Hony's healthcare platform launches HK IPO
Hospital Corporation of China (HCC), a hospital operation group established by Hony Capital, has launched a Hong Kong IPO that would see the company raise as much as HK$500 million ($64 million).
According to a filing, the company is offering 33.33 million shares at up to HK$15 apiece. The final offer price will be announced on March 9 and the stock is scheduled to commence trading on March 16.
HCC serves as a platform for the hospital operation and management business of Hony Capital. Through the platform, Hony plans to consolidate medical resources in the regions where the hospitals already in its portfolio are located, with a view to creating a national medical services network through M&A. It specifically targets class-two or class-three hospitals located in major Chinese cities with sizeable populations and attractive economic conditions.
The group now manages two general hospitals in Shanghai, including Yangsi Hospital, the largest privately-owned hospital in Shanghai, which Hony bought in 2014; and Fuhua Hospital. Fuhua Hospital extends the coverage of medical services offered by Yangsi Hospital by providing clinical care and rehabilitation services. In the meantime, Yangsi Hospital also offers VIP services, which Fuhua Hospital does not provide, to patients who are willing to pay higher prices for premium medical services. With these two core assets, HCC will further consolidate medical resources in the region.
HCC provides hospital management and consultancy services to Yangsi Hospital through its subsidiaries Weikang Investment and Honghe Ruixin and charges fees for its services. Yangsi Hospital's revenue rose 16.5% year-on-year to RMB538 million ($69 million) in 2015, while its net profit increased 18% to RMB2.8 million in 2015. Fuhua Hospital's revenue jumped 60% year-on-year to RMB23.45 million in 2015. It recorded a net profit of RMB1.84 million in 2015, up from a net loss of RMB574,000 in 2014.
HCC generated RMB119 million in revenue in 2015, up from RMB65.73 million in 2014, while its net profit rose 71% year-on-year to RMB99.29 million in 2015.
China International Capital Corporation acted as the sole bookrunner and global coordinator for the IPO.
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