Fosun Pharma to Invest RMB 219 Million in Establishing Yulin Cardio-Cerebral Specialty Hospital Co., Ltd.

Following its blockbuster acquisition of an Indian pharmaceutical company, Fosun Pharma announced another major move on the evening of August 5: it plans to jointly invest with Yulin First People’s Hospital to establish Yulin Cardiovascular and Cerebrovascular Specialist Hospital Co., Ltd.

The announcement revealed that the new company’s registered capital is set at RMB 429 million. Fosun Hospital Investment intends to contribute RMB 219 million in cash, accounting for 51% of the registered capital. Yulin First People’s Hospital plans to contribute assets valued at RMB 210 million, representing 49% of the registered capital. These assets include all construction-in-progress, buildings, structures, above-ground attachments, and state-owned land use rights associated with the Health Industry Building project, as well as medical devices and equipment dedicated to Yulin First People’s Hospital’s cardiology and neurology disciplines.

Upon establishment, the new company will be responsible for organizing and operating the "Yulin Cardiovascular Specialty Hospital" and the "Yulin Brain Hospital," with a planned total of 1,060 beds. Meanwhile, both parties will participate in the renovation of the Health Industry Building project through the newly established company, ensuring it meets the operational requirements of the respective hospitals. The Health Industry Building is located at No. 573 Renmin East Road, Yulin City, covering a land area of 14,324 square meters and a floor area of 31,727 square meters.

Yulin First Hospital is the core hospital of Yulin Medical Group Co., Ltd. Established in 1937, it is a comprehensive Grade A tertiary hospital and one of the 500 large-scale comprehensive hospitals nationwide approved by the Ministry of Health of the People's Republic of China. The hospital has a total building area of 248,800 square meters. As of July 31, 2016, it employed 2,087 staff members, including 255 senior health technical professionals and 190 individuals holding master’s degrees or higher postgraduate qualifications. The hospital currently has 1,135 approved beds.

According to the management reports (unaudited) of Yulin First Hospital, as of March 31, 2016, the hospital’s total assets amounted to approximately RMB 2.93 billion, owners’ equity to approximately RMB 790 million, and total liabilities to approximately RMB 2.13 billion; from January to March 2016, Yulin First Hospital generated medical revenue of RMB 280 million.

Regarding the purpose of the investment, Fosun Pharma stated that this investment partnership will help leverage the complementary strengths of both parties. By building on Yulin First Hospital’s medical resources in cardiology and neurology, particularly in the diagnosis and treatment of basic and complex conditions, and supported by the Group’s professional expertise in medical investment management and medical technology resources, the two parties aim to jointly establish a modern hospital management and operational model. They will collaborate to build a specialized medical platform characterized by distinct specialty features, leading disciplinary standards, and an excellent team of experts.

The announcement also pointed out that this investment cooperation is a further response by the Group to the call for private capital to participate in the mixed-ownership reform of public medical institutions. It aligns with national industrial policies and is conducive to further optimizing the Group’s regional layout of healthcare services, thereby promoting the development of its healthcare service business.

Meanwhile, Fosun Pharma has also invested in Jimin Cancer Hospital, Guangji Hospital, Zhongwu Hospital, Chancheng Hospital, Wenzhou Geriatric Hospital, Qingdao Shandong University Qilu Hospital (under preparation), and Taizhou Zhedong Hospital, thereby entering China’s specialized and general healthcare markets. Fosun Pharma stated that it will continue to provide high-quality medical technologies and healthcare service processes to meet the public’s increasingly diverse and multi-tiered demands for medical and health services.