporting Yizhentang’s nationwide expansion.

The renowned physicians and master mentors assembled by the Hongri Traditional Chinese Medicine (TCM) Physician Group will provide substantial support to its chain of outpatient clinics, rapidly establishing brand influence. Guo Weiqin, former president of Dongzhimen Hospital affiliated with Beijing University of Chinese Medicine, is a key member of this TCM expert team. According to her, the decision to practice and mentor apprentices at Yizhen Guan stems from two main factors: first, a high degree of alignment between both parties on the philosophy of clinical mentorship and heritage transmission; and second, Hongri Pharmaceutical’s scientific approach to drug research and development. Hongri Pharmaceutical employs paper chromatography fingerprinting techniques to ensure that the efficacy of each single-herb granule matches that of the corresponding traditional decoction pieces. Meanwhile, by enhancing physicians’ clinical skills, the group aims to improve prescribing proficiency, thereby maximizing therapeutic outcomes. Adhering to the traditional TCM model of “consultation plus dispensing,” the sales of TCM decoction pieces and formula granules will serve as a crucial channel for resource monetization for the Hongri TCM Physician Group. Growth in the pharmaceutical manufacturing sector remains robust, with formula granules continuing to achieve a high growth rate exceeding 30%.

Leveraging internet-centric thinking, Yizhentang has undertaken a comprehensive optimization of its service processes and standards. Patients schedule their clinic visits online in advance; upon arrival, they are accompanied throughout their visit by a dedicated private physician. Following an initial consultation, the private physician collaborates with top-tier Traditional Chinese Medicine (TCM) experts to formulate and verify personalized prescriptions, or arranges restorative TCM therapies such as tuina massage and acupuncture. Before departure, the private physician provides a detailed post-consultation recommendation report. Later this year, Yizhentang will also launch an online out-of-hospital health management platform, offering services including medication reminders, rehabilitation courses, dietary therapy plans, 24/7 rehabilitation consultations, and psychological counseling.

Furthermore, Yizhentang adopts a refined “1+1” diagnosis and treatment model, which pairs one private physician with one renowned TCM expert. Routine health maintenance is managed by the private physician, while complex and intractable conditions are addressed by the renowned experts. In recent years, demand for health maintenance and premium traditional Chinese medicine (TCM) services has grown increasingly robust. Looking ahead, Yizhentang’s strategy will gradually center on regions with strong sales of TCM formula granules, targeting provinces and municipalities with high TCM utilization and relatively concentrated TCM practitioner resources. The company aims to establish a chain of premium TCM clinics through self-built facilities or mergers and acquisitions. Following the opening of the first Yizhentang clinic in Beijing, flagship stores will be sequentially launched in provinces with resource advantages, such as Shandong, as the company progressively explores nationwide chain operations.

As healthcare reform continues to deepen, internet technology platforms will play a significant role in addressing health needs, facilitating information exchange, and establishing tiered diagnosis and treatment as well as telemedicine systems. By integrating internal resources, Hongri TCM Physician Group has developed the online Hongkang Cloud Health Management Platform. Combined with the nationwide chain layout of its offline Yizhentang clinics, the integration of medical services with internet-based health management is poised to become a new growth engine for Hongri.